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Closing extension may be necessary when conditions arise in life causing delay. A closing date may need to be changed due to another residence not being ready, delay is loan procedures, and many other contingencies that may cause an extension of closing date. Every real estate contract will have a closing date-a date within which a purchase or sale is scheduled to close. The date of closing is agreed to during the phase of negotiation and generally it will be a few days after the date of acceptance of the offer. Both parties must honor their respective obligations under the agreement within that date. In the event a contract fails to close because one party failed to honor his/her obligation, the contract automatically expires and both the parties are relieved of their obligations. A closing extension is treated in the law like any other contract extension. In certain cases, it may result in a breach of contract and the aggrieved party will be entitled to raise a claim for breach of contract against the defaulting party.
However, if parties want to go ahead with the deal but require time beyond the closing date in order to honor their obligations, they will have to amend the contract and agree to it in writing. The amendment must be done prior to the closing date. Such an amendment will result in closing date extension.
A closing date is generally quite eventful. For example, on a house closing date, the following few events occur:
In case extension of time is required, both buyer and seller must agree to change the closing date. While the buyer has a right to request extension of closing date, a seller has the right to oppose or refuse closing extension. Mostly, real estate representatives of both the parties ensure that closing date extensions are agreed to so that the transaction moves towards finality and benefits both the parties.