As we have discussed previously here, there are so many moving parts when it comes to a real estate transaction, on both the buyer’s and seller’s side. There are certain tasks that each party has to complete in order to close a transaction and a team of professionals that is helping them complete each task. One of the most frequent questions we get is, how long does the process take and when can we close? A seller is anxious to close and move on, and a buyer is anxious to close and start a new chapter in their new home! So, what is the time frame?
In New York, using an “on or about” closing date is standard. What does that mean? An “on or about” closing date does NOT mean that the transaction will close on that date. I make sure to explain this to clients up front so that they understand (hopefully) that an on or about date provides the parties with a target date. An “on or about” date means that the parties have up to 30 days to close after the date set forth in the contract. This time frame has developed through case law.
For example, if the contract states that the closing will take place “on or about April 4, 2024,” then the parties really have until May 4, 2024 to close. This can be a frustrating concept for both parties. There are things that occur as we near the end of a transaction that will delay a closing. If we are within that “on or about” time frame, there really is not much we can do.
For example, if a title issue arises shortly before April 4, 2024, requiring that the buyer obtain a new survey, and it will take the buyer a few weeks to get a new survey, we are still within a reasonable time to close under the contract, no matter how frustrated and anxious the seller might be to close. On the buyer’s side, if an issue arises where the seller runs into a 2-week delay in terms of when they can move out of the property, and we are already one week past April 4, 2024, we are still within a reasonable time to close under the contract, no matter how frustrated and anxious the buyer might be to close.
An issue that we encounter frequently is the scenario where a buyer’s rate lock is about to expire and seller needs more time to close. If we are still within that reasonable time period, the parties have to work together to reach a solution, whether it means closing to save the buyer’s interest rate and entering into a post-closing possession agreement, or the buyer paying to extend the rate for a certain period of time. We always try to explain every potential alternative to our clients, as well as the pros and cons of each alternative, and why potentially ending up in court over it is NOT where they want to end up!
At the end of the day, it’s important the buyers and sellers understand from the very beginning what an “on or about” closing date is so that they are not surprised by the fact that they might be required to close later than they expected to, due to a number of different circumstances that could fall within that reasonable time period.
Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.
