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We just bought a house and was supposed to close this week. However we just heard from the seller that they want to push the closing date to the end of month. However our rate locking period is untill next week. With the recent rate shooting up, we will end up paying a lot more if we can not close with the original agreed date. The seller did not give us any reason for why they need to push the date. They actually have moved out from the hosue. We talked to our lawyer, and we were told by New York law the seller can do this even without a reason. My question is, in the current situation, what can we do to protect us from losing the locked rate and end up paying a lot more money. Our lawyer told us there is nothing we can do. We can not threat to sue the seller for damage as well even if they did this on purpose. Is this true? The law just does not protect buyer at all in this situation? We were also told that if we walk away even after agreed closing date (which we really want to) we will lose our Ernest Money (which is a lot). Is that true? Can we walk away after the agreed closing date without losing EM? Please help!
Last edited by newbiehouse; 06-08-2009 at 01:49 PM..
It is true. Right now you have no contract finalized.
I would do two things: first talk to the seller, offer to close earlier, but not move in till the date they want. Explain the situation if you think you need to. They probably need some time to gather some things, or might need to stay in town and rather than get a hotel, will just stay in the house.
Two, if that doesn't work, go to your bank and explain what happened, they might be able to get you a rate that will be good till the future date.
Often, a bank will allow you to extend a lock period, for a fee. (A $500 fee could be well worth the extension of the rate).
And yes, legally, your options are quite limited. Typically, the home sales contract does not specify an exact date. So your seller may still be within the contractual period. Furthermore, even if the seller was "breaking" the contract, your "damages" would be limited to whatever money you are out of pocket.
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