A closing date is an important milestone in the real estate process since it brings the sale of a property to its conclusion. This is why you want to avoid any issues that could push back the closing date. You might wait longer than necessary to take possession of your desired property, or your deal may end up in jeopardy.
Sometimes you have to delay a closing, perhaps because you cannot secure a mortgage until a later date. However, unnecessary delays can be risky. Sfgate explains the possible downsides of not meeting a closing date on time.
Cancellation of the deal
Your real estate contract contains specified timelines that all parties must meet. A failure to fulfill a timeline could put the contract in peril. While you or the seller may negotiate for an extension, there is probably no obligation to do so. A refusal to extend the closing date could cause you or the seller to fail to carry out a part of the contract and cause the deal to fall apart.
Even if you and the seller agree to an extension, it might make it less likely for any future extensions to occur. You or the seller may find it too tiresome to delay the process any longer and decide to cancel the sale.
An erosion of credibility
Sometimes closing delays indicate that one party is having trouble fulfilling their end of the contract. If your seller seems incapable of keeping the deal on track, you might feel the seller is showing incompetence. You may also wonder if the seller is hiding problems with the property. Growing suspicion on your part could make it less likely that you want to follow through with the sale.
One way to avoid delays is to make sure you have a realistic date to close the deal. Sometimes sellers and buyers are eager to establish a closing date but fail to consider possibilities that could delay the process. You can also protect yourself by having contingencies in the contract that allow you to walk away in case of unfavorable developments.