What Happens if a Home Seller Cannot Close by the Date?

Real estate transactions typically involve contracts for the sale of property. As such, contract law applies when either the buyer or the seller breaches the contract. Not being able to close on the agreed-upon date might constitute breach of contract, for which there are remedies.

Closing the Contract

Typically, contracts for the purchase of property include an agreed-upon date by which closing will occur. Often, the language states that the parties agree to close "on or about" a certain closing date. The date is not always set in stone, as this provides protection for the buyer if financing proves difficult. This nebulous "on or about" language serves to protect the seller as well, particularly if an inspection reveals serious problems that require repair.

Failure to Close

Although failure to close by the seller on the specified contract date might result in breach of contract, a buyer must be able to prove actual damages before a court will award monetary compensation. For example, if a buyer signed a contract with a moving company, but had to breach the contract because the seller could not close, any money the buyer had to pay the mover would likely have to be paid by the seller because the seller's inability to close on time caused the breach. As such, courts will award damages if a buyer can prove a quantifiable amount. Courts will not, however, award damages simply because the buyer is upset that closing did not happen on the specified date.


Courts apply contract remedies where a breach has occurred involving a contract for the purchase of real estate. Courts award damages for out-of-pocket expenses. Sometimes loss of expectation value on the transaction is awarded, but usually this remedy applies to the seller's loss of expectation. Additionally, if the real estate contract includes a liquidated damages clause regarding seller's breach, the seller promises to pay liquidated damages if she breaches.

Additional Considerations

If the parties cannot come to a compromise, the buyer can ask a court to step in and modify the contract to extend the time a buyer might need to obtain financing, particularly if the buyer lost financing due to the seller's breach. A court might also allow for rescission of the contract if the parties can't work things out, meaning a court will allow the buyer to walk away from the contract free and clear of any obligations.