Sometimes the window you’re given by the lender to close doesn’t feel like enough time to complete a short sale. However, if you don’t close on time, your file may go all the way back to the beginning of the negotiation process. To avoid this setback, do everything you can to close within your lender’s window.
If closing on time isn’t possible, you may have to request an extension. You should request the extension directly from your lender’s closer, and include a letter of explanation stating why the parties can’t close on time. For instance, a typical reason a file can’t close on time is because the MLO (mortgage loan originator) needs more time to fund the buyer’s loan. In this case, get a letter of explanation from the MLO and try to get a definitive date nailed down for closing.
The extension process can be a bit tricky, so make sure to avoid these common mistakes:
- Asking too early for an extension will make the lender think that you aren’t actually trying to close on time. Don’t ask more than two weeks in advance.
- Not providing a close date or asking for an open-ended extension will cause lenders to question granting the extension. They want to know that you’re committed to a closing date.
- Asking for an extension without a valid reason will likely result in a denial of your request. Lenders won’t extend the close date if they think the parties haven’t given closing their best shot.
- Make sure you’re asking the right person for the extension. The contact person who negotiated your original approval letter is not the right party. Request an extension directly from your closer.
Keep in mind, extensions are not guaranteed and you should never rely on receiving an extension. If you’re feeling the pressure, try pushing your buyer’s lender to get moving as quickly as possible. We recommend doing this as soon as your receive your approval letter.
For customized advice on your unique situation, contact us our experienced attorneys at Ark Law Group for a free consultation. Our team is here to help you navigate the short sale process.