Can closing be delayed if financing is not
ready?
Can closing be delayed if financing isn’t ready? Read this now — it can make or break your sale in Georgetown.
Quick answer (no fluff)
Yes. Closing can be delayed if financing is not ready — but only if parties agree, or if the Agreement of Purchase and Sale (APS) contains a financing condition that hasn’t been waived. If there’s no agreement or condition, the buyer risks default and the seller can enforce remedies. In Georgetown’s fast market, knowing how to negotiate an extension is how sellers keep control and avoid costly delays.
Why this matters to sellers in Georgetown, ON
Georgetown sits inside Halton Hills with strong demand and low inventory. That gives sellers leverage. But buyers still need mortgage approval, appraisal, and often final underwriting. If financing stalls close to closing day, sellers face three things: wasted time, extra costs, and risk of the buyer walking. The best sellers remove uncertainty before it kills the deal.
The legal basics every seller must know
- Agreement of Purchase and Sale (APS): This is the contract that sets the closing date and any financing condition. Read it. If the buyer’s obligation is conditional on financing, they must remove that condition by the deadline specified or the deal can be voided.
- Financing conditions: Typical clause allows a buyer to cancel if they can’t secure financing by a set date. If the date is missed, the buyer must either extend the condition, waive it, or be treated as in default.
- Default and remedies: If a buyer fails to close without an agreed extension, the seller can keep the deposit, sue for damages, or accept an amended closing plan.
- Lawyers and title: Even if funds arrive late, attorneys can sometimes delay registration and adjust closing logistics — but only with clear instructions and possible holdbacks.
Real-world scenarios and what they mean for you
1) Buyer has a financing condition and misses the removal deadline
- What happens: Buyer can be in default. Seller can accept termination and keep deposit, or negotiate an extension. In Georgetown’s market, many sellers push for the deposit if risk is high.
- What to do: Consult your realtor and lawyer immediately. Decide if you want to re-list, accept an extension with safeguards, or keep the deposit and move on.
2) Buyer had financing removed but lender falls through last minute
- What happens: Buyer technically committed. If the lender freezes funding, buyer may ask for a short extension. You can demand proof of attempts to secure funds and set a firm new date.
- What to do: Ask for written proof from lender, a bridge plan, or a closing holdback in solicitor trust until funds clear.
3) Buyer asks for extension the week of closing
- What happens: This is high risk. It can derail your moving schedule and cost you. In hot markets, sellers often reject last-minute extensions and pursue remedies.
- What to do: Negotiate an incentive to close fast (for instance, a higher deposit or interest on delayed funds) or require immediate proof of available funds.
How Georgetown market dynamics change the playbook
- Seller leverage: Low days-on-market and strong demand mean sellers in Georgetown can push back against weak buyers. If you have backup offers, use them as leverage.
- Lender timelines: Local lenders serving Halton Hills often turn files faster than big national lenders. Encourage buyers to use local mortgage brokers. That reduces the chance of last-minute lender pullback.
- Lawyer availability: Closing day depends on lawyer scheduling. Georgetown lawyers and notaries handle many closings simultaneously. If financing delays look likely, your agent should call lawyers early to gatekeep the closing time.
Practical steps sellers must take — a clear checklist
- Read the APS and know the financing condition date. Don’t guess.
- Ask your agent to confirm buyer’s lender and commitment status one week before closing.
- Require written proof from buyer when an extension is requested: lender email, underwriting hold details, or proof of alternative financing.
- Negotiate an extension in writing. Add firm new dates, possible penalties, or increased deposit into trust.
- Use a closing holdback if funds are late but the buyer insists on closing. Your lawyer holds part of proceeds until lender funds clear.
- Consider re-listing or accepting a backup offer if buyer can’t show credible funding quickly.
- Plan your move as if you must move on closing date. Have contingency storage and flexible movers.
How to structure an extension that protects you
Don’t give time for “maybe.” If you agree to an extension, put terms in writing: new firm closing date, increased deposit, interest on delayed funds (for example 8% simple interest on delayed portion), and a clause that allows you to terminate if funds aren’t in by X time. Your lawyer will draft an amending agreement or an acknowledgement to attach to the APS.
Moving logistics — what sellers must do when closing is uncertain
- Book movers with a hold/cancellation policy. Pick a mover that offers short-notice changes.
- Arrange temporary storage for larger items if closing drags.
- Keep utilities on until possession is handed over. Don’t cancel utilities until your lawyer confirms registration and keys released.
- Final walkthrough: Schedule it for the morning of closing. If financing delays push closing, do a pre-move final walkthrough and document property condition.
- Keys and possession: Possession usually transfers at noon on closing day in Ontario unless APS says otherwise. Do not hand keys over until your lawyer confirms funds and registration.
Negotiation tips that win — use leverage, get proof, get paid
- Ask for lender contact and confirmation in writing. If the lender won’t confirm, the buyer may not be funded.
- Demand the buyer waive financing condition earlier in the process if pre-approval exists. A pre-approved buyer is less risky.
- Hold the buyer accountable with a larger deposit or a short-term rent-back if they need time after closing.
Simple scripts you can use (say these to your agent or buyer)
- “We will consider a two-business-day extension if you provide lender confirmation by 5pm today and increase the deposit by $X.”
- “We need a written timeline from the lender and proof of funds for closing by 10am on the new date or this agreement will be terminated.”
Why a local, aggressive agent matters
The language in the APS and how you respond to delays matters. An experienced Georgetown agent knows local lender behavior, local lawyers, and buyer pressure points. They can lock extensions that protect you, or push buyers to perform. That saves you money and prevents moving chaos.
If you want direct help handling a financing delay, call me. I’ll review your APS, coordinate with your lawyer, and craft an enforceable amendment that protects your sale and timeline.
Moving day checklist for sellers in Georgetown
- Confirm funds cleared with your lawyer before handing keys.
- Keep final meter reads and utility transfer receipts.
- Take photos for condition proof.
- Keep a list of items staying and items going.
- Be ready to vacate by possession time stated in the APS.
FAQ — Common questions sellers ask in Georgetown, ON
Q: Can a buyer force a delay if they can’t get financing?
A: No. A buyer cannot unilaterally change the closing date. Both parties must agree to delay. If there’s a financing condition, the condition timeline governs. Without agreement, seller can treat buyer as in default.
Q: What if the lender delays funding the morning of closing?
A: Lawyers can sometimes delay registration for a short period, or accept a holdback. But this requires unanimous agreement and quick documentation. Protect yourself with proof and penalties when you grant extensions.
Q: Can I keep the deposit if the buyer can’t close?
A: Often yes, if the buyer is in default and you follow the APS remedies. Speak to your lawyer. In many cases, deposit is the seller’s partial compensation for failed deals.
Q: How long can a closing be delayed?
A: There’s no fixed maximum. Practically, extensions are short — days to weeks — agreed in writing. Long delays risk re-listing the property.
Q: Should I accept a buyer who requests frequent extensions?
A: No. Frequent extensions show weak financing and increase risk. Consider rejecting and choosing a stronger buyer.
Q: What about conditional offers?
A: Conditional offers with financing clauses protect buyers. Sellers should require proof that conditions are met or negotiate removal early.
Q: Do local Georgetown lenders make a difference?
A: Yes. Local mortgage brokers and credit unions often close faster and are easier to verify. Ask your buyer’s agent who the lender is.
Q: What if I’ve already booked movers and closing is delayed?
A: Use movers with flexible rescheduling. Rent a short-term storage unit. Communicate clearly with the moving company about potential changes.
Q: Can I charge the buyer for extra costs caused by delay?
A: You can negotiate penalties or interest as part of an extension. Courts enforce clear written terms. Get legal advice first.
Q: When should I call a lawyer?
A: Call your lawyer as soon as you suspect financing delay. They will advise on deposit rights, draft amendments, and manage the holdback process.
Final note — control the outcome
Don’t let a financing delay ruin your sale. In Georgetown, market strength gives sellers leverage. Use it. Demand proof. Nail any extension in writing with penalties. Book movers with flexibility. And if you want someone who will act fast and protect your closing, call me.
Tony Sousa
Local Realtor — Georgetown, ON
tony@sousasells.ca | 416-477-2620
https://www.sousasells.ca
