Why would a seller want to extend their settlement date?

Hi All,

quickie, I have an IP that settles next week, was asked for an extension to that date for the following week.

I know as a buyer you might need an extension because of finance or other legal issue...but why would a seller require an extension?

Regards
 
insufficient funds to discharge

bank not ready

nowhere to move to

lost the title deed

overseas and can't sign the transfer
 
Most likely because the seller bought / rented somewhere else to move into, and for whatever reason the new place isn't ready. Or maybe they just couldn't get everything packed in time or couldn't find a moving company. Any number of innocent reasons.
 
Maybe they are waiting on a settlement themsleves so they can move into a new property?

Maybe they are waiting on a rental property to become available?

Personal circumstance?

List could go on and on
 
Probably has a buy in place with a 6 month settlement and the date happened to be a week out of whack with your settlement...?
Lining things up...?
Could be plenty of reasons as stated above though....
 
Whatever the reasons it works in your favour anyway.

You've already secured the price, so all this means is that you pay less interest :)
 
You will never really know the real reason.
All the reason's above are all legitimate.
All you can do is wait.
 
The nasty part of me says you should charge them penalty interest. If the buyer is late to settlement I can guarantee that the vendor would happily charge them.
 
This sounds very familiar.

We had a rent-back seller play games with us about settlement - repeated extensions etc. They were also awful with late payment of rent and with leaving the place in a mess.

Basically, they had some fairly tangled up finances. They weren't going to clear out the whole debt with the sale - they were using part to clear some other debts and keep the rest secured by something else, and they were waiting on bank approval, or something. In other words - in over their heads and robbing Peter to pay Paul (which is why they were renting instead of moving to a new PPOR). And in the course of the lease, we became Peter who was robbed from, too.

As others have said, there are valid reasons for extending and renting back, but take it as a potential red flag. I'd give them the extension, since it doesn't hurt you, but get tough on any late rent payments ASAP. Don't give them any grace. If they are in trouble, make it hard enough for them that they screw over someone else who doesn't push back as much before they start screwing you.
 
The nasty part of me says you should charge them penalty interest. If the buyer is late to settlement I can guarantee that the vendor would happily charge them.

that's because the vendor is incurring an economic loss. what is the loss in this scenario?
 
that's because the vendor is incurring an economic loss. what is the loss in this scenario?

Loss of rental income? Opportunity cost as the new purchase may have their own deadlines in place?

Vendors claim almost double the current interest rates and they keep any incoming rental income.

The world's not a fair place and it doesn't go both ways, but it would be nice if it did.

We recently had a loan that settled late. The vendors agent told the valuer the property was a good development site and the house should be knocked down (his opinion only) and the valuer simply put down land value. They wouldn't review the val so we had to go to a different lender and start from scratch. Neither the vendor nor the agent were too sympathetic to the extra costs incurred by the purchaser.
 
We had a situation a little while ago where the lady we had purchased the property from actually died during the settlement period so it had to go to probate to sort it all out. The sale went through ok, just took an extra two weeks to transfer the title. The biggest impact for us was that the schedule was out and we had to reorganise our trades that we had lined up to work on the job. Not directly relevant to your situation, but an interesting scenario that can also happen to stretch out the settlement period.

Wishing you every success, Ana
 
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