Missing a deadline during a home closing in Tennessee can put your earnest money deposit at risk, and potentially end the deal entirely. Tennessee purchase agreements used in Davidson County and throughout the state typically outline which missed deadlines allow a seller to take this action. Whether a missed deadline ends the deal, triggers a penalty or can be resolved depends on how the contract is written and how quickly you act.
Can you lose your earnest money deposit?
The earnest money deposit shows your commitment to the purchase. If you miss a deadline without notice, the seller may have grounds to keep it. Tennessee purchase agreements, including those enforced in Davidson County, outline which missed deadlines allow this. The amount varies but commonly falls between one and three percent of the purchase price, sometimes higher or lower.
What happens to the purchase agreement?
Missing a deadline does not automatically void the contract. Many Tennessee purchase agreements include a “time is of the essence” clause, which can give the seller immediate grounds to terminate and keep your earnest money. Whether that happens depends on your contract’s terms – and the outcome is not always certain.
How can you protect your position?
If a closing deadline is at risk, take these steps as early as possible:
- Record the key dates from your purchase agreement – including the inspection deadline, financing contingency and closing date.
- Send a written notice to the seller if you need more time, and request any extension in writing before the deadline passes.
- Keep copies of all lender communications, inspection reports and correspondence with the seller.
- Notify the seller immediately if a condition outside your control – such as a lender delay – threatens your ability to close on time.
Written communication creates a record that may protect your deposit if a dispute arises later.
When to contact a Tennessee real estate attorney
When a closing deadline passes in Tennessee, what happens next depends on the specific language in your purchase agreement – including whether it contains a “time is of the essence” clause and what it says about extensions and earnest money forfeiture. If a seller is threatening to terminate the deal or keep your deposit, reviewing the contract with a Tennessee real estate attorney before the dispute escalates can help you understand what rights you still have and what options remain.
