Right the seller is entitled to Interest + Insurance + Taxes at a minimum on the home you are late on per day.
Remember, they are paying mortgage, insurance and taxes for every day you are late on.
Yes the seller can also pursue other damages. But the $200 a day cannot be an arbitary number, the seller has to show costs and damage. Rest assured it wont be $200 a day, once lawyers are involved.
Ask your Real Esate agent who should be separate from your Loan Agent to find out, what the sellers are loosing a day. Your Real Estate agent, will have to now perform above and beyond, to keep this transaction together, and minimize your pay out.
You may have a recourse against your loan agent, provided he is with a solid company with insurance,
otherwise, with a mickey mouse company, you can win the case, but the company can go bankrupt
and you are wasting your time.
If an attorney is necessary, your agent should be able to refer you to a good one. If not, have your agent call me and I can provide the names of three of the best real estate attorneys in the area. Very well known and very good.
What is your real estate's suggestion?
He or She will your best resource. Our suggestion is ONLY a reference.
From what I understand you are kind of removing loan contingency before it was approved.
Did your agent or you let the loan agent know this matter? No one will force you to pay if you don't agree.
Please ask both your real estate agent and loan agent to work together with the seller's agent and seller.
I think everything will be fine.
I read into this that perhaps you are purchasing a home in a new community and the builder's addendum has a $200 per day penalty? Perhaps you didn't use the builder preferred lender and their community sales agent wrote the contract? In any event, you should seek the advice of a real estate attorney, and request what your options are from your loan agent and any agent who represented you.
If you have it in writing, I would ask the loan officer to pay for the per diem. He had no right to ask you remove a contingency, especially one where there would be such consequences. Good luck.
Unfortunately, your best and most accurate advice will come from an attorney specializing in real estate law. However, in my unlegal opinion, if you want this home, I'd move quickly to press forward.
The seller is asking for $200 per day in penalties for failing to close on time? You aren't perchance talking about the purchase of bank owned property, because that is one of the few times that I've seen a Per Diem penalty imposed. If the property being purchased is an REO property, AND your Realtor is unable to negotiate the removal or reduction of the penalty fees, then your best bet is to pay the $200 penalty and move quickly to close escrow--especially if you still really want the home. At this time, it's certainly NOT the seller's fault that your escrow is not closing on time, so you might not expect any accommodations or assistance from the seller. Further, exacerbating the situation by waiting and accumulating additional expenses or jeopardizing all or part of your earnest money deposit also provides you with no relief for your situation. So press forward and close escrow.
As to who will pay the $200 per day fees, this is a matter to be discussed between you, your Realtor, the Realtor's broker, and your mortgage lender. As the others noted, you certainly should have been consulted regarding the loan and the subsequent change in banks, and this matter can probably be resolved after the close of escrow.
In the meantime, talk quickly with an attorney and press forward. Work with your agent to forge an amicable solution to this problem. I wish you very good luck!
Grace Morioka, SRES
Area Pro Realty
As far as legal recourse, I'd concentrate on getting the deal closed ASAP first to minimize the damage, then see what your loan agent can do for you to make it up to you before getting lawyers involved. Lawyers may end up costing more than $200/day.
You definitely should see a lawyer on this one. The mortgage broker may well have some liability in this situation.
In the meantime, you (or your agent, really) should try to reduce that $200/day amount. But--especially if that's what's provided in the contract--that may be difficult to overcome.
Finally--and check with your Realtor--it's unlikely the seller could "run away with our escrow." I'm not licensed in California and don't know California practices, but in many states the escrow will only be released upon the signatures of both the would-be buyers and sellers. In other words (in many parts of the country) you'd have to agree to the release.
So: Check with your Realtor (about the fate of your escrow as well as negotiating the $200 per day down) and with a lawyer (about whether, and to what extent, the mortgage broker has liability in the issue.
Hope that helps.
We here can try to help find solutions that mitigate the need to go "legal".
I would suggest that your Realtor advise you as to the options you have in your contract. That is the best resource for contractual questions.
Based on an ordinary resale purchase contract you have little room to fight their desire to be compensated for a contract where contingencies are removed. In other words you would be in breech without additional addenda supporting a granted extension of terms.
Usually, good faith and due diligence removes this obstacle -moving forward in good faith and showing a positive conclusion through solutions.
Sorry you are having to go through this. My first advice would be to get an extension on the COE, but it sounds as if the seller won't do that without a penalty. Certainly, $200/day is painful, but far less severe than losing both the home and your deposit. As for recourse against your lender, you should seek legal advice from a qualified real estate attorney and they don't post on Trulia.
I am so sorry that this has happened to you.
Your situation isn't clear, but if the lender is asking you to remove contingencies does that mean that he is also representing the seller?
Your own agent should be able to advise you on this, but you if the lender has given you written advice to remove contingencies it would be very very unusual. Have you considered asking the lender to contribute to your costs? I would possibly suggest allowing the loan to close first, so that any action you affect the terms of your contract any further.
As far as legal recourse, it seems to me that it might be worth your while to contact an attorney. The Santa Clara COunty Bar Association has a list of lawyers who will provide a 30 minute free consultation which might help you decide whether it's worthwhile for you to pursue this.