Asking Buyer for a $100 per diem for delayed closing.

Asked by Lateescrow, Los Angeles, CA Fri Jul 27, 2012

I am the seller. I busted my butt and spent all my $$'s to pass the appraisers inspection, including tenting for termites. The house was fully cleared by the appraiser on 07/20/12. Prior to that date the lender had stated all required information was in from buyers and they were only waiting for the appraisers report. It's the 27th and still no loan docs. The date to close is 07/29/12 and the buyers will not make it. This causes me to have to pay an additional house payment plus the loss of rental income as I moved my tenants out a month ago. The buyers have held this up (they went on a 12 vacation to Hawaii). I was more than generous with paying most of their closing cost. Now I'm the one in a bind with no money left to pay another month of mortgage. Is asking for $100 per day reasonable? That is about what I'm losing per day because they were unable to close in the 40 day escrow period. Also note they did remove all contingencies including the loan contingency.

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8
Deborah Brem…, Agent, Los Angeles, CA
Fri Jul 27, 2012
Hi late;
Escrows going long are a common problem right now, most often because of appraisals and conditions in underwriting, both of which are the responsibility of the buyer's side. Both of which, more than likely, are completely out of the buyer's control.
You sound completely frustrated, and most sellers in your position are frustrated.
So, here is the real world answer. Yes, you can ask for a per diem. The buyer is in no way required to pay it, unless your agent negotiated it as part of the sales contract. You can try to negotiate it now, but if the buyer refuses, and all of their contingencies are removed, your only alternative is to give a notice to perform, which they won't be able to do without an appraisal. Then, in 48 hours, you can cancel, and start over with a new buyer. This will cost you time AND money.
This is the moment when the agents need to step up to the plate. They need to help you find a resolution that resolves this for everyone. Do not miss your payment, as you will damage your credit rating.
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) (310) 800-2954
http://www.thebremnergroup.com
Accredited Buyer Representative|Certified Distressed Property Expert |Pre-Foreclosure Specialist Certified
3 votes
Kawain Payne, Agent, Seal Beach, CA
Sat Jul 28, 2012
Hello Late EScrow,

You can ask the buyer to pay a per diem for late closing if the terms and conditions of your purchase agreement stipilulated there would be such a fee, and the casues of the fee being applied would have to have beem clearly outlined. If buyer is in violation then yes the fee can be charged.


Best of luck to you,

Kawain Payne, Realtor
2 votes
Douglas Perez, Agent, Los Angeles, CA
Fri Jul 27, 2012
I agree with you. In most real estate contracts there are simply only 2 parties, SELLER and BUYER. In your case, it sounds that Buyer is at fault. Therefore, Buyer must pay for his/her fault. And a "per diem" agreement is reasonable. Buyer should make his/her lender accountable for it.
1 vote
Dionne Pope, Agent, Truckee, CA
Fri Jul 21, 2017
Information is general as I do not have access to all of the documents and details of this escrow. The following is a courtesy to clarify a couple of items you have provided.
NOTE: Closings (recordings) do not occur on a weekend or holiday so what was discussed for your Close Of Escrow with your realtor.. 7/29/17 is a Saturday.
You have two options:
"AsK" them to pay the $100 per day. They can say no.
OR
Present them with a notice to perform. A CA Residential Purchase Agreement defaults to 48 hour Notice to Preform. This option is for the Seller, should a buyer not be abiding by the agreement. Generally you deliver a Notice to Preform within a few days prior to the due date. In this case, using your /29/17, you would present it on the 27th.
After the 48 hours you can either cancel the contract and start all over or do nothing.
0 votes
Don't you read? The question is from 2012. Why did you note that 7/29/17 is a Saturday. The question states 7/20/12. I question whether you verify documents for clients or do you make mistakes and let clients suffer because you don't care as long as you collect a commission - right?
Flag Sat Jul 22, 2017
My NC Homes…, Agent, Chapel Hill, NC
Sat Jul 28, 2012
This is a question probably best answered by an attorney. You have a contract and most standard real estate contracts address this very question about a delay in closing. Without having your contract to review it's hard for anyone here on Trulia to give you much more than some general advice. Your request sounds reasonable (though your losses and expenses are truly of no real concern to the buyer) but your contract may stipulate that a closing within 10-14 days of the listed settlement date cannot be penalized or it may stipulate that you have the right to terminate (which I doubt you want to do)

Best advice is speak with your agent and consider consulting an attorney
0 votes
Cindy Davis, Agent, San Diego, CA
Fri Jul 27, 2012
It's hard in these situations to say what is reasonable. It sounds like the lender is where the hold up is which is almost ALWAYS the hold up. The buyers are going to say "it's not my fault.' so why should we have to pay?

With that said, $100 a day for late closings is something I have certainly seen before. Given that you still have to pay on your mortgage, insurance, taxes, etc...

So, go for it...maybe the buyer's can get some recourse from their lender...and this per diem will certainly press the matter with the lender and the buyers.


Best of luck.
0 votes
Jane Peters, Agent, Los Angeles, CA
Fri Jul 27, 2012
I had a similar situation representing the buyers. It probably is not the buyers' fault and they are as frustrated as you. As mentioned below, you can have your agent draw up a Notice to Perform with a request for a per diem. If the buyers love the house they may pay it, certainly since they also stand to lose money if they have to start the home buying process from scratch, but you may have to also if they refuse, and you both lose. Talk to your agent about your options. Hopefully this will all resolve itself quickly.
0 votes
Jamie Tsai, Agent, Los Angeles, CA
Fri Jul 27, 2012
If you have some provision to the effect in your sale paper works, then go ahead. Or have your agent issue "Notice to Perform" to demand to close on time. If as expected, buyer cannot close on time, then your agent ought to start the talk about this $100 charge per day as an amendment to the escrow. Justify the number by presenting your case. Good luck.
0 votes
We are in this same boat. Our buyer made an offer 11/4/16 we accepted the offer closing was set for 12/22. They had problems with financing at their bank so we extended close to 1/13/17 still not finished with new appraisal and financing so we extend to 2/14. They leave the country for 2 weeks and didn't have everything to the broker before they left so we asked them for 1500.00 compensation and a signed document that they lose earnest money if they don't close by 2/28 they refused the compensation but will sign the paper releasing earnest money if they don't close by the 28th. I don't agree with buyers extending without compensation. The seller is paying a mortgage on the house as well as other bills to maintain the house. It's so frustrating I'm just praying they go thru closing this time.
Flag Wed Feb 15, 2017
So what is the answser to this? Will a buyer pay? Why does the lender delay?
Flag Fri Oct 16, 2015
Mine is charging us 1000/day for lender's paperwork delay...
Flag Sat Aug 22, 2015
My builder want to charge me $3000 for delay??????????????
Flag Wed Aug 5, 2015
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