Is a per diem penalty considered a closing cost for the buyer?

Asked by Stephanie Medellin, Schenectady, NY Mon Sep 3, 2012

If a buyer is paying a per diem charge when escrow doesn't close on time, and the buyer is also receiving a closing cost credit from the seller, of which there is still several hundred dollars left to use, should the buyer be entitled to use the closing cost credit to cover the per diem charge?

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Tina Yeates’ answer
Tina Yeates, Agent, Glendale, CA
Mon Sep 10, 2012
The listing agent should be able to get an extension of time for the bank making this question mute.

If you have a valid reason (to the bank) like, the HOA didn't get us (specific) paperwork for a week, the underwriter for the new loan was fired and we had to resubmit, etc the listing agent should be able to get the extension.

Failing that, the credit is for closing costs. Unless the short sale approval letter from the bank spells out what it can/can't be used for - you get to apply it where - ever it is needed :).
0 votes
carlos parra…, Other Pro, Monrovia, CA
Tue Sep 4, 2012
A per Diem charge is a closing cost. If your agreement does not specifically state that Seller credits to closing costs cannot be used toward per diem penalties, then there is no reason the credit cannot be used.
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Scott and Sh…, Agent, San Diego, CA
Thu Sep 6, 2012
Generally the closing cost credits are used to pay for loan costs. I would determine who is at fault for the delay. If it is the lender or the buyer or the seller...maybe you can negotiate the per diem charge if it is not the fault of the buyer?
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John Frederi…, Home Buyer, 84106
Tue Sep 4, 2012
Is it just me or was this question answered the same way 5 times?
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Kawain Payne, Agent, Seal Beach, CA
Tue Sep 4, 2012
Your per diem is part of closing cost.

Closing cost are ALL funds the buyer must pay to close the deal.

If the seller is willing to give you a credit, I see no reasonwhy they would not allow you to apply some or all of the credit they are giving you to satisfy the per diem fees.

Please work with your lender to try and minimize the closing delay, so you will not be on the hook for too much by way of the per diem.

Best of Luck to You!!!

Kawain Payne, Realtor
0 votes
Douglas Perez, Agent, Los Angeles, CA
Mon Sep 3, 2012
Hey Equity Builder,
Yes, it is part of your closing cost. But If you are getting a loan, you would need to address this issue to your loan agent and your agent , so you could structure this credit to you pay for your lender's closing cost and use the remaining to pay for this per diem item and possibly other part of your closing cost too. Otherwise, the remaining part of the closing cost could revert to the seller and you would have to pay for it because the some lenders might not allow it. Therefore, get ahead of the "game" and talk to your agent and loan agent, and have it in writing signed by the seller in escrow!

Good luck.

Douglas Perez
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Jane Peters, Agent, Los Angeles, CA
Mon Sep 3, 2012
This is something you will have to agree upon with the seller. It all goes into and comes out of escrow, so it should be paper accounting
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John Frederi…, Home Buyer, 84106
Mon Sep 3, 2012
I am in a similar situation and the seller is allowing me to deduct the per diem from the home warranty they were supposed to pay. I don't see why the seller would care because it nets the same to them but I think you need to add an addendum to the contract to make sure the sellers agrees.
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