You have to pay the late / extention penalties not closing an REO deal on time!!!!!

By
Real Estate Agent with Keller Williams Realty Las Vegas

So, for the past 2 months, there hasn't been not one deal that I've had close on time (meaning the original closing date on the contract). The problem that I'm seeing is that EVERY SINGLE TIME the buyers don't want to pay the penalties for closing late!!! Just about every bank has it in their addendum/counter offer that if the buyer doesn't close on time, then they have to pay both an extension fee and per diam until they actually close the deal. IT DOESN'T MATTER WHO ON THE BUYER SIDE IS CAUSING THE DELAY. IT CAN BE THE BUYER, BUYER'S AGENT, BUYER'S LENDER, BUYER'S DOG, BUYER'S GRANDMOTHER, BUYER'S ANYTHING. IF THE BUYER'S SIDE IS LATE TO CLOSE, BE PREPARED TO PAY THE PENALTIES!!!

On every deal, there is some excuse as to why they can't close on time. And I'm always hearing from the buyer's agent "Well the buyer feels it's not their fault that the lender can't get docs so they don't want to pay the penalty" Or some other excuse. If you are going with the banks lender then maybe that can be worked out, but if you brought your own lender to the table (even if it was at your agents suggestion) then that is YOUR lender and YOU (as the buyer) are responsible for them not closing on time!!!! If you as the buyer don't want to pay the extension and per diam, then work that out between the lender and your buyer's agent. IT'S NOT THE SELLERS ISSUE.

Well two of my banks have put their "foot down" and we have actually lost two deals this month because the buyer's didn't want to pay the 300 dollar extension fee!!!! This is after the bank WAIVED the per diam and only required the extension fee!! I'm not understanding how you can sign off agreeing to pay the fee in the beginning and when you default, you're talking about "I don't feel I should have to pay!"

It's in BLACK AND WHITE "I will pay the extension fee and per diam if for any reason I don't close on time after my due dillegence period has expired." That why I love the banks because everything is in black and white, not left up to chance.

Moral of the story is, banks are starting to kill deals over the extension fees. So tell your buyer's (IN THE BEGINNING) to be prepared to pay those fees if ANYBODY on their side doesn't close, or face losing the house.

Bryan Knight, REO Specialist in Las Vegas, NV

Follow me at www.twitter.com/KnightREO

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Topic:
Real Estate General Information
Location:
Nevada Clark County
Groups:
Coldwell Banker Bloggers
Las Vegas, NV Area Real Estate Professionals
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Comments 15 New Comment

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Rainmaker
43,705
Mike Sackman
Broker in Charge, ABR, CDPE
Mike Sackman Real Estate, LLC

I did this, and it worked! On the original contract, I wrote in the remarks that if the buyers were ready to close and the sellers delayed by no fault of the buyer, any and all fee's acrued were the respsonibility of the seller. When I received the addendum, we wrote it in there again and they signed it. Well it happend and they swallowed it.

I also have the lender sign an acknowledgement that "time is of the essence" in securing the loan due to penalties.

January 13, 2009 04:23 PM
Anonymous #12
Anonymous
Raph

I can not believe that some of you represented buyers, look like that some of you represent yourself.

From the beginning take the per diem out of the contract if you represent the buyer or have it both way (specially if a cash buyer).

November 15, 2010 05:48 PM
Anonymous #13
Anonymous
Robyn

Per diem charges and late closing fee...  Just one of the many unethical practices of the industry that have directly impacted the economic downtown of the entire country.

June 09, 2011 02:44 AM
Anonymous #14
Anonymous
hatlady

We (owners of home) have been waiting to close a re-fi for weeks. Our paperwork has all been in, appraisal done, etc. The LENDER has pushed back the closing date two times and now is charging for the latest pushback. Hmmmmm. I can understand it it were OUR fault. But it's the lender..FIFTH THIRD BANK......that doing all this dancing and dealing because they're swamped. Is that our fault? I really don't understand the penalty here. The mortgage company is absorbing it....but what is the law? (I used to be in banking...and was once a mortgage broker, but am not up on the fine print.)

October 26, 2011 11:52 PM
Anonymous #15
Anonymous
Myra Rubinstein

We are in contract to purchase a house in the Outer Banks of North Carolina.  We did everything required of us and were ready to close on Friday November 2.  But we were told that the closing now must be delayed until November 15 to allow for a reappraisal and that in addition to a reappraisal fee they are raising our points from 1/8 point to 1/2 point (4x the points!) .  

Why should we be penalized for a weather delay that is TOTALLY not our fault?  We were ready to close by the deadline.

November 05, 2012 08:38 AM
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Rainer
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Bryan Knight

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Blog on both local (Las Vegas) and national real estate news and trends. Concentrated in REO.