Regarding the per diem at closing....?

Question

My home is contracted to close on the 13th. It may be delayed a few days through absolutely no fault of mine. The contract indicates that, if it doesn't close on the 13th, I will be charged $100 per diem. Most of the delays is on the part of the seller (a bank) with some delay coming from my lender (though I came in preapproved). I have responded in a timely and effecient manner to every requirement made of me. Am I on the hook for the per diem? I already sent an email to the agent indicating that, if anyone insists that the money come out of MY pocket, I will not request an extension and the transaction will terminate on the 13th.

Thank you for your input.

Additional Details

Just a note to the obvious sadists who like to add in their snide comments about how my lender is my fault, don't bother answering. Your credibility was ruined in your first sentence (ever heard of sellers having lender requirements?) Also, it doens't matter what is "generally accepted" as far as extended closing, the contract prevails in court. (and yes, I understand I may have some fees). Thanks to the rest of you who understand that I have met MY obligation in this transaction.

Answer 1

Best Answer - Chosen by Asker

You may be on the hook for the per diem, unless you can clearly document that the fault for the delay lies with the seller. You can make the demand that you will not extend and will terminate the transaction on the 13th if this happens, but you may lose your earnest money. This all depends on your contract for sale; take a look at that and see if you have the right to terminate.

From the contracts I have seen for this sort of sale (sounds like you are buying a foreclosure) this is not a valid reason for you to terminate without cost. Often the seller/bank can choose to terminate or charge the per diem, at their option, but the buyer generally won't have this right.

And you will still be out the money for the inspections and appraisal, even if you get your earnest money back. I'd just keep riding them to close on time, tell your realtor to communicate to the seller that you want to avoid the per diem because of delays on their part, and then be prepared to pony up a few hundred to keep from losing the deal and all your investment to this point.

Source(s):

Have purchased several homes under these same conditions (per diem penalties).

Asker's Rating:

Asker's Comment:

Thanks for the details. It was a bank-owned property, but I've been able to do some negotiating. Since the closing date was the seller's choice, and they also chose an escrow co. on the other side of the state, I've been assured I won't be expected to pay any per diem.

Answer 2

Sounds like you are buying a hud repo right. This happens alot. You are on the hook unless you don't extend the contract & unfortunately they don't waive it. Your idea of refusing to extend may help you, I would tell them you will extend only if they waive the charges. They are not going to want to lose the sale this close to closing. Good luck

Source(s):

23 years mortgage lender.

Answer 3

your lender is your fault. you are on the same team. you were not far enough in underwriting process to promise a 13th close.

talk to seller about an addendum extending date past 13th for no penalty. Try and find out immediately if seller is going to stick this $100 to you. If seller acknowledges they were at fault they may extend for $0.

Answer 4

I luv when people go into a contract to purchase a large item like a home without legal representation

Without knowing all the fact esp. the sales agreement, you may not just be able to refuse to extend the closing date, for its generally accepted as common business practices that closing never happen on the date in the sales agreement and usually a separate letter must be issued to the parties Time is of the essence giving the other party a certain number of days to perform after the closing date, even if you have a date in the sales agreement