STRATEGY
CLOSING DEALS
What Happens If You Don’t Close an Investment Deal on Time?
by Michael Jordan
t’s quite a relief when the seller agrees on your offer. However,
tract on a home, a closing date is set. Once the closing date has passed, an extension is usually set by the seller and a per diem charge is set for each day to cover the additional mortgage, tax, and insurance payments they need to make as a result of the post- poned date. Most of all, a per diem is set because of the major inconve- nience brought by the buyer. The charge is usually one-thir- teenth of the seller’s housing expenses. Although this doesn’t seem that big of an amount to deal with, you shouldn’t be adding more expenses to deal with other than the purchase price of the property itself. THE SELLER GETS TO KEEP YOUR EARNESTMONEY DEPOSIT Keep in mind that an earnest mon- ey deposit is meant to be in a show of good faith, meaning you essentially
prove to the seller that you have the money to purchase their property. Without complying on the closing date properly, you’re throwing away your deposit for the seller to keep as their own especially if it’s specified as such in the agreement. To be fair, there are times when an earnest money deposit is set as a refundable amount that you can add towards the down payment or clos- ing costs, it’s better to be safe than sorry. If a buyer cancels the contract during the closing, then the ear- nest money deposit gets refunded. However, if the contract is canceled by the buyer after the closing period, then the earnest money deposit will be FOREFEITED and will be consid- ered non-refundable.
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there’s still one more hurdle you want to overcome since the property isn’t yours just yet. It’s the closing process, which is just as important as the entire real estate transaction. A buyer is given ample time to prepare for the closing process, 30 to 45 days in fact. Everything must be in order from the inspection up until finalizing funding. Many homebuyers often take this stage of the sales transaction for granted and they sometimes stumble before they reach the finish line. To understand the importance of complying with the closing process, here are the conse- quences of not closing on time.
YOU COULD BE CHARGEDA PER DIEM Per diem is a Latin term meaning per day . When a buyer enters a con-
YOU COULD BE FACING LEGAL ACTION Whether it’s unintentional or not,
74 | think realty magazine :: september 2020
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