Buyer's lender delaying closing twice!

[Calvin Ly]

This is getting super frustrating and getting expensive. I just sold a home and another is under contraction to sell. Both times the lenders are pushing well beyond the closing date. First one was suppose to close in June 12th. Instead, the lender (Wells Fargo) asked for two extensions and we finally closed on June 27th. The second deal (lender is Quicken Loans) was suppose to close on the June 30th, then today July 7th, and now its suppose to be July 18th. This is super frustrating because it happened twice on two separate deals. What are my options? Do I have any? How can I prevent this in the future? My realtor is telling he is noticing this quite a bit lately. Is anyone else experiencing this as of late?

Oh when I said the lender asked for an extension, I meant more like dictated the date/s.

[James Wise]

Nothing you can do to prevent it. 

I suppose you could deny the request to extend the loan and cancel the sale but obviously that would be counter productive.

[Calvin Ly]

^^^I don't like your answer! lol I mean if I was a buyer it wouldn't be so bad, just waiting. But as a seller it's time and $$$$.$$! From what I was told its stuck in underwriting and the appraisal both times are ordered after the dang closing date! Anyone else experiencing this recently? Or is it just my luck to get hit twice, twice!

[Shaun Weekes]

Calvin,

As the seller it's going to be hard to swallow this pill.   One thing that your realtor could have done is have his or her loan officer ( Every realtor should have a loan guy or 2 that they work with ) cross qualify the buyer buy looking at the 1003 and grading it to make sure everything looked good. 

Now when I do cross qualifies for my realtors the LO might be using a bank that has a program that I'm not familiar with or that I don't offer.  In tha case I just straight up ask them can you get this done in 30 days and if they say no ( it happends ) but are honest I'll talk to my realtor and just say extend the COE ( close of escrow ) 5 or 7 days.

After you extend for 2nd time at that point I would just have the buyer start paying for daily interest.  If you're saying that the appraisal wasn't even ordered until after the COE that to me is crazy.  What was the broker doing for the first 30 days?  Now if the loan feel out somewhere else or if the house wasn't up to fannie, fha, va, usda or freddies standards it should be addressed in the sales contract.  The LO needs to communicate with the buyers agent and they should relay this to the listing agent so it gets to you.

Sounds like bad luck to me but the appraisal thing is weird to me unless the home had some issues that were being taken care of.

In the future have your realtor's LO do a cross qualify so that expectations are set from the start.

I hope this helps and good luck with all your future deals.

[Elizabeth Colegrove]

Is this a seller or buyers market? In Hanford/Lemoore area the sellers are "picking" the mortgage brokers they want to work with due to this issue. I know we went with a local well know broker for this reason! If you are in a sellers market with multiple offers you might want to chose offers more on who can close. We had a seller take our offer even though we were 2k less because of our mortgage broker.

[Albert Bui]

Originally posted by @Calvin Ly:

This is getting super frustrating and getting expensive. I just sold a home and another is under contraction to sell. Both times the lenders are pushing well beyond the closing date. First one was suppose to close in June 12th. Instead, the lender (Wells Fargo) asked for two extensions and we finally closed on June 27th. The second deal (lender is Quicken Loans) was suppose to close on the June 30th, then today July 7th, and now its suppose to be July 18th. This is super frustrating because it happened twice on two separate deals. What are my options? Do I have any? How can I prevent this in the future? My realtor is telling he is noticing this quite a bit lately. Is anyone else experiencing this as of late?

Oh when I said the lender asked for an extension, I meant more like dictated the date/s.

Calvin banks are slammed lately especially big under staffed banks who were not anticipating the lower of rates lately that have driven a 2nd mini spur of refinancing activity. This refinancing activity slows down the purchase pipelines as well.

You cannot prevent this but you can discourage it by adding per diem costs for being late similar to new home builders on your purchase contracts, have your agent prescreen lenders of the buyers to make sure their timelines and how far they have on the buyers documents/file to see if this will occur again in the future.

You'll be amaze how fast people work when the per diem is 200 dollars per day. Most likely the buyer will not be paying it, the lender will be crediting the buyer usually or suffer a soiled reputation for over promising and under delivering. If I cannot do it in under 30 I will let the buyers agent know with clear communication that for whatever reason that I will need 45 day escrow etc.

It all comes down to communication and due dilligence up front, good luck.

[Colleen F.]

The other thing that can save you is if you verify  that critical appraisal ordering etc is done.  I know our Real estate agent saved us by hounding the selling agent to get the fire inspection done. If she hadn't we would have had a delayed closing because the required compliance on the fire system and corresponding paperwork wasn't in place. She also kept an eye on the appraisal scheduling.  I do like the  idea of using a  penalty for significant delays. To me a few days if known well in advance wouldn't be an issue but it sounds like you are well beyond that.  

[George P.]

my last two deals had perdiems in them. one was "i lose 3k if i dont close on that date". the other is "i pay $75 per day for every day overdue".

[Calvin Ly]

Thanks everyone for your input, your suggestions were very helpful. For the house I am now closing on July 18th  I am asking for more earnest money in order to extend this second time. I am just going to eat the holding cost on this deal-just going to cough this up to part of doing business and learning. On the next deals I am going to require a per diem on first extension and increase in earnest on second extension.