Closing issues from buyer. 5 months delay. CRE financing

[Adrien Gael]

Good afternoon,

I received an offer on 4 units in March. Buyer already purchased 100 units in the same complex 2 years ago. He really wanted my units because he wanted all the complex under his management so I decided to accept his offer.

He promised me an easy closing (1 month) thas was in April. On the contract it stated "Conventional Loan" with the lenders details.

When closing was supposed to take place the buyer informs me that he is taking out a CRE financing (Refinancing I suppose ?)

We are now in September and I still get different reasons why it is not closing (CRE lender not replying, Environment survey...)

I believe the buyer is trying to gain time regarding the refinancing. Is this possible ? 

Does anybody have an idea of what is happening here ?

I appreciate anybodys help on this.

Thank you

[Greg Byler]

Hello Adrien - I've been poking around here trying to learn what I don't know about rental homes. But I've been in commercial RE for years, just not residential. In commercial it's actually pretty straight forward. The contract to purchase your units would come with a deposit that is applied to the purchase price when the property closes. If it doesn't close, the deposit is yours. If buyer wants more time, they put in more hard money in escrow that is forfeited to you automatically if buyer doesn't close on time. This is usually all stipulated in the contract. 

I would simply tell the buyer you will happily give him more time, but you need a new contract. This contract requires a deposit to be escrowed with the closing company that is non-refundable if he doesn't close. For every additional 30 or 60 days of due diligence he needs, he puts in extension money that is non-refundable. All money can be applied to the purchase price. 

This will create some urgency and/or at least get you some cash for screwing around with this guy. And put an end date to his goofyness. 

Good luck.