Lender Delay: Who Pays the Per Diem?

Q: I represent the buyer in a pending sale. The lender did not send the funds to escrow, and we need a four-day extension to close. The seller has agreed to the extension only if they receive $250 per day for each day past the original closing date. Since the delay was caused by the lender, they have agreed to cover the per diem. How should I write the addendum? Should it state that the lender will pay the seller $250 per day until closing?

A: An addendum to the Sale Agreement modifies the agreement between the buyer and the seller. Because the lender is not a party to the Sale Agreement, the addendum cannot require the lender to pay anyone. Instead, it should state that the closing deadline is extended and the buyer will pay the seller a per diem for each day of the extension. Any reimbursement from the lender to the buyer is a separate agreement between those two parties. The buyer may still want written confirmation from the lender about that reimbursement. As always, check with your Managing Principal Broker before proceeding.

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