Am I a Jerk for Asking Buyers to do this?

Buying & Selling Real Estate
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Am I a Jerk for Asking Buyers to do this?

Austin Hughes
Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes

I had a closing that was set to happen tomorrow. Everything was ready, but the buyers didn't have their ducks in a row, and closing will be extended 7-12 days.

I told my realtor to ask if they can cover my extra holding costs that will be incurred ($400).    Without ever asking the buyers, he has tried to make me counter against myself THREE TIMES to get me not to request this. Mind you, we haven't even asked the buyers yet. Could be a simple, "sure" or they might say "no."

The reason I'm asking you guys on BP is because he is so insistent that we not request this that I am wondering if I am oblivious. He says it will definitely hurt my reputation. Am I being a jerk? I never want to do be seen as a hard person to deal with, but am I expected to eat the cost of their mistakes? Please weigh in.

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JD MartinBusiness Member
Moderator
Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
8y

If there is no financial windfall to the buyer for the delay, and if there was nothing malicious about it, I would file it under "It happens" and leave it be. Unless you are giving the property away in a fire sale, I can't see how $400 is worth it to sink a deal. If anything, perhaps you might have your realtor suggest that they split the additional costs with you 50/50 ($200). 

If I were the buyer and you insisted, unless it was a smoking deal or a serious screw-up on my part, I wouldn't close under those terms. 

If you live and die by $400, then you probably need a better business model. If you asked me if you were being a jerk by insisting, I would say yes. 

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

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  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @Russell Brazil:

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

     Good to know the legal standing in your market. Hopefully laws are based on common sense. Where would you draw the line between a minor delay and one that you'd want to get compensated for?

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

     Good to know the legal standing in your market. Hopefully laws are based on common sense. Where would you draw the line between a minor delay and one that you'd want to get compensated for?

     My concern would be in keeping the transaction together.  At least under our customs...once you have made some sort of request for modification in writing, the contract then becomes open for negotiation, which could allow the buyer to bail altogether, or maybe make their own request to make it more beneficial to them.  Sometimes when you rock the boat, it will tip over.

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  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @Russell Brazil:
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

     Good to know the legal standing in your market. Hopefully laws are based on common sense. Where would you draw the line between a minor delay and one that you'd want to get compensated for?

     My concern would be in keeping the transaction together.  At least under our customs...once you have made some sort of request for modification in writing, the contract then becomes open for negotiation, which could allow the buyer to bail altogether, or maybe make their own request to make it more beneficial to them.  Sometimes when you rock the boat, it will tip over.

    I agree, keeping the deal together is always the primary concern. Do you think I'm wrong for asking for them to cover the holding costs?

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

     Good to know the legal standing in your market. Hopefully laws are based on common sense. Where would you draw the line between a minor delay and one that you'd want to get compensated for?

     My concern would be in keeping the transaction together.  At least under our customs...once you have made some sort of request for modification in writing, the contract then becomes open for negotiation, which could allow the buyer to bail altogether, or maybe make their own request to make it more beneficial to them.  Sometimes when you rock the boat, it will tip over.

    I agree, keeping the deal together is always the primary concern. Do you think I'm wrong for asking for them to cover the holding costs?

     It is not something I would do personally.  If a client asked me to do it for them, Id explain to them the risks, and when it inevitably blew up Id just shrug my shoulders.  Youve probably have a 20% chance of them agreeing to it,  a 30% chance of just pissing them off but nothing happens, and probably a 50% chance of it blowing up from some means you havnt thought about.

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  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    8y

    If there is no financial windfall to the buyer for the delay, and if there was nothing malicious about it, I would file it under "It happens" and leave it be. Unless you are giving the property away in a fire sale, I can't see how $400 is worth it to sink a deal. If anything, perhaps you might have your realtor suggest that they split the additional costs with you 50/50 ($200). 

    If I were the buyer and you insisted, unless it was a smoking deal or a serious screw-up on my part, I wouldn't close under those terms. 

    If you live and die by $400, then you probably need a better business model. If you asked me if you were being a jerk by insisting, I would say yes. 

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  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    8y

    @Austin Hughes I think without using the words "wrong", yes, he is basically saying that you should not ask them to cover the holding costs for the extra 7-12 days.

    That's what he means by "sometimes when you rock the boat, it will tip over."

    Just let this slide. It's only a week or so.

    3Reply
  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @JD Martin:

    If there is no financial windfall to the buyer for the delay, and if there was nothing malicious about it, I would file it under "It happens" and leave it be. Unless you are giving the property away in a fire sale, I can't see how $400 is worth it to sink a deal. If anything, perhaps you might have your realtor suggest that they split the additional costs with you 50/50 ($200). 

    If I were the buyer and you insisted, unless it was a smoking deal or a serious screw-up on my part, I wouldn't close under those terms. 

    If you live and die by $400, then you probably need a better business model. If you asked me if you were being a jerk by insisting, I would say yes. 

     Hey JD. Thanks for the input! This is what I'm seeking.    I don't think the deal would sink because of it.   There was no malice, just failure to plan properly.    

    I won't notice the $400 hardly at all. It's a very profitable deal. But I'm thinking about these things, and asking where else is money slipping out that I'm just saying "Oh, well..." It's a matter of keeping the reigns on my business, because little things like this add up over the course of the year with 20-30 flips. And it could be similar "Oh, well..." moments with contractors, professional services, materials, etc. You know what I mean?

    Just so it's clear--the agent hasn't even asked the buyers to do this. So I'm not digging my feet in. I wanted to open the conversation because of the real costs I'm incurring. If they said no, I'd probably just say "oh well" and wait until closing. It's not worth losing a sale over. So give me more feedback based on these facts, if you would.

    2Reply
  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @Russell Brazil:
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:
    Originally posted by @Austin Hughes:
    Originally posted by @Russell Brazil:

    Courts in my market have said that minor delays are simply part of the transaction and do not award damages, and often stop people from trying to exit a transaction due to a minor delay.

     Good to know the legal standing in your market. Hopefully laws are based on common sense. Where would you draw the line between a minor delay and one that you'd want to get compensated for?

     My concern would be in keeping the transaction together.  At least under our customs...once you have made some sort of request for modification in writing, the contract then becomes open for negotiation, which could allow the buyer to bail altogether, or maybe make their own request to make it more beneficial to them.  Sometimes when you rock the boat, it will tip over.

    I agree, keeping the deal together is always the primary concern. Do you think I'm wrong for asking for them to cover the holding costs?

     It is not something I would do personally.  If a client asked me to do it for them, Id explain to them the risks, and when it inevitably blew up Id just shrug my shoulders.  Youve probably have a 20% chance of them agreeing to it,  a 30% chance of just pissing them off but nothing happens, and probably a 50% chance of it blowing up from some means you havnt thought about.

     There are always the unknown things that can happen. Thanks for reminding me they exist. I appreciate your input.

    2Reply
  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    8y

    While, yes, some things you don't let slide, you do pick your battles.

    I would say that "Oh wells" such as this would fall under my "miscellaneous" category of numbers that I factored when I first analyzed the deal. That or I factor in an extra couple of months of holding costs when analyzing. 

    This would help make a person not feel like all the "Oh wells" over 20-30 flips was adding up because it was accounted for in the numbers anyway.

    3Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    8y
    Originally posted by @Austin Hughes:
    Originally posted by @JD Martin:

    If there is no financial windfall to the buyer for the delay, and if there was nothing malicious about it, I would file it under "It happens" and leave it be. Unless you are giving the property away in a fire sale, I can't see how $400 is worth it to sink a deal. If anything, perhaps you might have your realtor suggest that they split the additional costs with you 50/50 ($200). 

    If I were the buyer and you insisted, unless it was a smoking deal or a serious screw-up on my part, I wouldn't close under those terms. 

    If you live and die by $400, then you probably need a better business model. If you asked me if you were being a jerk by insisting, I would say yes. 

     Hey JD. Thanks for the input! This is what I'm seeking.    I don't think the deal would sink because of it.   There was no malice, just failure to plan properly.    

    I won't notice the $400 hardly at all. It's a very profitable deal. But I'm thinking about these things, and asking where else is money slipping out that I'm just saying "Oh, well..." It's a matter of keeping the reigns on my business, because little things like this add up over the course of the year with 20-30 flips. And it could be similar "Oh, well..." moments with contractors, professional services, materials, etc. You know what I mean?

    Just so it's clear--the agent hasn't even asked the buyers to do this. So I'm not digging my feet in. I wanted to open the conversation because of the real costs I'm incurring. If they said no, I'd probably just say "oh well" and wait until closing. It's not worth losing a sale over. So give me more feedback based on these facts, if you would.

    Based on what you wrote, I would let it walk. It's not unreasonable to keep a good hand on where money is being lost; on the other hand, anyone that does enough deals will know that in the long run the ledger usually breaks even. You lost $400 on 2 weeks of holding costs, but found out that the heating system on the next house that you negotiated $1000 off only needs a $50 part. You probably don't go back and give the seller $950 so that everything is fair; you reap the windfall.

    The human animal is good at remembering what it wants and forgetting what is inconvenient.  

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  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y

    So, I'm checking you guys out @JD Martin, @Nicole A., @Russell Brazil... And all 3 of you seem to be speaking from experience and have great businesses, so I will defer to your judgement. I appreciate the perspective and honesty.

    THANKS! :D

    2Reply
  • Chris T.
    Investor · Downers Grove, IL · Member since 2015 · 1k+ posts · 955 votes
    8y

    This is where I feel real estate agents add value in a real estate transaction. 

    You were not happy about the delay, and expressed that to your agent. Your agent did not go back to the buyer due to the risk/reward. Perhaps he could have communicated to you in a different way.

    I would drop bringing up the $400 extra holding costs now. But if they give you issues on the final walk through, that would be your card not to give in anything.

    This happened to me as a seller. Our negotiation was mostly one sided in the buyer's favor. We threatened to walk away, and well the buyer called our bluff. We had little interest on the MLS, hence we don't have much leverage.

    This continued all the way to the final walk through, when the buyer asked for a $100 credit for bricks under the porch. (not part of the inspection report as well)  Naturally, we were pissed but both agents split the cost to push this through. 

    If I were to deal with the buyer directly, this transaction would have been lost. 

    3Reply
  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    8y

    Glad we could help, and congrats on your latest upcoming closing!

    1Reply
  • Tony Gunter
    Investor · Canton, GA · Member since 2014 · 727 posts · 500 votes
    8y
    Torpedo a deal over $400??!! Sorry, not trying to be a jerk, but suck it up buttercup. It’s part of the game we are playing.
    4Reply
  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @Tony Gunter:

    Torpedo a deal over $400??!!

    Sorry, not trying to be a jerk, but suck it up buttercup. It’s part of the game we are playing.

     Glad I asked. I thought of it as..."It can't hurt to ask." But apparently it's received much more abrasively.

    1Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @Chris T.:

    This is where I feel real estate agents add value in a real estate transaction. 

    You were not happy about the delay, and expressed that to your agent. Your agent did not go back to the buyer due to the risk/reward. Perhaps he could have communicated to you in a different way.

    I would drop bringing up the $400 extra holding costs now. But if they give you issues on the final walk through, that would be your card not to give in anything.

    This happened to me as a seller. Our negotiation was mostly one sided in the buyer's favor. We threatened to walk away, and well the buyer called our bluff. We had little interest on the MLS, hence we don't have much leverage.

    This continued all the way to the final walk through, when the buyer asked for a $100 credit for bricks under the porch. (not part of the inspection report as well)  Naturally, we were pissed but both agents split the cost to push this through. 

    If I were to deal with the buyer directly, this transaction would have been lost. 

     Chris brings up a great point here. I think the actual true reason agents exist is to add liquidity to the market. As he points out if he had to deal with that buyer directly, the deal dies. Agents insert themselves in between to make things happen because for whatever reason 2 reasonable individuals become completely unreasonable when trying to buy/sell a property from one another.

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  • Account Closed
    Downers Grove, IL · Member since 2017 · 366 posts · 165 votes
    8y

    Had this happen years ago when I was an LO handling a new construction. The  builder was completing many things at the last minute. Appraisers were very busy at the time. I didn't want to try and get the appraiser out there twice, because of additional fees to buyer and how busy appraiser was. Well the builder completes everything at the end of finance contingency not allowing time for appraisal and underwriting. Than hits buyers up with stiff fees for extending closing. It was wrong but they had given up their lease, and either had to let the builder have sex with them, or move everything twice and risk fighting over escrow funds. The builder probably thought he could sell for over their contract price, so had little to lose by being so difficult. 

    I think what make sense depends opon everyone's alternatives. 

    1Reply
  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    As mentioned above, you asking them to reimburse ends up being a counter offer to your previous deal.  If they had any cold feet this would be their chance to walk.

    When you get to this stage of the transaction the lenders, realtors, etc will try to do anything to make it close.  They have put quite a bit of time into it and don't want to lose their paycheck.  This is where you always wonder who's best interest they have in mind in however this amount is minimal and they are doing you a favor by not presenting a counter offer.  If you pushed him hard enough the realtors would probably take it out of their commissions but you would burn a bridge or two on the way.

    Don't count your money before it is in your pocket.  Right now you have a liability sitting there and unless the market has improved it will cost you more to punt this transaction.

    2Reply
  • Grant Rothenburger
    Investor · Taylor Mill, KY · Member since 2016 · 2k+ posts · 964 votes
    8y

    @Austin Hughes I personally don't think that $400 is worth the risk of them walking away and getting $0.

    1Reply
  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @Grant Rothenburger:

    @Austin Hughes I personally don't think that $400 is worth the risk of them walking away and getting $0.

     Agreed. And you work for the Best Ever Podcast? Very cool job haha.

    1Reply
  • Austin Hughes
    OP
    Rental Property Investor · Lubbock, TX · Member since 2015 · 458 posts · 183 votes
    8y
    Originally posted by @John Woodrich:

    As mentioned above, you asking them to reimburse ends up being a counter offer to your previous deal.  If they had any cold feet this would be their chance to walk.

    When you get to this stage of the transaction the lenders, realtors, etc will try to do anything to make it close.  They have put quite a bit of time into it and don't want to lose their paycheck.  This is where you always wonder who's best interest they have in mind in however this amount is minimal and they are doing you a favor by not presenting a counter offer.  If you pushed him hard enough the realtors would probably take it out of their commissions but you would burn a bridge or two on the way.

    Don't count your money before it is in your pocket.  Right now you have a liability sitting there and unless the market has improved it will cost you more to punt this transaction.

     Great advice all around, especially talking about counting money before it's in my pocket.

    Yeah, I don't want to burn a bridge. I want to build them! I guess I see it as something I would do as a buyer if requested, but we just add this to the list of things that I do differently than others lol.

    1Reply
  • Account Closed
    Canton, OH · Member since 2018 · 118 posts · 63 votes
    8y

    @Austin Hughes  I won't say you are being a jerk, that's kind of harsh, but you are risking the deal.  If you are worried about losing $400, are you willing to risk the additional costs you will incur which will be much more than $400, if you lose the current buyer? It sucks and I'm sorry this has happened to you, but sometimes you just have to judge what is worse and try to be patient.   I think that is what your realtor is trying to tell you.

    Good luck! :-)

    2Reply
  • Sid Bogue
    Member since 2018 · 4 posts · 1 vote
    8y
    I just purchased a property and had a really hard time getting the loan with the original lender. They kept asking for this and that when I sent ALL of it to them in my original email to them. They originally wanted 20% down and then went to 30% down and closing costs were crazy at $7,700. I kept the seller informed of what was going on the entire time and finally just went to my local bank, a portfolio lender, and asked if they would do it for me. I was done in a week with them, but it was 3 weeks after the original close date. I think these are things that happen sometime and I am happy that the seller was understanding. That being said, communication is key. I think as long as they have made a good faith effort to get things done, you should hold on to the deal.
    1Reply
  • Alexander FelicePro Member
    Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
    8y

    did you have the contingency for overages set before this happened? or are you just trying to capitalize on a small delay in closing?

    delay in closings happen all the freaking time, don't let it get you wound up. Keep your eyes on the long game, the big win.

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