Need Help- First time Multi-family- Counter Offer Question

[Raven Starr]

Aloha 🌺

I'm so happy to be apart of this mastermind and I'm hoping to get some insight on a deal. It's my first multi-family deal so I am a Rookie and I greatly appreciate any help I can get with this scenario.

The sellers have counter offered asking for an additional $50,000 earnest money deposit after the inspection period. If I move forward after the inspection period is over and my lender is not able to close on time, I would loose my deposits (total of $175,000).

I don't feel that this is a fair since my lenders ability to close on time is out of my control. I have been told that this is common in commercial real estate.
The loan is commercial but it's still a residential multi-family deal. Either way, is this common practice, for the buyer to forfeit their earnest money deposits if the lender doesn't close on-time?

Huge Mahalo for your guidance and sharing your knowledge 🙏🏼

[Taylor L.]

This is a fairly common situation. They don't want you to back out, but you don't want to lose out in case something happens outside of your control and causes additional delays.

Can you counter and request paid extensions? If you're willing, agree to put down the additional $50k, but you get the option to extend a certain number of times if your lender delays, but for each delay you'll put down an additional $xx,000 deposit. You might aim for 2 such extensions for 30 days apiece.

The additional deposit shows you're serious and not backing out or delaying with no reason. We've happily accepted that in the past and would again in the future. It does up the risk on your end each time you extend, but it also shows you're serious.

The real question is how badly do you want the deal & how good is it?