Investor · Potomac Maryland · Member since 2020 · 81 posts · 46 votes
Has anyone encountered this with hard money guy trying to postpone closing date and contract stipulates I will be paying steep penalties if I dont close.
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
6y
It depends on the reason:
1. If it is title issues, then you shouldn't want to close, and your contract should stipulate that the seller has 30 days to fix title issues without any penalty to you.
2. If you were slow in getting the lender what he needed in order to complete his evaluation, then consider that it may be your fault. (Not saying it is, I don't have enough information to know that, just bringing up the possibility.)
3. The lender is small and he committed to the loan without having the actual funds fully available in his account (waiting for another payoff, or waiting for one of his investors to fund, etc.)
4. The lender is in the business of taking junk fees without actually closing a deal. Did you pay him an application fee or some other fee up front?
5. He's just disorganized and didn't transfer the funds from some other source in time.
6. He's out of money and was committing to deals he didn't have the funds for in the hope that he'd have the funds by the time he needed them. These are usually small lenders.
Suggest you find another lender LOCAL to you with a good reputation from other borrowers in your area.
Specialist · Delran, NJ · Member since 2016 · 2k+ posts · 951 votes
6y
It can happen with any kind of lender and I have heard of it and dealt with it before from my clients. Why are they looking to postpone? How far off is the closing date?
Real estate investor · Pasadena, MD · Member since 2016 · 165 posts · 258 votes
6y
Find a new hard money lender. Most can get you funded in a week or less. Either the lender isn't legit or he is a small operator and doesn't have the funds. Contact me if you need some numbers for local HML's.
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
6y
It depends on the reason:
1. If it is title issues, then you shouldn't want to close, and your contract should stipulate that the seller has 30 days to fix title issues without any penalty to you.
2. If you were slow in getting the lender what he needed in order to complete his evaluation, then consider that it may be your fault. (Not saying it is, I don't have enough information to know that, just bringing up the possibility.)
3. The lender is small and he committed to the loan without having the actual funds fully available in his account (waiting for another payoff, or waiting for one of his investors to fund, etc.)
4. The lender is in the business of taking junk fees without actually closing a deal. Did you pay him an application fee or some other fee up front?
5. He's just disorganized and didn't transfer the funds from some other source in time.
6. He's out of money and was committing to deals he didn't have the funds for in the hope that he'd have the funds by the time he needed them. These are usually small lenders.
Suggest you find another lender LOCAL to you with a good reputation from other borrowers in your area.