Assignee's lender is coming up $20,000 short! What now?

Question

I entered into a purchase contract, my loan fell thru, so I  assigned to new Buyer. All contingencies were removed by assignee. Now, 3 days to close, and assignees hard money lender is agreeing to loan $20,000 less than needed. I have asked seller to split the $20,000 shortage, so deal would close on time, as agreed. They declined. (They will get $5,000 deposit if we fail to close in 3 days.) HM lender won't allow the Broker for assignee to credit Assignee a portion of commission at COE, to cover difference. I don't have cash on hand, in time to close. What incentives can I offer Seller to close this deal, after original COE date? I will still make profit if I waive $11,000 on my end, & assignee can come up with the difference, but, not in 3 days, in time to close per purchase agreement. Assignee REALLY wants home, and it's still a GREAT deal for both of us!  Any ideas  are appreciated!

Account Closed · Answer

As in Ojai?  I didn't know Miramonte was a town.

Account Closed · Answer

If it were me (and is has been, which is why I don't do assignments with hml buyers unless I know the lender), I'd go with J's suggestion first. Negotiate an extension for an increased purchase price.  Give you and your buyer enough time to come up with the additional cash.  Be aware that the time the property has been in contract has been in the seller's favor in this appreciating market in So Cal.  They might know by now that there is a spread they are missing out on and may want to keep the EM money and go on to the next buyer.

You may want to consider a bridge or transactional lender.  There are definitely people who would fund it in So Cal.  Some might be here on Bigger Pockets.

J Scott · Answer

Offer to put up a couple thousand dollars more (however much you have right now) in exchange for the seller extending the closing for another week.

Also, did you get a deposit from the end-buyer for at least as much as the earnest money you put up?  If so, at least you won't be losing money...

Ricky Ostrom · Answer

See if the seller will carry a second mortgage on the $20,000.

Jean T. · Answer

Mira monte, CA

Scott Williams · Answer

Where is the property located?

Jean T. · Answer

Thanks for your response. We both will have the money needed, but can't access in time to close Escrow.

Matt Devincenzo · Answer

Do you have 9K (20-11) to loan the buyer?

One solution to prevent this from falling apart (though you will be taking a risk) is for you to not take your assignment fee in cash but to create a 2nd for that amount with a shorter term so you can get paid out later.

Not sure if I would do it but it's the only way I can think to get something done in 3 days. Or the buyer could borrow on a personal loan if they can get enough...