H. Close of Escrow
Home purchasers are typically required to close as soon as possible after the new home is complete and proper notice has been provided. Some homebuilders assess additional fees for “mail out” closings or “power of attorney” closings due to the additional administrative costs and additional time required for close of escrow. Delays in closing create significant additional costs for the homebuilder, so many new home contracts provide for fees, sometimes assessed daily, for delays in closing caused by the purchaser or the purchaser’s lender, as demonstrated in the following examples from a new home contract:
CLOSING AND CLOSING COSTS. The closing of this transaction (the “Closing”) shall occur following Completion of the Residence (as determined in accordance with Section 6C above) on a date to be specified in a written notice (a Pre-Closing Orientation Letter) to be provided by Seller to Purchaser. Seller shall provide Purchaser with the notice provided for in the foregoing sentence at least thirty (30) calendar days prior to the date Seller designates as the date for Closing; provided, however, that Seller shall not be responsible for any damages if Seller, due to circumstances beyond Seller’s reasonable control, is unable to proceed with the Closing on such date. Following Purchaser’s receipt of such notice, Purchaser shall then arrange to sign Purchaser’s loan and Closing documents and deposit such items in escrow. Under no circumstances shall Seller be responsible for temporary housing, furniture storage, moving expenses or other costs, fees or expenses related in any way to the timing of the eventual completion of the construction of the Residence or the Closing. In the event Escrow Agent is closed for business on the day specified for Closing, the Closing shall occur on the next day Escrow Agent is open for business. Subject to the credit to which Purchaser may be entitled pursuant to Section 2B, Purchaser shall pay for all title, recording, closing and escrow fees, costs and charges relating to this transaction and all fees, costs and charges related to any financing obtained by Purchaser for this transaction. All taxes, special assessments and regular assessments and Association assessments affecting the Residence shall be prorated as of the Closing. Purchaser acknowledges that Purchaser’s personal presence in Escrow Agent’s office at Closing will facilitate a timely and cost efficient Closing. If Purchaser fails to be personally present in Escrow Agent’s office for the Closing or wishes to complete the Closing using a third party acting pursuant to a Power of Attorney, then Purchaser shall at Closing pay Seller an additional $1000.00 to cover additional fees incurred by Seller associated with such Closing, including additional mail out fees and administrative time. At or before the Closing, Purchaser shall deposit with Escrow Agent or Seller: (a) the balance of the Purchase Price due and payable to Seller; (b) an amount equal to all closing costs and additional costs or expenses payable by Purchaser pursuant to this Agreement; and (c) a sum equal to any assessments and any other amounts due and payable to the Association as required pursuant to the Declaration, which sums shall be released by Escrow Agent to the Association at Closing. All amounts payable by Purchaser at Closing shall be paid in cashier’s check or certified U.S. funds. Possession of the Residence shall be given to Purchaser only after the funding of Purchaser’s loan and payment of the entire Purchase Price
SELLER’S PRE-CLOSING REMEDIES. In the event Purchaser fails, prior to Closing, to fully and timely comply with any term or provision of this Agreement or if Purchaser advises Seller in writing or orally that Purchaser does not intend to or will not fully perform any provision of this Agreement, Seller shall have the right to cancel this Agreement and recover from Purchaser, as liquidated damages and not as a penalty, an amount equal to the sum of the Deposit and all Additional Deposits and all other deposits and payments of any kind paid by Purchaser (collectively, the “Deposit”), and Seller shall be entitled to retain the Deposit to the extent previously paid to Seller and to receive any amounts than held in the Escrow by Escrow Agent and apply such sums toward such liquidated damage amount. Purchaser hereby acknowledges that the amount of the damages suffered or incurred by Seller as a result of a default by Purchaser under this Agreement would be extremely difficult and/or impractical to ascertain and that the liquidated damage amount described above constitutes a reasonable estimate of such damages. In the event Purchaser does not close on the date specified by Seller through no fault of Seller and provided Seller does not elect to cancel this Agreement as a result thereof, than the Closing may upon the agreement of Purchaser and Seller be extended for a period of time agreed to by Purchaser and Seller provided Purchaser must pay to Seller in advance of any such extension in cash, cashier check or wire transfer an extension fee equal to $500.00 per day for each day between the date the Closing was scheduled by Seller to occur and the date to which the Closing is to be extended. Such extension fee shall be an additional cost payable by Purchaser, shall be non-refundable to Purchaser and shall not be applied to the Purchase Price.