Most agents who represent buyers purchasing an REO property are not aware of the Per Diem clause in almost every, 98%, of the amendments to the contract that are provided by the Lender. This 3 sentence statement can become a very big issue when the closing date arrives, here’s how. Two weeks ago I had an REO listing that was set to close on Thursday 11/15/07. Three days before closing, the Buyers Agent needed to have the REO Lender agree to allow the Buyer to pay for their own Title Policy ($1275.00) and have the REO Lender pay the same $1275.00 towards the Buyer’s pre-paids. Well that actually turned out to be a no brainer because all the REO Lender cared/s about was their Net so the REO Lender agreed to the change the very next day. Now that I have set the table here comes the meat of the article…On the day of closing the Buyer and the Buyer’s Agent arrived at their Title Company to close their side of the transaction. To their surprise the Buyer’s bank had not agreed to this new scenario concerning the $1275.00 being moved to pay the Buyer’s pre-paids on the HUD-1. After much anguish and pleading the Buyer’s Lender agreed to allow the $1275.00 to be applied to the mortgage fee but the paperwork would need to be re-done and the closing would have to be delayed until Monday 11/19. On Monday 11/19 the Buyer could not get off work in time to make it to the Title Company so it now came to close on Tuesday 11/20 at 9:00 a.m. and it in fact closed promptly. Did I mention something earlier about a Per Diem?  In this case the per diem was $150 per day charged to the buyer until the property closed, OUCH!!!The Buyer’s Agent called with his chest puffed out saying they were not going to pay the $750 fee and that was final, or was it? See the Buyer’s Title Attorney interrupted and pointed out they had already deducted the $750 from the Buyer’s Agent Commission. He went on & informed him that it was his fault as the Buyer’s Agent that it did not close on time because he had not sought the new lender’s approval and was further liable for any costs that the Buyer may have had to incur during those 5 days including the motel room and food, OUCH, OUCH OUCH!!!!!1  So if you have never worked an REO as a Buyers Agent please be forewarned that thereAre a few things that are different about this type of transaction…. As for the Buyer’s Agent in the story he called and asked me why I did not tell him about the Per Diem? My response was, we did and you said you could close tomorrow and it would not be a problem…..OUCH, OUCH, OUCH, OUCH !!!!   Thought Word & Deed…we as agents never know what a buyer can or will do before closing so please be careful what you promise with your statements!  The agent in this case netted $227 before his office split; he went on to say I never knew they would really charge us for that fee…To answer a question before it is asked…No the REO Lender does not pay the Buyer if the REO Lender can not close on time!