Close Deals FASTER
Tags: closing deals
Category: Getting Started In Real Estate, How To, Market Timing No Comments 
Our friends at NAR found that 49% of home sales are NOT closing on time*.So I asked our local experts the following questions to help investors close more deals:
2. How does it affect house buyers?
3. Can investors do anything to improve their odds of an on-time closing?
4. What are the consequences of a late closing?
5. How can buyers plan ahead to minimize the impact of a late closing?
The number one reason for closings not happening on time is problems with the lender for the buyer. The number two reason is unrealistic expectations. I am presented with “hail mary” deals every day. Can you close in 48 hours yes but….1) is title clear? 2). Are all parties ready ie wires, locations, and inspections? 3) can the title company get the search and deed complete?
Most investor deals don’t have clear titles and there are hurdles that have to be worked thru. This isn’t something that happens overnight. Part of the reason investors get such good deals is because there are hurdles. A perfect deal can close super-fast but one that isn’t totally vanilla cannot. What usually happens for investors is their excitement that a great money deal is put together they want it NOW.
If the process is too rushed things could be missed resulting in consequences to both buyer and seller.
My next suggestion should be accountability. Receiving a preapproval for a buyer doesn’t mean an approval. Sellers/investors should talk to their lenders are on a regular basis. Know when the home is being appraised, what is the expected turn time in final underwriting, how much time it will take once the loan is clear that they can actually produce a closing package and schedule closing. Also different loans take different amounts of time to process. For example a USDA subsidy takes much longer than a FHA. FHA is longer than a low LTV conventional. My advice is you aren’t using a realtor is to get 2 or 3 lender partners that can help your buyers and can provide you with loan status.
Ed Tobey, REALTOR®, CRS, GRI of www.ftwaynehomes.com:
On deals requiring financing, appraisals and underwriting are taking longer. Underwriters seem to be
Under the gun to not let anything go by without scrutiny. It is best to allow more time for closing on
Offers. Otherwise you will need an extension to keep the contract valid. If the other party wants out
of the deal they won’t sign an extension. A seller could demand compensation for late closing.
Comments, questions, concerns… let’s hear ‘em!
Changes in the Buyer’s Finances
“Employment status alters. The individuals no longer have a steady source of income, which in turn looks like they may not to have the ability to pay the mortgage on a regular basis.
While in escrow something is purchased, un-covered or un-disclosed comes to surface that changes their [buyer's] qualification status and they are no longer qualified.”
Chantay Bridges
Not Completing the Contract on Time
“Not being familiar with the contract, real estate jargon or the process and when all the contingencies are not removed or important deadlines are missed” contracts fall through.
Chantay Bridges
Inspection Issues
“Inspection issues and their resolution are a reason — I like to see sellers have a home inspection before listing but few do. Environmental issues, especially underground tanks are another problem — they should be certified and insured.”
Dan Desmond
Lack of Communication
“I think that the main reason a transaction can fall out is lack of communication between all the people involved in the closing of a transaction. There are many people and documents involved, so many moving parts that something, somewhere can stop the whole transaction either temporarily or permanently.”
Sandy Segovia
Shortcomings of Short-Sales and Foreclosures
“Foreclosures – even though there are many – 1) some lenders are so restrictive they do not encourage people to buy their properties, they discourage them; 2) offers can take up to two weeks to process to get an acceptance or counter; 3) lenders are listing with any agent that completes forms, to the coop/selling agent, many are uncommunicative, work out of the trunk of their car or home, some even have part time or “real” jobs outside of real estate (of course the lender/seller doesn’t know this).”
Jim Fite
