6 Tips to Speed Up Closings
December 13, 2016
Home buyers in a hurry to move into their new house may be discouraged to know that the average time to close on a property is 50 days, according to Ellie Mae. But you can help your clients shorten the timeframe by encouraging a more focused home search and being proactive about paperwork, among other things. An organized buying process is particularly important for relocation clients and customers who are simultaneously selling, both of whom typically are working against tight moving deadlines. Share these tips with buyers to help them get a transaction completed in a shorter amount of time.
- Get pre-approved, not just pre-qualified. A pre-qualification is just a quick conversation with a lender who may glance at the borrower's credit score. However, a pre-approval is a more thorough review of their credit history. "It makes your offer look stronger," says Adriana Mollica, a sales associate with Teles Properties in Beverly Hills, Calif. "It also minimizes any surprises that may delay or force a cancelation during escrow."
- Urge clients to narrow their options. Buyers who have a long wish list of home features will rarely be satisfied by the houses they see. This is an opportunity to have a heart-to-heart with your client about whether their desires are plausible for the area and price range they are searching in, says Michael Shaffer, broker-associate at LIV Sotheby's International Realty in Greenwood Village, Colo. Have your buyers narrow their wish list down to their top must-have features, and encourage them to look at only those homes that fit the criteria.
- Look at homes that have lingered on the market. Homeowners who haven't been able to sell quickly enough are often the most motivated to negotiate a deal. Help your buyers understand the leverage they have when making an offer on a home that has been on the market for a long time. But remember that "a long time" means something different in various areas. "In some markets, that may be a week or two," Shaffer says. "In others, it could be a year or more."
- Don't make lowball offers. Tell your clients a strong offer doesn't have to meet the full list price — but it may mean vowing to make a larger down payment, offering up more earnest money, or accepting an early closing date. Sellers who have a sense of commitment from your buyer may be more likely to accept their offer, particularly as the end of the year nears.
- Waive contingencies — maybe. Contingency clauses are notorious for sparking delays, but your buyers should weigh whether to give them up. Some contingencies may be worth fighting for. Be certain your clients won't suffer from buyer's remorse or land in financial trouble if they waive contingencies.
- Put paperwork in order. Encourage your buyers to have at least three months of bank statements, pay stubs, and letters of explanation for any unusual expenses or financial gifts being applied toward a down payment. Even with a pre-approval, buyers will still need paperwork to finalize the transaction, and having it ready up front could save time. "In most cases, things get held up because paperwork and information isn't readily available," says Raena Casteel of the Casteel Little Real Estate Group in Tucson, Ariz.
Source: “Got the Need for Speed? 10 Timely Tricks for Buying a Home in a Hurry,” realtor.com® (Dec. 12, 2016)
Updated: October 15, 2019