The Closing Date - Certainty or Uncertainty?
July 16, 2009
When a contract is written for the purchase of a property, one of the terms will be the date for the close of escrow and transfer of title. Even though a purchase agreement may say within 30 days from date of acceptance, the escrow documents will contain a date certain. Buyers and sellers have always felt that this date was an absolute upon which they could rely to make their moving arrangements. Actually, it has always been a target and could vary depending on outside factors such as lender processing. In the past, however, the date was more often met than not and if a delay occurred, the delay was usually just a few days.
Well, in today's real estate environment, a closing date is still a target, but it is definitely a moving target. It is important for agents to keep in touch with their buyers and sellers and with escrow and with lenders to track the processing of the transaction. A closing date for a short sale is meaningless. A buyer of a property that requires a lender to reduce the valance owed by the seller can take months. Under President Obama's mortgage stimulus plan, lenders are improving, but an actual closing date upon which buyers and sellers can rely is still uncertain.
For a buyer purchasing a bank-owned property, the buyer is really pressured to meet the negotiated closing date. Banks insist that the closing date in the contract be met or they "punish" the buyer by charging a daily late fee - usually $100 a day for every day past the stated closing date. The buyer is caught as most often the delays are due to the length of time it takes for a lender to process their their loan. Banks want these properties off their non-producing inventories, but some latitude would be helpful in cases where the buyer has met buyers obligations and the delay is not of their doing.
The best way to deal with a closing date is to pay attention to the necessary steps n a transaction and to recognize that purchasing a property today requires flexibility in your move in or move out arrangements.
When a contract is written for the purchase of a property, one of the terms will be the date for the close of escrow and transfer of title. Even though a purchase agreement may say within 30 days from date of acceptance, the escrow documents will contain a date certain. Buyers and sellers have always felt that this date was an absolute upon which they could rely to make their moving arrangements. Actually, it has always been a target and could vary depending on outside factors such as lender processing. In the past, however, the date was more often met than not and if a delay occurred, the delay was usually just a few days.
Well, in today's real estate environment, a closing date is still a target, but it is definitely a moving target. It is important for agents to keep in touch with their buyers and sellers and with escrow and with lenders to track the processing of the transaction. A closing date for a short sale is meaningless. A buyer of a property that requires a lender to reduce the valance owed by the seller can take months. Under President Obama's mortgage stimulus plan, lenders are improving, but an actual closing date upon which buyers and sellers can rely is still uncertain.
For a buyer purchasing a bank-owned property, the buyer is really pressured to meet the negotiated closing date. Banks insist that the closing date in the contract be met or they "punish" the buyer by charging a daily late fee - usually $100 a day for every day past the stated closing date. The buyer is caught as most often the delays are due to the length of time it takes for a lender to process their their loan. Banks want these properties off their non-producing inventories, but some latitude would be helpful in cases where the buyer has met buyers obligations and the delay is not of their doing.
The best way to deal with a closing date is to pay attention to the necessary steps n a transaction and to recognize that purchasing a property today requires flexibility in your move in or move out arrangements.
posted by shirley harry at 8:03 AM
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