Want to close your next apartment transaction in 30 days? It's not going to happen.
Sellers and seller's brokers are realizing that the time frame for closing apartment transactions is taking much longer. In the last two years I have seen a constant stream of delays by lenders, which have resulted in escrow extensions or cancelled contracts.
What used to take 45 days to close a commercial transaction is now taking 60-90 days. Most Fannie and Freddie lenders will tell you upfront, expect 90 days. Commercial lenders are saying 60 days.
In harder hit apartment markets such as Inland Empire (Riverside and San Bernardino) expect the appraisal to take longer and underwriting to take an additional 10 days. Because the sales velocity is down it's also harder for the appraisers to find and compile "like-kind" comparables to give lenders the comfort level they need. My advice: do not let any money go hard until your loan is out of lender underwriting. Even after these approvals I have seen a few deals go sideways because the lender changed lending direction as the market changed.
San Diego, Orange County and Los Angeles are active apartment markets, yet slower than 2008. Astute brokers and apartment investors are being much more careful to allow enough time for longer escrows. It provides much less stress and a smoother transaction.
By Michael Duhs, Managing Broker of East West Commercial at (949) 939-8352. East West Commercial specializes in apartments for sale and senior housing in the counties of Los Angeles, Orange County, San Diego, Riverside and San Bernardino. East West Commercial is seeing its Commercial REO and Apartment REO business increase in southern California. Contact http://www.EastWestCommercial.com, http://www.CommercialREOs.tv, or http://www.REOapartments.tv for your source for properties available or coming to market.