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The end of the month real estate scramble culminates today! Then it’s on to the next.

By
Real Estate Broker/Owner with Richard Weisser Realty

End of the month is a wild ride in real estateToday is the last day of March. In the world of real estate, the last business day of the month is typically the busiest for closing properties. And I have always wondered if it’s more about tradition than anything else.

Since mortgage payments typically are paid on the first day of the month, there has always the notion of the seller not having to make the next month’s payment and the buyer not having to pay an interest adjustment.

But in the seller’s payments are in arrears, and the prorated payment is added to the payoff amount anyway, and for the buyer, it’s actually less expensive to pay the interest-only adjustment and have the first payment delayed an additional month.

And buyers that currently have leases typically have to be out of their current rentals by the first of the month, leaving precious little time to move, let alone allow for any slack time if anything goes wrong.

So since there is no economic or practical benefit to closing on the last day of the month, it has to be more of a tradition. We are mentally trained that house payments and rent are associated with the first of the month, and that therefore, when a contract is constructed, the last business day of the month seems like an appropriate target.

And so today, like every other last day of the month in the real estate business will be a busy day.

And I will be scrambling!

Comments (16)

Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX
Real Estate Agents

Happy scrambling with you too!

Mar 31, 2010 12:04 AM
Home Design
Alpharetta, GA
Home Design and Real Estate

Richard this may be the busiest month of the year for all of us.  Good luck, and let's all take vacations in May!!

Mar 31, 2010 12:13 AM
David Jirasek
Jirasek Realty, LLC - Temple, TX
ALC, CCIM

With it being the busiest closing day of the month generally, as the buyer pays less loan interest, the title company staff can't spend as much time as ordinary, should a file need more attention. The other thing is, that if the Seller has delinquent taxes, the title company is forced to add an extra month of interest to the delinquent taxes as the title company will not have time to get them paid the day of closing, therefore, the Seller if forced to pay an extra 1% penalty, unless its June 30/July 1, then in Texas, in addition to the 1% there is an additional 15% attorneys fees added too! With my discovering lenders dragging on closing and missing closing dates, and delinquent property tax issues (if applicable), etc, I have quit writing the last day of the month to close in the contract anymore. I shoot for one or two days before. It avoids these issues.

Mar 31, 2010 12:19 AM
Paddy (Patricia) Pizappi
Better Homes and Gardens Rand Realty - Pine Bush, NY
Real Estate Associate Broker Hudson Valley NY

Good luck with your end March madness.  have a great Wednesday and a wonderful month to come. 

Mar 31, 2010 12:20 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Richard....the end of the month is our favorite time of the month.....my team members have several closings today....hope they all go smoothly.

Mar 31, 2010 12:25 AM
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

Richard, paying the odd days interest, early in the month is a tale of pay me now or pay me later. I guess if you are that strapped for cash an end on the month (mortgaged sale) is better, but it all works out the same eventually.

Mar 31, 2010 12:30 AM
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Loreena...

I always get nervous right about ... NOW! THX

Jennifer...

We have a lot in the works right now. Thing are really looking up fr this year. Thanks.

David...

We prefer the second week of the month ... it is always a lot less hectic. Thanks.

Mar 31, 2010 12:37 AM
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Eighteen Years Experience in Brevard County

Some traditions are hard to break - for the reasons you listed. Good luck with your day!

Mar 31, 2010 12:51 AM
Michael J. O'Connor
Diamond Ridge Realty - Corona, CA
Eastvale - 951-847-4883

The other factor these days are banks trying to clear the books of their REOs and non-performing shortsales so that they end the quarter a little bit 'cleaner'.  Have a great day!

Mar 31, 2010 03:01 AM
Coleen DeGroff
Coldwell Banker M.M. Parrish Realtors - Gainesville, FL
Haile Plantation Real Estate - Gainesville FL

Richard - Congrats on having another scramble day there, buddy! Sounds like you need to put your running shoes on! :)

Mar 31, 2010 03:40 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

the only economic benefit is the "pre paid" interest that comes out of pocket at closing... if you close on the 15th you have to come up with 15 days of interest at the closing.  So when... "we just barely have enough savings to do this" people buy, closing at the end of the month can make it easier.

Mar 31, 2010 07:41 AM
Robert L. Brown
www.mrbrownsellsgr.com - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

The end of the month is a trip. But i'd rather be in the midst of a few closings"at the end of the month".

Mar 31, 2010 08:10 AM
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

I got real lucky this month Richard. All or my closing s were mid-month. Not one end of the month closing! I think it was because we didn't have to deal with any lenders on the buyer side.

Mar 31, 2010 11:04 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Richard:  Glad to hear you are busy with closings.  Had two myself today.  The second one was a nail biter, but went through.

Mar 31, 2010 01:47 PM
JL Boney, III
Coldwell Banker - Columbia, SC
Columbia, SC Real Estate

I had a little scrambling today for the end of the month, but I am more of a middle of the month kind of guy.

Mar 31, 2010 02:26 PM
Susan Mangigian
RE/MAX Preferred - West Chester, PA
Chester & Delaware County Homes, Delaware and Ches

Hi Richard!  Catching up on your posts this morning.  All, as always, wonderful.  I always try to schedule my closings, if possible close to the end but off by more than a few days.  The next few months should prove to be busy beyond belief as everyone scrambles to meet the deadlines for the tax credit!

Apr 01, 2010 02:43 AM