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Will Your Escrow Close on Time? - Only 30% are making it to closing.

Riverside County closings are at an all time low of 30% on average.

What does this mean to clients who have their home "sold" and in escrow. Only 3 out of 10 property sales in Riverside County, California are making it to close. I would imaging that Riverside County is not the only place in the County experiencing this.

The drop, from an average close ratio of 70%, has been attributed to a combination of lending issues and foreclosure proceeding that were not stopped before close. Lending issues were the main cause of escrow "fall out". Only a small percentage of fall out has been attributed to foreclosure issues which might have been avoided through client and agent communication. Within the "lending issues" cause were sellers who cancelled because of extension requests from buyers or other issues related to escrow time extensions.

Mortgage industry issues have left fewer lenders providing funds and those lenders are, at this point, having to work double time to process loans. Particularly when it comes to Government guaranteed loans (FHA, VA, Section 184 and others) Investors are also requiring more information and taking their time investigating buyer qualifications and waiting for verifications of employment, assets and lastly, the verification of a properties appraised value. It simply takes more time to process the average loan, regardless of what some lenders will say when they are looking for business.

Although a 14 day, 20 or 30 day escrow is still possible....I would not count on ANY escrow closing on time. Not that it cant or wont happen....just doesnt count on it. You will be setting yourself up for an emotional roller coaster ride that may leave you as a statistic rather than being a successful home seller. Do you want to go through the process a second time? I sure hope not. Neither does anyone else involved. Whatever you do, do not buy another home, unless you are financially and emotionally prepared to do so, until your current home has closed escrow and the funds are in your hands.

So, what do you do when your home doesnt close on time?

Threatening your agent, escrow or anyone else will certainly not help your situation. Everyone involved has a vested interest in making it to the close. No one benefits when your escrow goes beyond the close date or fails to close entirely.

What can you do?

KEEP YOUR COOL!
Keep an open line of communication with your agent and escrow.
Grant an extension.
Ask for per Diem charges in Oder to grand an extension (ASK....Do Not DEMAND)
Be Patient....The answers you may want today may not be available....or known.
Keep your cool.
Ask to speak to the lender directly. Be polite as your agent has already rattled their cage.
Ask if there is anything that YOU can do to assist the buyer.
Keep an open mind.
Trust that all involved are doing everything they can to close the transaction.
Cancel and put back on the market.
KEEP YOUR COOL.

Remember that everything happens as it is supposed to happen. Adding additional stress to the situation will not make anything, other than the shortening your life span, happen any sooner. Rest assured, everyone involved is working behind the scenes to to get the job done. Keeping you cool may help you from becoming a statistic and having to see that "for sale sign" go up....again.

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Posted by Christopher Walker California Bank Owned Property on 09/26/2007 06:51 PM

Comments (13)

client education, riverside county real estate

Originally posted at: Christopher's Hemet CA Real Estate Blog - Mission Grove Realty: Will Your Escrow Close on Time? - Only 30% are making it to closing.

This post has been included in California Information Riverside County, CA Information

13 Comments on Will Your Escrow Close on Time? - Only 30% are making it to closing.

SEP

2007

Chris, 30% is not a good average. I would die in that market.

Geez. That is pretty bad. So far the ones I've had this year...regardless have closed. Hawaii is a different market anyway I believe. We don't have but a few forclosures and the majority of loans (minus 19%) were all fixed loans so we weren't hit too bad.

I do agree though that your tips are useful because anything can happen and there may be a need for an extension. I had to extend one day on the last one but only because it was signing of docs with client on mainland. The seller's agent kept harassing the LO...sad.

Chris - your stats are more dismal than I would have believed. Sorry to hear that.

But --- ahem ---- we have some lovely homes here in Toledo. If you take a notion to take a peek at them just come on up and give me a call. I love playing tour guide. :)

SEP

2007

Oh wow. I thought you were going to say that 30% didn't close within the original time frame, not that 30% of loans closed. That is a horrid market.

You have some great advice there for all of us to "keep our cool".

I just had one close last week (part of the 30%). It was like fingernails on a black board, but it's closed. With COUNTRYWIDE no less. Put that your pipe!

Daniel: It is tough but, much can be attributed to a simple lack of communication. I have been very "lucky" and not experienced any fall with many closings in the past few months. I have come close. Most have been because an escrow goes well beyond the scheduled close date (mortgage issues). Takes a lot of work to keep those sellers on board for the long haul. Well worth the wait in every case.....for everyone involved.

Sally: All markets are different. I think CA and Florida are the hardest hit. The folks in Hawaii seem to always have it together!

Carol: A temporary setback. Most markets will experience this at some point during this little mess we are in. Just have to adapt to the changes!

Kris: I would say that, on top of those figures, 75% or more do not close as scheduled. Quite a psychological nightmare but....have to keep moving along. A great learning experience if you are able to withstand the pressure.

Chris: Good for you young lady. This is not ALL gloom and doom. Just facts that we have to deal with and prepare clients for what seems to be the inevitable......longer time frames and bumps along the way. The worst part is the advice that some of these folks are getting from others in the middle of the transaction. EVERYONE is an EXPERT when they are not involved.

Yeah...right. We're just behind you guys by about two years....although i have to admit...the first time homebuyers in Hawaii wanted fixed rate loans and that's what saved a lot of people from getting into "trouble".

Do you think that Hawaii might be headed down the same path? I dont see it myself. If the current market were strictly economy driven, I would be with you on that. Our situation has little to do with economy and much to do about lending. Sounds like you will be just fine.........Mahalo!

30%! Holy cow! I wonder what our numbers are. So far, I haven't had any problems. But I've also had some very strong buyers who either paid cash or had excellent credit and plenty of down money.

I was surprised to hear 70% was LY average.

APR

2008

For all of you thinking that Hawaii is so great and not affected by lack of closers I can tell you I have a home there. It has been over a year that it has been on the market and it has fallen out of escrow three times two were on the last day even after everyone signed. So everyones affected even Hawaii. Not so safe.

JUL

I feel I am in escrow nightmare. Trying to by a foreclosure right now.... and they're not kidding! 30 days have gone by, another 30, I'm still not closed and now the bank/seller is trying to get a third appraisal because they think the property is worth more! Is this even LEGAL? Banks caring to get their foreclosures to be taken care of quickly has got to be the biggest lie out there. I still don't know if it is officially happening! I am a first time buyer and have excellent credit. No wonder people don't buy homes that quickly and the market hasn't gone up. Apparently the banks don't care about getting rid of these places THAT quickly...It has been a real drag. And yes, word continues to get around.

Unusual to hear of a lender looking to get an appraisal after having an accepted offer and in escrow. It sounds like there is more to the story. It is common for a buyers lender to verify the value but, in the case of a bank owned property, they have already done valuations prior to listing. If it is a short sale, it will be common, at various points though the long process, for multiple valuation requests. As a first time buyer, it sounds more likely that your own lender may be requireing an additional appraisal. In the case of true bank owned property sales, it is unusual to exceed 40-60 days in escrow. Delays are typically attributed to the buyer's lender. Hope your sale goes well....Congrats!

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