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Don't Expect To Close In 30 Days: Setting Expectations

Man in the wrong end of the hourglass - time engulfing him in sand Not long ago...way back in 2008 or so...one could expect 30 days from acceptance of terms to closing on a property to be reasonable. With few exceptions, this is an unreasonably swift expectation today.

Underwriting departments are swamped with work right now, and even the best of them are seeing 10 day to 2 week timelines for approval. Part of it can be attributed to the refinance mini-boom with interest rates being so low, part of it due to cutbacks in staff. Other reasons, well, I'm sure there are.

Rather than get buyers and sellers (agents too!) nervous & anxious as the deadline for closing approaches--still with no word on loan docs arriving for signature, why not set expectations to meet current conditions? Instead of putting a proposed closing date of 30 days on the offer, put down 45 or even 50 days - with the language "On or BEFORE" the deadline.

TucsonKent sitting on a tractor going nowhere...fast! That way, anxiety and pressure can be reduced on many fronts - buyer, seller, agent, loan originator...all across the board. Start the transaction like you're going for the 30 day close & get everything done. The documents will be there when they get there. Pushing & pleading isn't going to help get the impossible accomplished - in fact, it could delay things even longer. A stressed-out underwriter isn't going to be more efficient - and having someone breathe down their neck only adds to the problem.

One experienced mortgage broker told me the other day that this reminds him of the early 1990s when loans were taking 45-60 days to get done. I hope it doesn't go to the end of that scale, but if it does, the best way to deal with it is if the expectations are properly set at the beginning. That way, if it takes less time than expected, everyone's happy. If not, then it is on schedule & right on time, just like it was planned for.

Sometimes I feel like asking, "Would it help if I got out & pushed?" But the reality is...there's enough pushing already. Buying or selling a home is stressful enough for our clients - part of our job is to make sure we're not adding fuel to the fire.

Kent Simpson REALTOR®, e-Certified®, AHS® (with The Pepper Group™ Diversified Real Estate): Real Estate Agent in Tucson, Pima County, Arizona

Specializing in Buyer Representation in the Tucson, Arizona real estate market.

"Never forget - Real Estate Is About People"

Posted by Kent Simpson REALTOR® and some other alphabet soup on 02/13/2009 07:33 PM

Comments (19)

Transaction Timelines in the Home Buying Channel

transaction timelines, underwriting, setting expectations, buying a home, selling a home

Originally posted at: Tucson Kent's World: Don't Expect To Close In 30 Days: Setting Expectations

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19 Comments on Don't Expect To Close In 30 Days: Setting Expectations

FEB

Thanks, Kent! Excellent post! You are reporting exactly what is occurrin here in South Central PA in terms of closing time, especially with FHA loans. I feel for the underwriters right now...they are swamped.

Great post...and you are so right - underpromise and overdeliver!

Roseann, Susan - thanks for dropping by. I thank God I'm on this side of the Wizard's curtain!

We always put some number of days -- be it 45 or whatever and say "or sooner" .. saves writing added addendums at the end when things move a bit -- and it saves building expectations that are unrealistic and may not be met.

You are so right Kent! Have you been involved with an FHA 203K? If not, they take forever and ever. You need at least 50 days or more and the lender needs everything but the kitchen sink and if they even thought of that they would request that it be overnighted to them so they could check it out. Anyway, things are changing to fast that we have to adapt and change the way we do things. Keep up the good posts!

Bob & Carolin - I've always had the "sooner" or "before" in there too - you make a good point about saving addendum execution too.

Melinda - last time we used the 203K, a kitchen sink was one of the things the loan paid for LOL

It is amazing the difference from loan to loan, buyer to buyer and lender to lender - In the last 30 days I closed a VA loan in 14 days and have one going past its original estimated 45 day closing date......

I see few delays with our local lenders. They are glad to have the business. Stay local and the job will be done or they mat not get repeat business.

Wise words Kent...

FEB

Good news from St. Louis - we are seeing most deals close in 14 days. Where there are difficulties is where you have unique properties or where there is difficulty in finding comp sales. These transactions are running over 50 days. Some underwriters are using unreasonable criteria in their search for the perfect comparable sale which is causing most of the problems.

FEB

MORNING KENT! Yes great stuff! After you mentioned this on the phone the other day, I thought about it alot. Though I have been lucky lately, I decided to go ahead and just write the close for 45 days rather than having to write addendum's in case it doesn't close. Great advice! Nice talking to you as well - thanks for calling - I liked that! -- Gabriele

FEB

Kent, we tell our buyers to expect up to 6 weeks to close, but usually we make it in 4 or less around here. BTW I think that tractor needs more than a push.

Brian

Julie - there are always exceptions to the norm!

Eric - I haven't dealt much with the local banks, mostly local mortgage brokers...but even the ones with local processing & underwriting are seeing the backlog mounting up. Good comment-I'll have to check with our local credit unions & such.

Andy - thanks for dropping by.

Ryan - I hope the St. Louis underwriting pipeline stays relatively smooth.

Gabrielle - did you run those soccer kids to death the other day? All that Valentine's candy....LOL

Brian & Marie - the tractor is one I learned to drive on! LOL - if you learn to drive a stick on a tractor...a car is a piece of cake! (BTW-the photo is from the auction of my father's farm equipment when he retired and leased the farm to another farmer just south of us...think he got $25 for it.)

FEB

Closings seem to be going quite quickly here, with 30 days not being unreasonable. The part that is difficult is getting into escrow. Banks are taking 4-12 weeks to approve the purchase offer and open escrow. But once it gets to escrow, they are pretty quick to close since most everything has already been taken care of regarding inspections and negotiations. It also seems that many of our buyers here are foreigners picking up American real estate at bargain basement prices. They arrive with cash and know what they want. Cash purchase offer and closing in seven days.

FEB

In some cases we can have quick closes... such as certain REOs. However, 45 days is more the norm up here as well.

MAR

Kent,

How did I miss this one? Where in the world is that tractor located, and how did you come to be sitting on it?!

Mike in Tucson

MAR

Howdy there Kent

Just came by to see what ya, have been up to. Just like our friend Mike, I sure don't know how I missed this here post of yours. I sure do like your ride there.

God Bless America

Jim & Chuck - I'm glad to hear things are moving relatively normally for you guys.

Mike & Dale - Now why did I know that it would be you two commenting on my ride? LOL That is a photo from last year when my Dad auctioned off most of the farm equipment--we actually got $25 bucks for that tractor! Funny what sells at auction, huh?

MAR

Howdy there Kent

I've got to say. I'm real surprised, that Y'all only got $25.00 for that there Tractor. In the pass, I've see Tractor's like that one. Any were from $300.00 to $1000.00.

You sure can see and find, all kind of things at an auction. Thats for sure

Home Inspector

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