Buying a Home – 10 Things to Know when Make an Offer #1 - Closing Date
I help people make lots of offers when they are Buying a Home. Often times when people find the home they want they just look at me and tell me to make an offer at a certain price. But there is so much more that goes into making an offer.
In this series of post I am going to cover 10 Things You Need to Consider when Making an Offer on a Home: Number 1 – Closing Date.
When Preparing an Offer on a Home you need to provide a closing date or a closing time line. On the standard California Real Estate Forms you need to either put a Closing Date or a Time Frame, like 30 Days, 45 Days etc.
This is an important consideration and you have to balance two competing factors – The Seller generally wants to close ASAP and so a Short Close makes the offer more appealing. However, as a Buyer you need to make sure there is time to close your loan. Don't believe the optimistic projections provided by your lender either – especially if you have a low down payment, FHA or First Time Buyer.
Failure to close on time can lead to penalties, a loss of the home if the seller decides to cancel the contract, and potentially the loss of a deposit. The most stringent and hardest to deal with when it comes to closing dead lines are Government Owned Homes followed by Bank Owned Homes.
There are occasions when the Seller would like to put off the closing – this is generally a traditional sale when the Home Seller is preparing for a move and needs to get their move organized.
Generally if you have most everything to your lender already and have been well qualified with a conventional loan I think you can do a loan in 30 days. If you are going Standard FHA or other first time buyer programs I suspect a minimum of 45 days is safe. This always varies and you should speak to your lender.
As a final date I generally prefer to put in a number of days it will take to close rather than a date. Sometimes sellers – especially government owned homes or banks – can take their time getting back to you and cut into your time to work on the closing.
On the other hand if you know or suspect the seller has a hard date they would like to close by then use that date if you can. Many Asset Managers have month in goals they need to make – and you should be willing to help them if it helps you get the home.
Remember the Closing Date you pick is very important!
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