Attention Florida mortgage buyers! Beware and be ready with agents in the know. My business colleague John Meussner is sharing the pulse in today's mortgage market across the country. If not now, it will trickle down. Be prepared and have less stress during your transaction. A simple fix is writing in on or before 45 days from the beginning of the contract offer to closing. Florida real estate is booming in many areas and appraisers may be few and far between for lenders. Always check with lender on mortgage commitment date so timeline does not slip. Happy to help future home owners!
It's Time To Move Your Contract Period to 45 Days
PSA for real estate agents across the country - 45 days is officially your new 30 days. Think it's a benefit to go 30 days? Well, with the yield curve on treasuries officially inverting today, we're officially in a refinance boom. What does that mean? Longer turn times for lenders - literally every lender in the country is experiencing an influx of refinance volume - at levels I've NEVER seen before.
The last time rates were this low, consumers had nowhere near the levels of home equity they currently do. Last time they had home equity in the amounts they currently have, rates were closer to 6%. We currently have the perfect storm of huge rate drops (down from the 5's last November to the 3's today) immediately following a 24 month period of extreme home appreciation. For home owners, this means the time is now to refinance -either for rate/term refinances or cash out refinances (rarely is the market primed for both to offer such huge benefits).
For real estate agents, this means you're setting yourself (and more importantly, your clients) up for failure if you're still pushing 30 day (or if you're feeling muy loco, 21 day) escrow periods.
Lenders might still be telling you they can get stuff done in 30 days. And the reality is, they probably can (I can still, as of today, close a loan in 3 weeks) - but the margin for error we used to have is gone. Our operations teams (by our, I mean our entire industry's) are maxed out - applications are up, pipelines are bulging, and turn times are being effected.
If your option is to push for escrow periods of 30 days and almost guarantee a stressful closing for just about every party involved, or to set your escrow period at 45 days and ensure everyone is happy, all deadlines are met, and expectations are exceeded, WHY would you choose the former? Don't do it.
The verbiage everyone should be using is "45 days or sooner, if all parties agree", in any and all contracts where that's possible - and the biggest responsibility is for listing agents to properly explain this to their sellers. Buyers agents are still feeling the pressure of "our offer won't get accepted with more than 30 days" in many hot markets with tight inventory, so they're still going to push for 30 or 21 day escrows. Lenders, feeling the pinch and afraid of losing the business, will agree to this - and then everyone will be pissed off come closing time because deadlines are being missed or things are happening but at the very last minute.
Listing agents need to be the ones to set the escrow period longer, and communicate why to their sellers - set the expectations low, and exceed them, rather than trying to force something to happen that is in reality setting yourself up for failure.
The average time someone spends in their home is 9 years, or 468 weeks. Delaying entry by less than 2 weeks is not going to make or break most people or most transactions, and if you enjoy your reputation and prefer less stress over constant panic, my very strong recommendation is to begin using 45 days as your new benchmark for the home sale transaction.
Want to work with a lender that's keeping on top of market conditions and exceeding expectations? Give us a call at 484-680-4852 or bring your questions to an expert for immediate answers!
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