Often times as agents we come across certain questions or situations that are quite common to us, the job of a real estate agent is not only to help you but to educate the public on all things real estate. These next few blogs I want to address each situation and the common questions or fears that a buyer or seller may encounter. Each week will be a different topic - if you have a specific question please feel free to comment and I will make sure to either answer you directly or write a blog specifically to answer your question !
How Is The Closing Date Determined ?
Your closing date is determined usually between 4 - 6 weeks from the time you go into contract. Often times sellers will ask why the date on the sales agreement is different from the date in the contract. This normally will take place because the date on the sales agreement is 4 - 6 weeks from the day the offer is presented. If negotiations take a week, or there is a delay in order to perform a home inspection the attorneys will extend the closing date to give the buyer adequate time because of the delay.
What Is The Closing Date VS Commitment Date ?
In all real estate deals that involve a bank there will be a smaller window of time for the buyer to obtain their mortgage commitment - this is generally 30 - 45 days it is the most important part of the transaction. After the commitment is received there are still additional steps left to be able to get to the closing table including the title report and information they may request. These are the items that generally take a bit longer to pull together which is why they have 2 dates for these items to be completed.
Why Does The Kind Of Deal Effect Closing Date ?
All Cash deals tend to move a bit quicker because their is no bank involved so you move straight to simply waiting for a clear title without having to wait for the bank. Cash deals are still entitled to home inspections but typically the home will be sold as is so their will be no repair requests to be fulfilled.
Deals that involve the buyer obtaining a mortgage are at the mercy of the bank, unfortunately not even the buyer has any control on how quickly or slowly the wheels will go into motion. The bank appraiser will also play a role, they are a hired 3rd party and also do not answer to the buyer. The amount of time it takes for them to complete the appraisal and the bank to receive and approve it can take time. The larger the bank does not always mean they will move quicker than a smaller bank because they will have many loans that need to be serviced.
How Much Time After The On Or About Date Do You Have ?
There is a "grace period" from the on or about closing date, the reason why is because sometimes the timing of a move can be tricky. If the seller is moving into another home it may or may not be available, or buyers could be moving from another state or area. Because the timing is something that might need to be finessed a bit you are given 30 days from your on or about date to get to the closing table.
Can Either Party Require Closing Before The Closing Date ?
Typically no one can "force" a buyer or seller to close before the on or about date. Even if buyer and seller agree they want to move quickly getting it on paper involves a few other important parties. The attorneys of course will need to be available, but the schedule of the bank attorney as well as the title closer need to be available as well. This can sometime push a closing to a later than one may want - if you need to close quickly giving your agent a realistic date for them to help you navigate if the buyer or the home is right for you is very important.
Can A Seller Simply "Change Their Mind" About Selling ?
The seller can always change their mind, but often financially it is not recommend. If the seller defaults you can sue for specific performance forcing them to sell the home. They will also become responsible for the costs that you had from appraisal/mortgage fees, inspections, and even agents commission. Once you have hit the "On Or About Closing Date" if they seem to be a bit hesitant on the sale you can & should request a time of the essence letter to be sent out regarding your closing.
Can A Buyer Simply "Change Their Mind" About Buying ?
Just as a seller can back out with repercussions that same goes for the buyer. There are a few circumstances though for a buyer where they will not be in breach of the contract. If they are unable to obtain a mortgage, this is not something that they can just say. Their must be a letter from the bank which proves that they applied for the mortgage and it was denied. The buyer also has the right to re-negotiate if the home does not appraise for the sales price - if a new price is not agreed upon they have the right to not purchase.
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