Now more than ever, buyers (and often sellers) want a speedy escrow closing. The standard escrow period takes 30 to 60 days to complete. The process can be slow and tedious, with lender approval, building inspections, title issues and “contingencies” written into the sales agreement.
Buyers and sellers get frustrated with the back and forth of providing documentation, signing off on inspections, negotiating who pays for what when defects in the property are found, and clearing up title defects such as old liens or easements that restrict the use of a portion of the property.
Let’s assume you have found the property you would like to buy, it is within your budget and it ticks all the boxes in terms of location, size and condition. You have started to prepare your existing home for sale — meeting with a Realtor to give you an idea of what will be needed to attract as many buyers as possible, such as correct pricing and doing necessary repair work.
Your Realtor may make a suggestion that your house be “staged,” or decorated and painted in a style that is currently appealing to the majority of buyers in the area. It is wise to listen to your Realtor’s suggestions and trust his or her expertise.
Once you have found a house you would like to buy, that purchase likely will be reliant on the sale of your existing house. With the current lack of inventory and high demand in housing, the ability to close quickly may make the difference between getting exactly the property you want and settling for a property that is less desirable.
How can you bypass a standard 30- to 60-day close of escrow and take the fast track to closing?
- Choose a Realtor who is well-versed in your neighborhood and has a proven track record of sales in the area.
- Tell your Realtor upfront that you want a fast closing.
- Consider offering your Realtor a higher commission than normal. If the standard for your area is 5 percent of the sales price, offer 5½ percent. If the standard is 6 percent, offer to pay 6½. This increase benefits your Realtor and the Realtor who represents the buyer.
- Get inspections done before you list your property for sale.
- You want to be able to sell your property “as is.” To do that, get inspections you feel might be pertinent to the structural integrity of the home for the roof, plumbing, foundation and other structural components, such as electrical, water, sewer, heating and other mechanical systems. Have information on environmental hazards such as lead, asbestos, mold and radon. If selling a condominium, provide a copy of the homeowners association bylaws and the association’s application for approval for new buyers.
Your goal is to sell your property to prospective buyers and do the legwork for them. Anticipate questions that may be asked and have answers in hand, with backup documentation if necessary. Be prepared to answer questions about things such as break-ins in your neighborhood or in your home.
- Check the title report you received when you bought the property and verify there are no outstanding title issues or easements that could be of concern to a buyer.Newsletter
- Contact the listing agent for the property you are interested in purchasing and say you would like him or her to represent you in buying the new property and would use the agent to sell your existing property. This gives the Realtor the potential of earning double commission — one on the purchase side and another on the sale side. “Dual agents” are bound by confidentiality, loyalty and full disclosure. Dual agency representation is legal in all states except Alaska, Colorado, Florida, Kansas, Maryland, Oklahoma, Texas and Vermont.
- Be upfront with your Realtor that you want a fast closing, such as seven to 10 days.
- Ask your Realtor which escrow and title company he or she recommends and which company has a record of handling fast closings. A closing company that your Realtor has worked with before can be helpful. He or she may have a good working relationship with that escrow officer and know what is required to help the closing move forward rapidly.
Not all escrow closing companies are the same, and you want a company that can provide fast title reports and is experienced in dealing with problems if they arise in the escrow process. Ask how busy the company is and ask for the senior escrow officer to handle your closing.
- You can do your own research of escrow companies by calling around about your specific needs and finding ones that state they can handle what you require within your time limit.
- Offer an all-cash, no financing contingency purchase.
- Offer to waive any contingencies, inspections or other specific clauses that would require further negotiation with the seller — or keep your contingencies to as few as you feel is justified. Do your best to keep your offer free of possible holdups that could make the seller less likely to accept your offer over others.
- Offer a larger down payment than typically required. Rather than 20 percent down, offer 25 percent.
- Stay in touch with your Realtor and closing officer daily. Most real estate documents can be signed digitally via a platform such as DocuSign. Anyone can sign and manage documents anytime, anywhere, on any device, eliminating the need to show up in person at the escrow or title company.
Some states require that the deed and loan documents be signed in front of a notary public. In those cases, the escrow company or lender will send the papers to you and you can hire a mobile notary to come to you to acknowledge your signatures at your convenience and choice of location.
- Ask the escrow officer for wiring instructions for you to send in your closing funds. Then notify your banking institution that you will be transferring a large sum to that company’s account. Ask for the time lag — if any — to wire the funds to be sure they arrive before or on the day of closing.
These tips are reliant on your advance research to find the property that fits your needs. You can gather information yourself online and in person, and/or contact a Realtor who has a record of sales in your area.
An expert Realtor can save you valuable time by providing documentation and statistics on the area you want, the pros and cons of that location, the trending appreciation in the area, if applicable, the proximity to schools, medical facilities and shopping, and workplace commute time.
Give your Realtor a wish list of the most important criteria you have. When you find the right property, you will be ready to act swiftly and close in record time.