Real Estate Contracts: How Long Does it Take to Close on a New Home?
How long does it really take to get to a real estate closing? How long should home buyers give themselves to close on their real estate contracts?
The Big Closing Date Debate
Closing dates can be one of the most sensitive and important parts of crafting a Florida real estate contract. Not allowing enough time to close can be financially disastrous, not to mention incredibly stressful. Trying to stretch it out too long can increase costs, and reduce the number of viable properties to purchase. So what’s the perfect amount of days to allow from purchase contract to closing on your next FL property?
Sellers and Florida real estate agents love to push for short closing dates. It means Realtors get paid faster. Sellers love it because it means less time they have to fork out for holding costs. In a rising interest rate environment home buyers can also find it advantages to lock in mortgage terms, and close sooner. However, there are clear dangers of tight timelines.
The Risks of Trying to Close too Fast
There are many factors which can potentially cause unforeseen delays in the closing process:
- Clouds on title
- Renewing IDs for closing
- Waiting on condo association approval
- Waiting on COs (Certificate of Occupancy)
- Quirky underwriting demands from mortgage lenders
- New TRID regulations
As a home buyer, if you can’t close on time you risk losing your earnest money deposit. For some this may just be $1,000. For others this can be over $100,000. You may have other reasons to stretch the closing out too; for example not wanting to maintain the rental payments on your current place, and a mortgage at the same time. So choose a comfortable closing date, with some room to spare, and choose a friendly title company to escrow your deposit money.
Negotiating the Ideal Real Estate Closing Date
How fast can you close? Some buyers may be able to close in as little as 3 days. That is if they have everything together in advance and are paying cash. However, in the wake of the roll out of new TRID rules in late 2015 the National Association of Realtors has advised its members to seek 45 day closings to be on the safe side. Some buyers may even wish or need to go much longer than this. A 60 day closing may give plenty of extra slack. You can always close early if your mortgage lender is ready.
Securing a comfortable closing date can require some work for buyers. Don’t underestimate the importance of giving yourself enough time. If necessary consider smart negotiation strategies and offering ‘concessions’ to the other side in order to get the optimal amount of time needed.