When you say you can close quickly - what enables you to do that? Does that just mean you won't be requiring an appraisal, inspection, loan, etc. so you won't have to wait on that, or is it that you have some relationship set up with a title company where they will get it done quickly for you?
When I say I can close quickly, it means I have ready funds available so no appraisal, lender, underwriter etc is needed. For me it also implies no home inspections, termite, or request for repairs will be made. If they accept my offer for the price I've offered, it will be an easy, quick and painless experience. It helps to have a relationship with an escrow/title company, but that isn't necessary.
@David Stuffle It means all CASH and no contingencies. The title company is there to check on clear title and they will not work as fast as you want them to.
Thank you Derek and Christopher. I just wanted to make sure there wasn't some trick to closing quickly that I didn't know about.
If it helps...I used to write offers with really short closing times, like 3-5 days. But over the years have tended more toward 15 day or 21 day. If the seller is in a real time crunch, and that is the catalyst for the deal, I'll modify that. But otherwise a 21 day escrow has worked well. It doesn't stress out the seller to hurry and it's short enough to show I'm serious.
Good tip. Thanks @Derek W
So since there are no contingencies, do you just assume the risk of any major issues - termites, foundation issues, mold, etc? Has this ever come back to bite you?
You can (and should) still due your due diligence. But I satisfy my due diligence before I write the offer. By the time I've written the offer, I know I'm good to buy the house without any further inspections. If someone doesn't have lots of experience estimating rehab and cost maybe removing all contingencies isn't a good idea at first. But you can have inspections done in one day, so that part shouldn't hold up closing. It's really whether you are offering all cash, or need to get a loan that affects the closing time.
For me, I have found that the utility certifications for the lienable utilities can take really long. Sometimes the property tax certs too. Anybody claiming to close faster than those certs come through will be taking the property subject to the liens and outstanding bills due for those utilities and taxes - whether they realize it or not.
@Steve Babiak makes a great point that often times other factors are present that limits how fast you could close anyway. When offering on Bank Owned property, I always said 10 day close, knowing good and well the bank couldn't move any faster than 21-30 days. As long as you are not the one holding up closing, you're still within contract and no one will be upset with you.
Good information. I appreciate it.
Your turn time is ultimately depended on the type of transaction thats taking place, which more often than not will have something to do with where the funds are coming from, or who the lender ultimately is.
Cash transactions normally close the fastest because you have two principals transacting directly with eachother. Transactions where financing is required, trustor/trustee & beneficiary relationships are created, which normally require a little more due diligence and time to close. That translates to more paperwork and additional smaller moving parts within the transaction that come together to form the financing process (processing, underwriting, escrow etc).
If im not mistaken it seems like you were inquiring about all cash transactions where a buyer buys directly from the seller with cash. The turn time on those transactions has everything to do with the experience of the principals' and how motivated they are. Ive seen all cash transactions close in as fast as 7 days, ive also seen all cash transactions take up to 60 days (short sale). It all boils down to how many hoops must you jump through in order to legally close escrow on a deal.
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