Offering a quick close... important?

Question

I am very curious to hear about the experiences of other home buyers about this "benefit".

How often is a quick close (10 days or less) important to your motivated seller?

Personally, only one time was closing in less than 10 days an absolute must in at least 200 conversations I have had with motivated sellers.

Experienced investor, what is your experience with this aspect of a deal?

James Vermillion · Answer

I look at a quick close as one of several tools to use. There are some many different scenarios when it comes to real estate transactions and so many reasons a person could be motivated. In certain cases (divorce, home move, job relocation, death) sellers might jump at the opportunity to move the property even at a lower price.

When we put together offers we try to analyze what is important to the particular buyer and form our offer based on that analysis, but at the end of the day it doesn't hurt to offer a quick closing!

Andy M. · Answer

I regularly work with private sellers. I would say a quick close is preferred with most of them, but not necessary. That said, closing quicker is definitely a bonus and puts you ahead of competition sometimes. In all of my years I have probably only run into a handful that truely needed to sell immediately. I had one seller that needed to sell the next day. Luckily I was prepared (title wise) and closed him the same day we met.

Ryan Webber · Answer

Ok, Andy M., I'm going to have to expand on this because I know some more of the details. This was an absolutely EPIC negotiating tactic on your part, and this type of thinking is why you're a ninja at negotiating.

Andy knew one of the seller's major motivating factors was to close quickly, so what does Andy do? He has title work done and ready BEFORE he even looks at the house with the seller. Andy was ready to close RIGHT THEN when he made his offer to the seller. They could drive over to the title company and the seller could get his money IMMEDIATELY. Andy, of course, uses this to cinch the deal from his competitors.

That really is top notch problem solving. If you wanted to sell your house as quickly as possible, how could you not sell it to Andy?

Really, Andy, teach me your ways.

Account Closed · Answer

depends on motivation for private sellers..had a guy that needed tuition money for his daughter's college, as well as money for xmas presents...he was divorced and didn't see his kids often, but still wanted to contribute to the holiday...in his mind, it was very important since he didn't see them often...i bought that house before the week was over, and picked up a sweet rental...but for REO's, i think it just shows you're serious and willing to move for them

Account Closed · Answer

I don't think I've ever closed with escrow and title in less than two weeks. And that's often a real push for my title/escrow people. They can generate docs quickly if needed, but even with a rush order, the prelim can take well over a week. There are no longer any local title plants in my farm, so there's no in-house title at any of the major title companies. You can't do a same day closing here as funds have to be deposited and clear, even wire transfers need a day to clear. I suppose if I kept some funds sitting in an escrow account, they'd be ready to go for that one deal that had to close asap. :)

I've never had a seller have the closing date be a deal breaker. I figure out what they really need as opposed to want. There are some cash emergencies I can help with by disbursing funds early through escrow. I make up past due mortgage payments, pay off taxes before a pending tax sale, negotiate liens and delay court actions, etlc. before close if that's what it takes to make the deal work. I've fronted a lot of cash to heirs on probate deals that take months to close, but I was secured through assignments.

The older I get the better I get at the no rushing thing. Lots more rationality for everyone involved when the escrow closing is scheduled and we all work towards that date. It's not even a goal of mine to beat the competition by offering quick closings. Overnight title and instant funding is for bail bondsmen.

Steven Hamilton II · Answer

Short version: Most of the want it closed by the 25-26th or the end of the month. That is motivation. Must be bonus time for the asset manager.

-Steven the Tax Guy

Jason Grote · Answer

James Vermillion That is truly what it is about. Figuring out what is important to the seller and accommodating them. Top dollar is usually #1, but not always. Thanks James

Jason Grote · Answer

Andy M. I have pretty much had the same experience. Your right about the competition.... that may just give you the slight advantage you need over another buyer. Thanks Andy

Jason Grote · Answer

J Scott
I was hoping you would respond. Thanks for the stellar input! My original thoughts that moved me to start this thread were towards marketing sellers (via website, direct mail, bandit signs, etc.) and what their needs are. It sounds like these types are also rarely requiring a quick close from you.

Since we prefer to fund our projects with a local bank, we will sometimes offer a slightly higher offer for a 3-week close with the bank and a lower for a quick close with cash

J Scott · Answer

It's going to depend on the motivation of the seller. For an REO property, generally a quick close isn't very important, but I've gotten a couple REOs deals because I said I could close them in less than 2 weeks (before the end of the month in those situations), and surprisingly the banks got them done.

For short sales, quick closings don't usually mean anything, as long as you can generally close within 15-30 days after approval. I did have one short sale where the bank came back with an approval on a Friday that said, "The house is going to auction on Tuesday (4 days from now)...if you can close before then with these terms, we'll allow it." We closed on Monday (three days later) after a lot of hard work by the closing attorney.

For private sales, if you're dealing with an investor (buying a wholesale deal, for example), a quick close is going to generally be very important. When I sell to another investor, I want to be able to close within 3-5 days -- that's the most time it generally takes my attorney to pull title, get HOA/tax info, prepare the HUD and close.

If you're dealing with a homeowner, it's going to depend on their situation and whether they live in the home or not. If they live there, it's reasonable to assume that a quick close isn't going to be super important to them, as they still need to pack and move. But, if they don't live in the house, a quick close can be a great incentive to accept your offer, as they'll have cash in their hands in a few days, and that cash might be something they're desperate for.

In summary, it depends on the situation and the motivation of the seller, but there are definitely times when a quick close can help you get a deal done -- and by quick, I mean less than a week.

Offering a quick close... important?

Offering a quick close... important?

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