SMOOTH CLOSING TIP #1
What's in a day? In real estate, people have preferences as to what day things close. But there are good days and bad days for closing. Here are a few factors you should consider when writing - or accepting - an offer for your clients. Discuss these issues with them.
- Wherever possible, don't close on Friday or Saturday or Sunday. Thursdays are a much better choice. Here's why.
- Everyone wants to close Friday. It is the biggest close day of the week - and it's much worse at the end of the month. How can you get attorneys and banks attention if they have 4 closings? You can't - so avoid the crowd.
- Banks process closings by close date - not by when they started the application. Yep! It sounds stupid, and it is, but most banks work hardest on those closing soonest. If you're closing Thursday, your file is on top of all the Friday closings every day.
- Small delays are common. Stuff happens. If it happens on Thursday, you can go to record on Friday, and buyer and seller have the weekend as they wanted. If things go south on Friday, everyone needs to wait till Monday (or Tuesday for a long weekend!). This can have MAJOR IMPACTS. If your seller needs the funds to buy their next house, than two closings will be impacted. Movers charge extra to re-schedule last minute. And oftentimes, buyers and sellers have taken time off to move - and now are stuck. Don't assume that your buyer will get keys if its not on record - they often won't. And your seller needs to think hard about giving over keys. If it's not recorded, they have little financial recourse if things happen over the weekend.
- Don't sweat the end of the month. Most buyers feel that they should close near the end of the month. They are told they will have lower closing costs - and they will - but what they "save" is a 30 day illusion. If you close on May 31st, your first mortgage payment will be on July 1st - just 31 days. If you close on June 5th, your closing costs are higher (the bank takes a payment in advance from June 5th to June 30th), but you won't have a mortgage payment until August 1st, which is 56 days away! Bottom line, it all comes out in the wash - but as before, if you close in the middle of the month (on a Thursday, right?) then you'll get a lot of attention from Banks and attorneys - much more than you will at the end of the month.
If all that sounds like a lot to remember, keep it simple and close as many contracts on Thursday as you can! You won't believe how many headaches it saves you!!