3 Things to Know About Negotiating a Closing/Move-In TimeLine

3 Things to Know About Negotiating a Closing/Move-in Timeline

Thu, February 18, 2016

In real estate, timing is a critical ingredient that can shape the sale. Relocation logistics, the timeliness of a lender to process a loan and even the availability of local contractors to fix things required by an inspection can drive, or delay, the closing date. Here are a few things to consider as you and your agent work to set closing and move-in dates.

1. Speed can tip the scales
Do you have your loan in hand and the flexibility to move out of your current home? Depending on the seller’s situation, this could be a tasty carrot in the negotiation process. Your agent may be able to feel out the seller’s urgency (or lack thereof) to sell and determine if they might accept a lower offer for a faster settlement.

2. Going long
Asking for a delayed settlement date, longer than 30 or 45 days, is another option, but generally less appealing to sellers. Each day is another opportunity for something to go wrong that could kill the deal. The buyer’s financial situation could change, or they might find a home they like better.

As a seller, if you are considering accepting a long closing date, an agent may suggest increasing the amount of earnest money stipulated in the contract. Also, you’ll want to consider adding the additional months’ mortgage you’ll be paying to the asking price.

3. Considering “rent backs”
Closing quickly and then renting the home back to the seller can make the schedule work for buyers or sellers who might not be able to pack up and move immediately. With this option, the buyer faces the greater risk. What if there’s a fire, a flood or a pack of crazy teenagers that run amuck during the rental period? If you consider the rent-back route as a buyer, work with your agent to develop a solid rental contract that spells out liability.

With years of negotiating experience and an in-depth knowledge of the current local market, a savvy Realtor can build a sales timeline that works to your benefit, both financially and logistically.

RE/MAX United REALTORS Talk Real Estate

A steadily improving housing market has RE/MAX United REALTORS optimistic for another good year in local real estate.  Low interest rates for mortgages combined with more reasonable credit standards contributed to a strong market in 2014 and local REALTORS see more of the same for 2015.

North Kent County’s most productive real estate brokerage posted a 23% gain in closed sales at just shy of $75,000,000 and is projecting sales to rise to $100,000,000 in 2015.  Homes priced under $200,000 continue a multi-year run of high demand while higher price ranges are generating more and more interest.  Strong demand for new construction homes is also driving sales to higher levels in 2015.

RE/MAX United owner Tom Rich sees several factors influencing the real estate market in early 2015.  “A mild winter as compared to last year, lower gas prices, and continued low mortgage rates have helped sales stay steady through a traditionally slow November to January period.  In 2014 the devastating cold and snow put a deep freeze on the market and pushed many property listings months later in the year” said Rich.  “The impact of lower gas prices could have a big impact on rural housing demand in 2015.  Driving an extra 5, 10, or 20 miles to communities like Cedar Springs, Kent City, Greenville, and township areas further out from employment centers is more desirable at $2.00 a gallon than at $4.00 a gallon.  Having a few extra dollars at the end of the week helps consumers feel more confident and optimistic.”

Housing developments that had additional phases to build out but remained stagnant through the recession began adding new homes in 2014 and will continue to add more homes in 2015/16.  Local production builders like KBH Homes, Sable Homes, and Allen Edwin Homes are doing everything they can to keep up with demand.  Custom homes builders like Nugent Builders are seeing strong demand across all price ranges including the high end home market.  The new inventory is critical to filling demand according to Rich.  “From 2007 to 2012 builders faced incredible challenges and did not build enough homes to meet future housing demands – population growth happens no matter how the economy is performing and there is simply not enough housing choices right now.  The next generation of potential home buyers is here and they are having difficulty finding acceptable housing.  By adding new homes choices to the market, those home owners that haven’t found a satisfying option from their current home.  If we can offer existing home owners new choices than we can free up homes for first time home buyers, and those in their first home that are ready to move up.”

RE/MAX United projects existing home prices to rise about 5% in 2015.  Rich says that price increase comes with a friendly reminder:  “If you are waiting for your existing home to rise another 5% before you sell, just remember, your next home is likely rising by the same amount.”