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I'm in the process of attaining a loan that requires a 60 day escrow. Based on this information, my current buyer's agent told me that I'm out of the running on most homes unless it's a short sale or that the seller wants a delayed escrow. He has stated that due to the current housing market right now, most sellers are looking for 30 day escrows or less.
I recently came across a property that my family and I truly loved and wanted. When I contacted my agent, he called me back and said that the sellers wanted a fast escrow and he mentioned my offer would most likely get declined if we asked for a 60 day escrow. I understand that some people state that you should never list your maximum price to your buyer's agent, but I expressed to him that I wanted this property, even if it means going beyond the sales price.
With that being said, the property went into pending and I didn't end up getting it.
My question to you guys is this...
With a 60 day escrow, am I able to offer an incentive of an extra $30,000 for example on a property I truly desire? Is this negotiation tactic even common? Is it legal?
Is it true that this market is so competitive, the days of escrow are a deciding factor over price?
I'm starting to think I have a lazy agent, so I wanted to reach out and get some opinions please!
Why does your mortgage require a 60 day escrow? That's a long time. At first I thought you were doing a USDA or some other program for help, but if you have $30k, you're not doing a special program. $30k over sounds ridiculous as it doesn't cost a seller $30k to hold a property an additional 30 days over another offer.
I think you need to talk with a different lender and see what his closing time is.
All markets have a very localized nature so it is difficult for anyone outside your area to know what to tell you. Around here, there are many cash buyers and homes are selling at a brisk pace so I can believe it is possible. On the other hand, if you are getting a loan, you can only go at the lender's pace. Some lenders are faster than others, though, so you might shop around and see if you can find a lender who will help. I wouldn't suggest paying more for the house and your lender probably wouldn't go for it anyway although you can always ask if there is a way to structure that without blowing the appraisal process or being fraudulant. I can't comment on your agent but I can tell you that an agent has an obligation to present all offers so, if your agent writes one up, the listing agent has to present it. Not all agents think the same way or work the same way and, just because your agent thinks that it must be a 30 day deal, not all will agree or even think that way. Sooner or later, you will find someone who will think 60 days is a quick close. In fact, you might come across someone who would love to have more time to get packed, find another place, and move. Typically, the homes that are vacant want a faster turn and the ones that haven't begun to pack appreciate more time.
I'm in the process of attaining a loan that requires a 60 day escrow. Based on this information, my current buyer's agent told me that I'm out of the running on most homes unless it's a short sale or that the seller wants a delayed escrow. He has stated that due to the current housing market right now, most sellers are looking for 30 day escrows or less.
I recently came across a property that my family and I truly loved and wanted. When I contacted my agent, he called me back and said that the sellers wanted a fast escrow and he mentioned my offer would most likely get declined if we asked for a 60 day escrow. I understand that some people state that you should never list your maximum price to your buyer's agent, but I expressed to him that I wanted this property, even if it means going beyond the sales price.
With that being said, the property went into pending and I didn't end up getting it.
My question to you guys is this...
With a 60 day escrow, am I able to offer an incentive of an extra $30,000 for example on a property I truly desire? Is this negotiation tactic even common? Is it legal?
Is it true that this market is so competitive, the days of escrow are a deciding factor over price?
I'm starting to think I have a lazy agent, so I wanted to reach out and get some opinions please!
Thanks!
The short answer is yes, you can offer $30k to the seller for a 60 day close. And in some markets, like here in the Phoenix, it is highly competitive, where in the lower price ranges, a cash may be accepted over a higher offer requiring a mortgage.
Your agent MUST submit any offer that you wish. He can advise you on what may and may not work, and should offer you optional negotiation strategies because everything in the contract is negotiable. But even if he thinks your offer won't be accepted, he must submit it in a timely manner. (The agent has a duty to follow all of your legal instructions) It requires a dialogue between buyer and agent so the agent knows what you are willing to do, and then you and he can determine the best negotiation strategy.
A 60 day escrow is not acceptable in most markets unless it is a very strong buyers market; unless you run into a buyer who wants a long escrow.
My suggestion is to talk to a couple of other lenders. Even ask several lenders if they will pre-approve you (not just pre-qualify). Pre qualify essentially means that with your income you can qualify for a certain mortgage amount. Pre-approval means they have gathered all the paperwork from you and made all their investigations and you are now "approved" for the loan. All you need is an accepted contract, and if the house appraises for the amount, then the deal is done. A pre-approval is almost as good as cash and can usually close in 15 days. Not all lenders can do the pre-approval. You have to check with them. But you really need to have a lender who can close in 30 days.
Anything is negotiable in the contract, including number of due diligence days, earnest money amount, limit on repairs, closing date etc.
It is not unusual to negotiate the closing date with money such as you're suggesting. However, $30k is a lot of money to offer for a 60 day close unless you're dealing with a million dollar + house, or getting real bargain anyway. Getting a pre-approval can save you that money because you are as good as a cash buyer then.
60 days aren't uncommon here, we don't like more than 45 days but it's local. Ask your lender and your agent why. And you don't know, some sellers like more time, just make an offer.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by illicitx
I forgot to mention that this property was an investor flip if it makes any difference?
House hunting is stressful
I don't think a flip seller would ever go for a long escrow. They often have a very short-term high interest
loan from a private party, and may have to pay subcontractors and suppliers within 30 days. In the case of a private seller, the additional $30,000 may not be worth it to them if they don't have the money for an additional house payment, or stand to lose their new purchase if the contingency takes too long.
I forgot to mention that this property was an investor flip if it makes any difference?
House hunting is stressful
That makes a huge difference. There are rules on the amount of days someone is allowed to flip a house. I just had a deal close 3 months late because the idiot mortgage people were squabbling over the investor's close date verse the recorded date. The close date was at 89 days and the recorded date was at 92 days. We were pressing that the recorded date should be used, but the lender wouldn't acknowledge it, only the closing date, so the rules change. You have to get additional appraisals, show proof of condition, ie the inspection report... we had to jump through so many hoops because of the 90 day rule. My poor buyers were going insane.
There are some exceptions to the flip rule, but it sounds like you might be going FHA...
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