Agents have called my office in the last four weeks seeking assistance in meeting settlement dates, looking for advice on how to get a lender to move quicker and bemoaning the slow-down of transactions across the board in the last few weeks.
Well, folks, get used to it. The whole transaction is slower these days because of the mortgage business purification. (I call it a purification because the mortgage industry is still healthy, carrying out a robust business day in and day out with buyers buying and sellers selling. The sky has not fallen, banks still have money to lend, the stock market is up, as are profits, and real estate is STILL a great investment. Do you know why? Because, God's not making any more of it and importing it from China doesn't make it any less expensive.)
Now that I have that off my chest, let me get one more thing straight -- patience is a virtue and the mortgage purification is the Almighty's way of making a bunch of triple A personality types in the finance and real estate industry simmer down and take a breath and growing a little more patience.
If agents, buyers and seller want their real estate deal to settle on time, start on the day the contract is written. Pick a settlement date outside of four weeks. Frankly, I wouldn't write a contract today without at least six to eight weeks lead time. Many contracts stipulate that settlement will occur on X date or sooner. If you can get everything written up, approved, inspected, sold, financed, and whatever else you've asked for in the contract, completed within six weeks and you've asked for eight weeks, then fine. Now you can just see if everyone wants to settle earlier.
One of the only downsides to settling earlier is that it might cost a few hundred dollars more on closing costs because of interest and tax payments. On the other tightly clinch-fisted hand, if you're going to MISS your settlement date and move it back to a later date -- everyone gets in a huff, the seller wants more compensation from everyone (or even the buyer) and doctors start writing more prescriptions for ulcer medication.
Take your time on settlement if you can. It's not like you're ordering a pizza and it might get cold if it's not woofed down fast enough.
Another way to protect yourself from a mental wedgie is to hold off on ordering all your home services until you get moved in. Most contracts I see require the seller to keep utilities on and running until the buyer gets there. So sellers, don't cancel the service on the projected settlement date (in this market), please. What is the flippin' cost to you if it takes another couple of days to get it transferred over to the buyer. And buyers, be ready to write a little check over to the seller and don't get bent out of shape about it.
You're not selling a coffee-stained couch at a yard sale, it's a house. A $250,000-plus transaction in most places. So make it happen and don't get upset. In essence, prepare for a little more expense at the end of the transaction. If the movers have to hold your stuff for a few days, it's going to cost a few hundred bucks more. If settlement is delayed, some buyers and sellers may have to stay in a hotel. These are the costs of a market in transition. The tough part, I'm seeing, is when agents don't want to deliver the bad news of a delayed settlement.
Well, here's the truth: bad news doesn't get better with time. Agents, take this bull by the horns and let your buyers/sellers know, "We may have to delay settlement, so you may want to find out what another day in (storage, at the hotel) is going to cost."
It's not a question of "if" these delays might happen, but rather, on which cases "will" it happen. Be patient.