By Doug Goelz, Mortgage Services
Buyers need every advantage in order to have their offer accepted: good price; certain financing or cash; a “clean offer” (the fewer contingencies the better); and a short escrow. Escrow periods are always expressed in calendar days, so weekends and holidays are generally days when little can happen although they are part of the escrow days. Cash offers can generally close easily in 10 days, while an offer with financing typically needs a minimum of 21 days.
A 21 day escrow is tight, but doable, with the right lender and escrow company. You will need to use a lender that can close in 21 days (this might not be your lowest rate lender). Also, you must have a responsive escrow team that provides needed documentation, including fees to the lender, within hours of the request (not necessarily at the end of the day).
You also will have to do your part to make a 21 day escrow happen. If your offer includes a 21 day escrow, be prepared for the following:
- To pay a rush fee ($100-$150 additional) on the appraisal
- To provide all requested documents the same business day requested. You should have online access to your asset (bank, brokerage, retirement) account information (both monthly statements and reports of activity between statements). You should have a scanner you can use to send reasonably-sized multi-page documents. Don’t send 10 page documents in 10 separate files that are 1MB each!
- At work, at home, or on vacation, to be accessible by phone, email or text during the day, every business day. You may be asked to send documents electronically from wherever you are at any time during escrow.
- To select your homeowner’s insurance provider within the first week of escrow
- To review and sign all disclosures and documents the same day you receive them
- To nudge your employer HR department to respond quickly to requests for verification of employment
In addition, make sure you have roughly 3% of your offer price liquid so you can wire funds or write a check for your escrow deposit within the first 3 days of escrow.
A few thing NOT to do:
- DON’T schedule movers for the 22nd day.
- Once you provide asset statements, DON’T move your funds between accounts until near the close of escrow.
A 21 day escrow may differentiate your offer from others and gets yours accepted. If it does, be sure you can do your part to get your deal closed on time
Feel free to get in touch with me at 415-730-4665 or [email protected] to discuss any aspect of mortgage financing.
