Within the purchase agreement, when buying a property, buyers often ask for a 30 day escrow. Because it is written in the purchase agreement, the escrow company takes this as an instruction. It can be adjusted, though. Keep in mind, if you’re getting a loan to buy the property, you’ll likely need the time. These are the main reasons you need 30 days:
- Regulations require you to be notified of certain disclosures at specific time intervals when buying a property.
- The lender will require an appraisal and possibly a home inspection.
- The lender’s underwriter-who approves the loan in the end-will comb through the information to verify your credit, income, and the home’s value are all intact before they’ll approve the loan. They have many loans and don’t always give the right person priority.
So how can you make escrow process faster?
- Buy with just cash, if possible. If there’s no loan, you don’t have to wait for an underwriter and you won’t have to get an appraisal or home inspection. Also, unless I’m mistaken, you have no regulation requiring disclosures when you buy with cash because the disclosures have everything to do with taking on a loan and informing you as the buyer that you have to pay the loan or the house will be foreclosed…imagine that!
- If you do need a loan, make the call for an inspection and appraisal the moment your offer is accepted. If the lender must make the call, put forth the effort to get the lender to make the call as soon as possible. The same goes for the inspection. The essence is, do not let escrow “happen.” Use intent to push it along.
- Get a hold of your lender and ask for all information they’ll need from you ahead of time so that you can send it as soon as possible. Get a checklist, if necessary.
- Keep on your real estate agent or Realtor to make sure they’re constantly working on your behalf to speed up the process.
- Remove contingencies as soon as possible. The sooner you remove contingencies, the more aware the seller is that you want to move quickly. Let it be known.
It can be nerve wracking trying to go through escrow. Many times, it feels like a “Hurry up and wait” proposition. If you did your homework previous to putting in the offer, you probably won’t have much to worry about. Once you’ve identified a property you want to buy, it can be difficult to wait the time it takes to get it, especially if you’re doing a fix and flip. Use the time wisely and keep looking for other properties on the market or in the area. Always be studying. Get your people ready to fix the place or prepare it for rent/resale depending on your end game. You’ll be more efficient and efficiency means more money in your pocket.
