Short escrow? Get your ducks in a row BEFORE you make an offer.
November 2nd, 2007categories: Anatomy of a Chico CA Real Estate Transaction, Chico Buyers, Chico CA Real Estate News, Chico Sellers, My Opinion on Things
There is no disputing the fact that Chico, CA is currently in what is commonly known as a “Buyer’s Market.”
That is FABULOUS news for all the buyers out there who have patiently been waiting for this day. The inventory is high, the prices have dropped, and the interest rates are still phenomenal!
Now is the time to get a great deal! 
A “Buyer’s Market” is a wonderful thing. A Chico, CA home that might have cost $400,000 in 2005 may only set you back $350,000 today. On average, prices seem to have corrected between 10 and 15 percent for residential properties.
I have noticed a growing trend with buyers. In an effort to get the absolute lowest price on a property, they attempt to entice the sellers with a very short escrow period. For some sellers, a quick sale in this market is a dream come true! They need out from under that house payment, and will gladly accept less than asking price just to be DONE.
However, when representing a seller, I have had to caution against signing the first contract we see, simply because the buyer promises to make it the pain go away with a 10 day escrow. The offer to close in 10 days is an empty one if the buyer has not done his homework.
The following items must be taken into consideration to close an escrow quickly:
- Is the buyer preapproved?
- Is the lender local and knowledgeable about our issues and resources?
- Is the lender willing to commit to closing on time?
- What kind of loan product is the buyer applying for? A VA loan, for instance, is highly unlikely to close in less than 30 days.
- What inspections does the buyer request? Well potability tests may require 14 days or more to obtain results.
- Can we get the appraisal completed immediately?
- Will repairs be required by the lender to fund the loan? If so, is there a contractor available to bid, complete, and final the work within a days notice?
An escrow that closes quickly can be a wonderful solution for both the buyer and the seller, but it doesn’t happen without forethought, preparation, and a willingness for all parties to be focused on immediate results.
If you are a buyer, hoping to get the best deal of the year by offering to close quickly, get your ducks in a row BEFORE you make an offer. No seller in their right mind will accept your offer if you aren’t prepared to close the deal.
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Shopping for Chico foreclosure property? Give me a call- I’m currently working with several REO departments on bank-owned Chico property. Sandi Bauman 530-864-5407
Just a reminder that pre-qualification and pre-approval are two separate items. In the case of a short escrow, what you want is pre-approval!
An ACTUAL pre-approval will be a letter on a lender’s (not broker’s) letterhead outlining the loan amount, interest rate and terms of the note as well as any pre-doc closing conditions.
An approval without conditions is NOT an approval!
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RB
Ricardo- You are, of course, correct. Notice I said pre-approval, NOT prequalification! One of my previous posts addresses some of the differences between the two.
Thanks for contributing a very valuable reminder! People often mistake one for another.
Thanks Sandi for a great post on quick escrow bargains in Chico. You diagram everything a Buyer needs, and a seller to, to determine the real value behind an offer.
Terry McDonald|Charlotte NC
Sandi - PreApproval is essential for a quick close, along with your additional advice! Preparation is key!
When considering buying a home, research your mortgage insurance alternatives. Most people don’t realize that they have options other than the coverage offered by the lender. A term life insurance policy in an amount sufficient to cover the mortgage can be substantially cheaper. Term life also allows you, NOT the lender, to name the beneficiary.