Yesterday I received a question from a Canadian buyer who is looking for a property with an elongated escrow period. Closings in Arizona usually take place in 30 to 45 days. It’s possible to have shorter or longer escrow periods, but they’re the exception rather than the norm.
Why? Shorter becomes difficult because as a buyer you want to make sure you have the full benefit of the 10-day inspection period and the repair negotiation period that follows (up to another 10 days, depending on what takes place.)
Longer also is difficult because someone wanting to sell their house, well, wants to sell their house. There are some exceptions – I have one listing where the seller would welcome a 60-day escrow period – but for the most part, sellers want to sell.
This is especially true of banks … every day they own the home, every extra day in the escrow period, is another day of the bank bearing the cost of carrying the homes.
What about short sales, I was asked. Since it can take a month or longer to receive an answer from the bank, these could work for someone who needs to close later rather than sooner and who may not be particularly concerned if they don’t end up with an accepted contract on the home they’re seeking.
But here’s the catch … short sales also have a 30-day closing period in most cases. The difference is it’s 30 days from the day the bank approves the contract (give or take a day for paperwork to go up and back.)
So if you need to close in September and the bank doesn’t come back with a response until August, you’re golden. If you need to close in September and the bank comes back with an answer in June, however, you’ve got a problem.
You always have the option of canceling the contract during the inspection period if the time frame doesn’t work for you, but that defeats the entire purpose of writing the offer in the first place.
For all I’ve written about short sales, they can be a viable option in very, very specific circumstances. As a general rule, bank owned homes still present a far better opportunity but a short sale could work if you have time, patience and a lack of concern on your side.[tags]Phoenix real estate, short sales[/tags]