Just how long will it take to be moved into that new home? Plenty of first time buyers and those who haven't been in the market for a long time aren't exactly sure what to expect.
Closing timelines vary based on the needs of the buyer and seller in a specific transaction; we've seen everything from a week for a cash purchase with extremely fast title work to 8 months. Generally though in Massachusetts we see closings between 30-90 days.
For financed properties, most lenders will need at least a month to get through the necessary steps to underwrite a loan.
Between the time an offer is made and closing day there are several key stages, some of which are simplified in the event of a cash or otherwise non-contingent purchase.
The following is an example of what we commonly (but certainly not always) see in the Greater Boston market based on a 45 day closing timeline of a typical financed purchase with inspection contingency:
Day 1: Offer acceptance and earnest money deposit
Day 7: Inspection deadline
Day 10: Purchase and sale agreement and deposit (not to be confused with down payment)
Day 12: Complete loan application deadline
Day 30: Mortgage commitment
Day 44: Final walk-through
Day 45: Closing day (sometimes the property isn't "on record" until the following day so best to plan moving trucks for Day 46)
Your Realtor's job is to make sure that everything - and everyone including inspectors, lenders, appraisers, attorneys, and cooperating agents - stays on track so expect that they'll be working behind the scenes throughout the process and to be in close contact as each deadline approaches.
To say the housing market in Greater Boston is competitive right now is a huge understatement. While this can spell opportunity for sellers, buyers are frustrated by limited options and multiple offer situations on the houses they love. Luckily there are a few strategies that can help those offers win the property.
Besides price - which is of course going to be the biggest factor - the most common reason for an offer to be rejected is that it includes contingencies where competing offers don't. In a multiple offer situation, sellers are going to choose not just the highest price, but the offer that has the best chance of a smooth closing with no surprises along the way.
If one buyer has a home sale contingency and the others don't, that offer will be less appealing since the sellers would face the uncertainty of waiting to see if the buyers' current home sells before they can complete the transaction. Financing and inspection contingencies are important in minimizing risk for buyers but can also make an offer less desirable in comparison with offers that are non-contingent.
What buyers can do is try to meet the sellers' preferences however they're able. A good buyers' agent will always find out which variables are most important to the sellers besides price and sometimes something as simple as adjusting the closing date by a few weeks in either direction to accommodate the sellers' needs can make a substantial difference.
Buyers should always sell their current house before shopping, or confirm with their lender that they can carry both properties temporarily to avoid a home sale contingency. Having a proof of funds letter or strong pre-approval in place before house hunting is essential. Increasing earnest money and/or deposit amounts is another way to give the sellers added confidence.
While waiving an inspection entirely carries added risk, buyers can include an inspection threshold where they would only attempt to negotiate issues with the sellers if repairs exceed a certain amount. This tells the sellers that buyers won't nitpick or use the inspection as an excuse to walk away unless there are major problems.
Buyers should be prepared to move very quickly on properties they're interested in and usually that means looking at quite a few homes prior to making an offer so they're going in with a solid frame of reference, increasing their confidence when they do move forward on something. It also helps to be prepared to write offers on a few properties before one is accepted.
We encourage buyers to shop a bit under budget to allow room both for improvements needed on a property that needs work and to make over-asking price offers that have a higher chance of acceptance.
In a market with tight inventory, having a good buyers' agent is key. We know how things are changing in the local market, have relationships with other agents and can often introduce off-market properties that offer our clients additional options that they may not otherwise have access to.
There may be some challenges in this market but buyers are closing on new homes with the right strategies and a little bit of patience.
As we are all increasingly concerned about staying healthy, reducing the spread of the virus and parents attempt to stay sane while continuing to work during weeks of school closures, there is question of how all of this will impact the real estate market in practical terms and overall home values.
We will continue to be available to our clients, other agents and to the public as a resource for how to best move forward during the next several weeks. We have been in close communication with attorneys, lenders and investment managers and are following guidance from national and local boards.
The group whose questions are most urgent are those whose moving trucks are scheduled during the next couple of weeks. Buyers and sellers whose transactions are pending should be in close communication with their agents, lenders and attorneys. Local registries are encouraging electronic recording and attorneys should be consulted for how to handle land court closings which are typically required to be completed in person. Most closing attorneys are able to accommodate parties signing closing documents separately, keeping all in-person contact to a minimum.
Offers and P&S Agreements
Our clients who are working on offers and purchase and sale agreements (yes, all of that work continues) are encouraged to include language to address unforeseen issues that may arise due to Covid-19 to ensure their deposits and interests are protected. Our agents have draft language available provided by a real estate attorney but each client is encouraged to work with their own team to determine what should be included for their transaction.
Buyers are continuing to search for homes, but often in different ways and we are glad to facilitate that in evolving ways. Most vacant homes are still available to view and we are happy to plan private showings for clients who prefer not to attend open houses (of course maintaining our distance and carrying plenty of hand sanitizer). We have long used virtual tours and video conferencing for our out of town clients and these tools are available to anyone who prefers to look at homes remotely.
We discourage sellers who still live in their homes from inviting the public through for open houses for the time being. Massachusetts has restricted gatherings of groups of more than 25 people and to ensure we comply with that number, private and virtual showings are safest for everyone. Some sellers, especially those who are living and now working at home will prefer to wait a few more weeks to list. We expect to see more pent up demand when people return to their usual routines so this could be a great time to do some organizing and cleaning to be prepared when the time is right. We are also offering mini-design consults for those who are home now and realizing their space isn't working quite the way they want or who want to redecorate while they have some time.
A pandemic is certainly not something that was on anyone's radar as being a factor in real estate values (see chart below from 4CRE). What we expect to see in the immediate short term is a decrease in activity, with things quickly returning to an active late spring market. While investment portfolios are experiencing a rollercoaster, impacting some buyers' down payments, mortgage interest rates are at record lows which mitigates investment losses by increasing purchasing power. For more great information on activity, focusing on two of the hardest hit states, see this article from Mortgate News Daily.
Above all, it's important to maintain perspective, and while this is new and somewhat uncharted territory, all predictions point to this being a relatively short term issue in the grand scheme of things and our daily lives will soon return to normal - with all of us being more adept at getting creative to find new ways to help one another both personally and professionally.
One of the biggest and most important decisions a real estate agent can make for their business is which brokerage to hang their license with, and there's no one size fits all company for everyone. Priorities for new agents will be different than those of agents with some experience but it's always good to reevaluate every few years to make sure that the brokerage is the right one.
Some of the most important questions to consider are:
When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. There’s rarely a perfect apples-to-apples comparison, so a pricing decision often relies on comparisons to several recent sales in the area. As Realtors, it's our job to arm our sellers with all of the data and considerations they need to agree on a pricing strategy. Here are five criteria to look for in a sales comparison.