With sales activity moving along at a steady pace, buyers will want to pay careful attention to establishing reasonable time frames when writing an offer this year. The Incline Village Board of Realtors purchase agreement provides for a number of contingencies during the escrow period. It behooves buyers and their agents to group contingency deadlines together so that the escrow process is easier to manage and you don't have a deadline coming due every couple of days.
Most lenders are currently taking between 30 days and 40 days to get a loan approved. While it’s possible to get a loan approved and documents drawn up more quickly, it’s better to have a realistic time frame and avoid the need for requesting an extension on the deadline. Setting the appraisal contingency removal somewhere between 21 and 30 days should provide enough time to get this important element of the purchase process completed.
As a general rule of thumb, buyers who are paying all cash can shorten the contingency removal periods because you will not have to deal with a lender and all of their time-consuming requirements. It’s possible to close escrow in as little as 5 to 10 days if everyone has their ducks lined up on an all cash transaction. For purchases involving a loan, it is better to establish a 35 to 45 day escrow period so that you are not continually asking for extensions from the seller.
Home inspections are a critical part of the due diligence that each buyer performs when purchasing a property. Allow enough time to get the inspections performed, reports written, estimates completed and then a few days to contemplate and analyze the results. Generally speaking all of this can be performed in 14 to 21 days depending on the size and condition of the property, weather and snow conditions and the availability of personnel needed to do the inspection work and estimates.
Some items for which the title and escrow company will be taking primary responsibility include providing a preliminary title report, escrow instructions, and Homeowners Association documents such as CC&Rs, financial statements, Board of Directors minutes, etc. While the title companies do their best to provide all of these documents as expeditiously as possible, condo buyers are very often at the mercy of the HOA or their management firm to get the needed materials. Rushing this process usually ends up with the need to write an extension. We recommend that you allow at least 10 days to acquire, review and approve (or disapprove), escrow documents and extend this timeframe to 15 to 21 days if you are requesting documents from a Homeowners Association.
Buyers can write offers in a way that group contingency removals so that deadlines fall on days 10, 15, and 21 (with loan approval possibly being longer). This way you only have to worry about contingency removals on a few specific dates and have plenty of time to plan for writing an extension on any topic where you do not have all the information necessary to make a decision.
It's imperative that buyers, sellers and their agents stay in constant communication throughout the escrow process to keep things running smoothly and to avoid missed deadlines. Every escrow will have some type of issue or problem that needs to be dealt with. So, having a well-established timeline where the contingency removals are handled in an organized and coherent manner will keep everyone on the same page and the transaction flowing smoothly.
Weekly Real Estate Update
Statistics gathered from the Incline Village MLS on 3/25/17
Houses Condos Free-Standing
For Sale 87 38 21
Under $1 million 15 28 8
Median Price For Sale $2,100,000 $564,000 $1,150,000
YTD Sales 2017 23 36 6
YTD Sales 2016 28 30 6
New Listings 10
In Escrow 7
Closed Escrow 1
Range in Escrow $499,000 - $1,650,000
These statistics are based on information from the Incline Village Board of REALTORS® or its Multiple Listing Service as of March 25, 2017