When closing dates approach, all parties involved are likely to feel some pressure. Sellers are eager to have their process said and done and buyers are anxiously awaiting the final news that their deal has been approved. Add to that the stress of a busy holiday season and you’re probably feeling like you’re skating on thin ice.
The holiday season brings about added potential for dropped funding for various reasons. Here are 5 ways the holidays can affect the closing date of your deal:
Delayed Appraisal/ Inspections
In most businesses, the holiday season involves multiple days of closed offices and days off of work. Including those who complete appraisals and inspections. Eliminating a business day that would normally be scheduled full of appointments makes it more challenging to get these tasks done around these days of closed operations. If you’re waiting on appraisals and inspections, be sure to schedule them as soon as possible to avoid holiday impact.
Most lenders and title companies recognize federal holidays. On top of that, real estate agents and insurance companies are likely to as well. It’s important to be aware of these holidays and complete work with these partners prior to their holiday closures.
Actual Closing Date
Office closures during the holidays make everything more difficult. There are likely the same number of closures scheduled as other months, but fewer days to complete them. Ideally, you want to be as prepared as possible to lower the likelihood of any delays.
Distribution of Funds
Holiday closures and processes have the potential to affect the distribution of funds between the buyer and seller, not to mention the involvement of additional financial partners. You may be able to discuss these impacts with your settlement agent and plan accordingly to avoid delays.
Recording of Mortgage
Federal holiday closures also play a role in the record-keeping of your mortgage. If your deal closes right before the holidays, it may not be immediately recorded by the county offices. You may want to inquire with your mortgage professional about how the season might affect your right to rescission.
On top of all of these reasons, the last thing you need is for your client’s funding to fall through. In order to lessen the chances of that happening partner with a reliable funding source that’s less likely to fall through – not the banks.
As hard as it may be to consider, loans do occasionally fall apart. It may not always be due to factors within your control. There are a variety of reasons why lending could fall through including lenders going out of business, changes in the lending guidelines, the property doesn’t appraise at purchase price, or there’s a change in the buyer’s credit score or income during escrow.
The most important thing to remember in any of these situations is not to panic. There’s a short period of time in which you have the opportunity to reposition and readjust yourself to close the deal. The first step is to talk to your mortgage professional to determine why your funding crumbled. Once you’ve identified what went wrong, it’s time to find a solution.
Innovative Capital specializes in helping our clients navigate the process of acquiring capital for their business. We utilize a network of banks and in-house private capital to provide our clients with multiple solutions and avoid the disappointment and frustration of dropped funding. If you’re looking for an innovative solution for your real estate funding, contact us to… Get A Free Quote