Today we are shedding some light on the top three reasons why the closing date is a really important factor in an offer and a key component of the negation process.
1. If a seller sells a home before their mortgage is up, and they are not permitted to move that mortgage to another property they will incur some sort of breaking the mortgage fee. Rule of thumb is that this amount is roughly 3 mortgage payments.
2. Even if the seller is able to port their mortgage to a home they bought, which will likely close before this deal is done, they will technically own two homes for the period of time. We do this for a number a reasons. It’s not a good idea to close on the same date as there may be complications with wire transfers and delays to the next day. If this happens, the client may not have a home to go to if the sale of their priority went through but their buy sale had complications. A bridge loan is used if you have a firm agreement purchase of sale for both the buy and sell of the properties, the bank offers you a bridge loan in which they will use the equity in your existing home and allow you to carry the properties for the short period of time. There fore if the closing date is too far off, a bank may refuse the bridge finance or it may cost the seller too much on the land to make the deal feasible
3. If the seller has not secured a property to move to, a fast closing does not serve them well. They may have to find short term accommodations, which again may be costly. Knowing what the seller is looking for when it comes to closing may save you money and a lot of headaches in the long run!