I want to share some tips with our real estate members. I will periodically share some of the strategies that I have used to launch my own real estate career. This week, I want to share some tips on speeding up your closings. We all know that Time Kills Deals, and since we don't get paid until closing, we need our deals to close fast. If your average closing time is greater than 15 days, here are some useful tips:
1. The key to getting to closing fast is to make every person involved in the transaction speed up their processes. Because so many deals fall apart, nobody wants to risk losing money completing their part of the process. You can do this by guaranteeing payment for services should a deal fall apart. For example, agree to pay the termite inspector for any deals that don't close. Perhaps they will eat the cost of one or two inspections per month, but after that, you agree to pay for their services.
2. The same goes for the appraiser, title company, and home inspector.
3. Keep your buyer excited and ready to move. The buyer must be able to participate in the transaction. This may mean taking time off work not only to view homes, but for inspections and walk-throughs.
4. Ensure that your buyer is committed to the transaction. You do this by requiring as much earnest money as possible, getting your buyer to complete loan application early in the process, and asking them to provide the lender with payment for the appraisal upfront.
5. Here is an example of how your sale should process:
Day 1: Contract is ratified, order appraisal, order termite inspection, order title work, and schedule the home inspection. Provide all parties with copies of the ratified contract.
Day 2: Home inspection is conducted. Repair Addendum is negotiated.
Day 3. Follow up on termite inspection, title work, appraisal, and loan.
Day 5: Receive the termite inspection, appraisal, title work, and provide everything to the lender. Ensure that the lender has all paperwork that they need for underwriting.
As you can see, you should have everything completed within five days. If your vendors don't want to work this fast, I suggest you work with other vendors. As real estate professionals, we control the pace of the transaction.
I hope that this helps you to close more deals and decrease your average closing time. Please feel free to share this with your colleagues.