From the time the buyer’s offer was received, your sellers have been anticipating that all-important date: Close of Escrow. It seems like their whole life revolves around that date, including moving to their new home, changing their children’s schools, and perhaps even starting work at a new job. Even though you advised them about the hazards of escrow and the possibility of closing delays, it seems like they set this date in stone.
You, though, are acutely aware of the perils of escrow closing dates and the frequency of closing delays. As hard as you work to keep the escrow on track, you know the statistics: rarely does an escrow close on the exact day planned, and many closings are delayed. You cringe thinking of the last escrow which closed a week late, in spite of your constant effort on the file, and how upset those sellers were.
Often in our business, transactions are intertwined because people must have residences in which to live. Perhaps your seller is simultaneously buying a home in a nearby state; and the seller of that house is buying another home also. This creates the inevitable “domino effect” whereas one closing delay with this first buyer can affect many other transactions, causing cancellations down the line. Closing delays are rarely an isolated incident and not always avoidable.
Don’t let your sellers be surprised if escrow doesn’t close on time as planned. Sure you’re going to stay abreast of your file and watch it like a hawk every day. But advise them to get “Plan B” and “Plan C” ready too. Setting their expectations correctly up front won’t remove the anger or disappointed of the closing delays, but it can prevent them from placing the blame on you due to this “unforeseen” delay.
The best planning tip you can give your sellers is to overlap moving dates by at least 2 weeks in case a closing delay occurs. What that means is to plan to move out of their home and have another residence ready at least 2 weeks before closing. That way, they can vacate their house early (moving ALWAYS takes longer than planned, doesn’t it?) and they will not hold up the escrow closing. The buyers, likewise, should plan to overlap their move by 2 weeks on either side of the closing date. If they are currently renting, they should NEVER give the first closing date as their move out date.
Closing delays are inevitable in real estate transactions and communication is key. Keep your sellers or buyers informed at every step of the way and have them plan ahead. All of these best-laid plans begin with good conversations. Sit down with your sellers shortly after they sign the listing agreement and review timelines with them. Ask “what if” questions to help them plan for several different likely scenarios in case of a closing delay. They will be relieved to have your expertise on their side. Show them that they are in good hands with you because of your skills and knowledge!