"How quickly do we need to close the transaction and provide the funds?"
This is another question my buyer has, and another great one. The second part of the answer is straightforward; the other not so.
Let's start with the easy part, the question about when funds must be paid. In most of our transactions here in San Mateo County and the Silicon Valley areas of California, a buyer writes a check for 3% of the purchase price at the time an offer is made, made payable to the escrow company. I present a copy of the check along with the offer, to show the seriousness of the buyer. That check is either held by the buyer or by our office until the offer has been accepted and we're in contract. At the point we typically have 3 days to get the check to the escrow company, where the check is cashed. The balance of the buyers' down payment needs to be in escrow 1 or 2 days prior to recordation, at which time the buyer owns the house. (It has been my experience that lenders now often want verification that the buyers' funds are in escrow before they send the loan proceeds, thus the need for 2 days in advance.)
The trickier part of the question, "how quickly do we need to close the transaction" varies depending upon the situation:
- house vacant - usually a short close of escrow helps strengthen an offer. In our area that could be 15 days if it's an all-cash offer; 30-45 if a loan is involved (I always talk with the lender to verify they can meet my terms--I structure my buyer's offer to succeed, and don't promise something we can't deliver!)
- owner in home, perhaps in contract to purchase another home - I learn what timing would be ideal for the seller, and see how closely we can meet that. The seller appreciates that, believe me.
- owner in home but hasn't yet purchased a replacement - a longer close of escrow might be advantageous here, perhaps 45-60 days, plus allow the seller to remain in the home for an additional month, at the buyer's cost of loan principal, interest, property taxes and home insurance. Variations of this strategy are many, but the idea is to hit upon something helpful and possible for both buyer and seller.
- the property being purchased is part of a 1031 delayed tax exchange - in this case, knowing whether the seller has identified the replacement properties and how far along they are in the procedure is essential--there are very stringent time requirements that must be followed to the letter when working with exchanges -- a flexible buyer, able to delay close of escrow or speed it up as necessary, is a treasure and one with whom the seller will wish to work.
Part of my job as your agent, and to bring about a successful transaction, is to learn what would help the seller the most, and make you offer the most appealing, at a price and terms that work for you. Many time, favorable terms will overcome a less-than-hoped-for selling price and bring a transaction together, with goodwill on all parts.
And in the long run, that goodwill is a huge benefit and smooths out many a bump in the road to home ownership.