Better to Close On A Home Sale At The End of The Month?

[BobbyD]

Wanted to see if anyone knew if there are any advantages to closing on a home sale at the end of a month or the beginning of the month?

We bough a new home from a builder and they want us to close at the end of October, is there any advantage for me to push them into the beginning of November?

Thanks for any and all advise on this.

BD

[nostradamus]

With housing prices in a free fall and only financially suicidal people buying now, the longer you wait the better. Of course they want you to close sooner.

[NotCranky]

So, the way I understand it, you are already in escrow. Close before they get someone to break your fingers. Other than that, you are at no disadvantage either way. Obviously there is some benefit to the builder, or the lender is pushing the builder to push you, if it is a preferred lender situation.
These are wild guesses except for the part about your fingers.
Best wishes

[betting on fall]

I suspect they want to make some monthly quota- or get you closed before they lower prices/add incentives. See if they will negotiate some sweetener if you do it by the end of the month.

In fact, the advice you are going to get here is probably to walk away, either using some loophole to get your deposit or screw the deposit. Even if your not ready to do that I suspect you have substantial leverage to improve your deal. Look closely into prices/incentives they are offering now vs. when you signed up.

If you are willing to say what project this is, I am sure you will get some much more valuable comments from the board.

[BobbyD]

Thanks for everyone’s feedback. It was sitting inventory that they have not been able to sell, the home has over $150K in upgrades and we gave them a low ball offer that we did not expect them to accept. However they did and we got a hell of a deal. I have looked up all of the sales in the development. The original asking prices and sale prices for these homes were several hundred thousand dollars higher, so we know that we got a steal.

We very much like the home and the neighborhood. We sold our previous home at the peak in 2005 by ourselves with no realtor. We have waited for 2 years to buy again and plan to stay in the home for the next 7-10 years, so for us it is a home and long term asset, not a short term investment. We are putting down a big downpayment. I know that I am not catching it at the very bottom, but I know that we got a great deal and found the home that we were seeking. So we are content.

I wish everyone else the best in their RE journey. I am however going to continue to follow this, and all of the other blogs, that I have learned so much from to keep track of the market. I am hoping to scoop up some bargain investment rental properties at the bottom.

BD

[Raybyrnes]

The benefit of closing later in the month might be that billing is done on a full cander month basis so from a payment standpoint closing on the last day of the month might mean the fist payment is for 32 days owed as opposed to if you closed early in the month where you recieve your first statement for 60 days. So from a casflow standpoint this can be closing later can reduce the 1st months payment shock.

The downside to closing later in the month is that everyone is pushing to close, so from a lenders standpoint time and resources are scarce and I would venture to say that there is more errors made when people are trying to push things through. For this reason doing things in the middle of a month gives you access to more resources and also provides a litttle bit more leaway if there is incomplete documents or a signerature is missed along the way. Less stress for all. If you are aware of the 1st payment being a little higher to account for the middle of the month and have budgeted accordingly it is a meaningless detail

[BobbyD]

Ray, thank you very much for that feedback, that makes sense.

[robyns_song]

BobbyD,
Would you mind sharing some details on your purchase, out of curiousity? You can email me at [email protected].

[flyer]

BobbyD:

We are in about the same position as you described–sold very high in San Diego in 2005, and have retreated to our AZ home with cash in hand–ready to buy in San Diego again.

If you wouldn’t mind sharing some of the specifics
(builder/general location) of your RE “find,” I’d really appreciate it. You can email me at [email protected].

Thanks!

[1HOPE4U]

What would be legitimate loopholes to back out on an agreement?

[temeculaguy]

Bobby D, Good for you. You have a great attittude and while there might be better deals to be found next year that doesn’t take anything away from your play. Sell in 2005, buy standing inventory two years later with a large down payment at a huge discount, I give you a B+ and an A for sportsmanship. Assuming you aren’t leveraged too heavily and have a fixed and comfortable payment, playing the bottom for a rental property is a good plan, when it’s all said and done and you look at your balance sheet, your two years as a renter may end up netting you the rental for free. Even if you jumped back in too early, your exit was timed perfectly, had you jumped out in 2003 then waited until 2009 to get back in the margin would have been the same so timing the top correctly gives you leeway in timing the bottom incorrectly, it’s all about margin, baby.

[BobbyD]

Temeculaguy, thx. Appreciate the kind words. Not leveraged at all, our only debt will be our mortgage with a manageable payment that is not stretching us. We did not buy beyond our means. I grew up in the midwest in a conservative household with parents we were big on saving. So I am very disiplined in my financial affairs.

I also learned a lot during the stock market bubble and did not want to get burned again this time. History always reapeats itself . . .

[Author]

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