Home Buying in Tahoe City>Question Details

Tom C, Other/Just Looking in 92506

What are the advantages of having a longer escrow period versus having a short escrow time period, for the buyer. No one has ever explained this to

Asked by Tom C, 92506 Sun Sep 13, 2009

me nor have I read about it. thank you.

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Sasha Spiegel - Click Here!’s answer
Hi Tom,
I agree with Trinkie. There really is not advantage to having a longer escrow. I typically only have a 30 day escrow. If it is an all cash deal you can probably get it done in 15-20 days. My professionals can get a home and pest inspection withing 7 days. Any other inspections the buyer's want can usually be done within 10 days. If you need to extend your contingency time you can do it at that point. In my opinion escrows should never been longer than 30 days.
0 votes Thank Flag Link Tue May 8, 2012
Tom, For the buyer having a short escrow period will entice a seller to accept your offer as they know that if the deal falls apart for any reason that their property will be tied up for a shorter period of time. As a buyer a short escrow period means that you will have less time to complete inspections, get loan approval, and remove all contingencies.

A short escrow period moves fast so it is important to have your agent draft a time line for the escrow period so that you know when inspections will take place, when contingencies will be removed, and when the escrow will close. "Failure to plan is planning to fail" This way you and your agent will be able to stay on top of the escrow process and be successful in the end.

A longer escrow period will allow you to think and process situations as they arise. You may have a home or pest inspection that shows some minor but expensive structural damage. With a longer escrow period you will be able to contact various contractors and get estimates on actual costs to cure issues. This will also give you more time to negotiate with the seller or consider walking away from the deal if it no longer makes sense financially.

I would love to discuss this matter further with you if you have any questions, so feel free to contact me.

Best regards, Dave
0 votes Thank Flag Link Sat Sep 19, 2009
Buyers can buy houses cheaper with shorter escrows. - sometimes.

Most sellers want escrow to close sooner than later., the advantage to the buyer therefore, is that an offer with a shorter escrow will be more attractive to the seller to accept than a nearly identical offer with a longer escrow.

A short escrow offer may be so attractive to a seller that it wins out over a higher offer.

For example: I am selling a house I own in Sacramento. If I have an offer below list price, but the buyer can close in 30 days or less I would probably take the offer. If a buyer were to ask for 90 days or more, I would probably counteroffer at full list price, or leave the house on the market, hoping to close sooner with someone else.

DRE# 00881401 MLS #90069523
0 votes Thank Flag Link Sun Sep 13, 2009
Tom,

Short escrow vs. long escrow will depend on each indivitual situation. When you do need to move our of your property? What type of loan program are you using? Etc..

In this current real estate environment, a little longer escrow is always the safer way to go. You see, several new regulations have taken place this year that are delaying the escrow process, such as the new Home Valuation Code of Conduct (HVCC) and the new regulation on Truth And Lending disclosures.

So my advice when making an offer and negotiating escrow periods is to make sure you are aware of all aspects of the home purchase in order to make the right decision.

And remember...Beter save than sorry. Take your time and make sure it goes smooth than trying to rush things...It's just not a good idea.

If you'd like to discuss it further, feel free to contact me at Maria@MariaMarriott.com


To Your Success ~ Maria
0 votes Thank Flag Link Sun Sep 13, 2009
Not sure there is any point to a longer escrow period once inspections have been completed and loan is ready to fund. If no loan, then escrow can close once buyer is satisfied, assuming seller in position to release property. Once everyone has agreed on the contract, why wait?
0 votes Thank Flag Link Sun Sep 13, 2009
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