Does anybody know of any potential financial (or otherwise) drawbacks to closing early on a home purchase? We

Asked by Drew, Portland, OR Wed Oct 29, 2008

are looking to buy and everything seems to check out so would like to close in 20 days rather than the standard 30 days. Assuming the lender goes for it....

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Janeese Jack…, Agent, Portland, OR
Wed Oct 29, 2008
I think most elements of closing early have been addressed in the other answers. I would just ask what your situation might be? Are you coming from a rental and have you given 30 days notice? As long as all the contingencies of your offer have been met to your satisfaction, the lender has loan documents prepared and the seller agrees to an early close....the only financial drawback I can see (without knowing all the details of your particular escrow) is that you might end up paying both rent and your house payment if the move-out date/move-in date don't coincide. Of course, there are some positives to that scenario, such as having more time to pack, move and clean. good luck with your closing....
Janeese Jackson, Principal Broker
Real Estate Resource
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Kelly Gebler, Agent, Portland, OR
Wed Oct 29, 2008
Hi Drew - looks like everyone has covered the issues from the real estate side - from the lending side, however, there will be a some things to keep in mind. The Good Faith Estimate your lender gives you will tell you what the estimated closing costs are based on the specific date you plan on closing. If you close sooner than expected, you'll have additional pro-rated taxes, insurance, and interest due as part of your closing costs. That means you could potentially need more funds to close. If you have an agreement for the seller to pay a specific amount towards closing and your costs are now more than he's agreed to pay - you'll need to come up with the difference yourself. I know in many instances where I'm selling homes, buyers have put everything they have into getting into the home and don't have any extra to come up with at the last minute. Closing 10 days early shouldn't make a huge difference - but if you don't have any extra cash, even a small amount could make a big difference.

If you think there's a chance you might want to close early - I'd have your lender run your estimated closing costs on an early closing date and aim a little high - no surprised that way. Best of luck!

Kelly Gebler
Real Estate Broker & Residential/Commercial Loan Broker
Commonwealth Group & Sunset Mortgage Co.
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June Lizotte,…, , Portland, OR
Wed Oct 29, 2008
This question should be answered by your Realtor, however, there will still be enough days for all your due diligence, which I would strongly recommend you do thoroughly. In the State of Oregon it is the Buyer's responsibility to perform the due diligence. If you don't know for sure that the answers you've gotten from seller or seller's agent (or even your own agent if you have one) are verified by the public records and agencies such as county records, planning and zoning etc. you are responsible to verify for yourself. In addition, If you are unrepresented there are a few major issues to take care of: make sure you verify the seller is the owner or legal representative (dah! right?) You would be surprised. I am representing someone right now who owns a home. She had renters in it who tried to sell the house! Have a title search - your Title Company will perform this and send you docs- Read them.

Be sure you do a couple more things in addition to waiting for the lender's underwriter to complete all their docs; be to be sure you've checked out the property disclosures thoroughly, and ask questions if items are not filled in or answered to your satisfaction. Ask about HOA's if applicable. If there are HOA's ask for minutes (and Reserve Study info) from the last several months to see if there are issues you wouldn't want to deal with. Be sure to have a professional home inspection. Don't skimp here. They will provide a written report (with pictures) showing any areas of concern. All negotiations need to be done prior to contract deadlines. ( Important! ) Make sure all your verbal negotiations are memorialized in writing and that any negotiations for repairs are documented likewise. Be sure closing is contingent on any repairs being completed. If you would like help please contact me. If you are not yet represented you should be: as asking this question shows there are reasons for concern). Having representation is a safeguard for those buying a home. The seller or the seller's representative exclusively represents the seller and doesn't take your best interests into consideration.

I hope this helps! I have more to say but you can contact me if you need more help.

June Lizotte, Broker
Providing REAL Service
Prudential NW Properties
6400 SE Lake Rd. Suite
Portland, OR 97222
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Tom Inglesby, Agent, Portland, OR
Wed Oct 29, 2008
Just make sure all the inspections and everything is ok. Did you inform the lender and title company you ar moving up the date? The seller likes to close early since they will have to pay less on their loan. Some times sellers want the extra time to move so you might have a rent back of a few days. Most sellers don't want to move or can not move until you close on their house to buy the next one.
Good Luck.
Tom Inglesby, Broker
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Lana Lavenba…, Agent, Grants Pass, OR
Wed Oct 29, 2008
That is a great plan - I do not see any reason why you can't close early. As long as your loan documents and your funds are ready to go and the seller is out - it probably will make everyone happy. Congrats on buying a home!
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Jean Pritcha…, , Gresham, OR
Wed Oct 29, 2008

Most everyone loves early closing. If your lender can get the loan finished and to escrow so you and the sellers can sign early, and the sellers are willing to move out in that time frame, go for it!!! Most lenders like 30 days as it take time to get the appraisal done and the doc's through underwriting.

Best of luck to you. Jean
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