Escrow Timelines and Appraisal Refusals

Asked by Mary, La Canada, CA Sun May 10, 2009

We have not yet chosen a realtor and are confused by conflicting information. One realtor says that banks are scrutinizing and.or not accepting appraisals and that average times for a house to be in escrow have increased to up to 60 days. Another says that that appraisal info is not true in this area and that he has closed escrow on several homes in recents weeks in less than 30 days. It's difficult to know what and who to believe and would appreciate further clarification.

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BOB Khalsa, Agent, Newhall, CA
Sun May 10, 2009
BEST ANSWER
Mary:

I am assuming that you are looking for a property in La Canada. If that is correct then the information you are getting is incorrect. As of today, there are 134 properties listed for sale in La Canada. Of these 100 have a price that exceeds $1,000,000. During the last 6 months, 67 properties have been sold. Lets take, as a reference 10 properties that have sold at the lower end of the spectrum. The escrow times have been 1, 10, 40, 60, 41, 45, 15, 5, 46, and 15 days respectively giving an average figure of 27.8 days in escrow. One property at the very bottom was in escrow for 162 days and this exception was not taken into calculation.

At the top end of the price range, the escrow periods are 60, 40, 19, 2, 6, 29, 39, 14, 40, and 15 days giving an average figure of 26.4 days respectively. I guess, if we are indeed talking about La Canada, then the first agent is making wild statements.

I have a question. How would you employ an agent to handle what is probably one of the most expensive purchase in your lifetime? Wouldn't you satisfy yourself completely on the agent's credentials before allowing him/her to represent you? Trust is good but the need to verify may also be prudent.

During your interviews of prospective agents, ask as many questions as you want in order to get a clearer picture on the capabilities of the individual. When required ask for references and testimonials. Do that and you should be fine.

Good luck.

Bob Khalsa
Broker Owner
United America Realty
bobfoxbat@gmail.com
213-926-5847
1 vote
Middleton And…, Agent, La Jolla, CA
Fri Jan 8, 2010
Hi Mary,
It really does depend on the situation, as every one is different, but truthfully it depends more on how well your home is priced.
The situations where appraisals are coming in low are when sellers have too high of expectations, and buyers are submitting too high of offers JUST to get into escrow right now.
If your home is priced well in comparison with your local comps, it shouldn't be a problem. Remember, banks ARE very conservative right now, and are only looking at things like upgrades to a certain degree.

Beware of anyone that tells you I CAN DO ANY DEAL IN 30 DAYS....and vice versa, of someone who is not optimistic about helping to sell your home.

Remember, anything can happen, so give yourself an advantage by KNOWING how much your home is worth before you list it, or even further putting it into escrow for a few weeks.

Best of Luck,
Justin
Web Reference:  http://www.sdhomeguy.com
1 vote
Chris Mabry…, , Tucson, AZ
Sun May 10, 2009
Hello Mary,
The average time frame for an escrow period is usually 30-45 days. Unless you are in escrow on a short sale, in which case, don't get your hopes up. These can take months! The specific situation will dictate the timeline. If the home is occupied, then the seller is likely to need at least a month to move out and make their new living arrangements. It also depends on what type of loan you have and how clear cut the financing is. Ask your loan officer how long they feel is necessary for them to complete their job. You don't want to write an offer until you know this info. Recently, with all of the foreclosed property and falling values, appraisals have been an issue. Different parts of the country, and even different neighborhoods, will all be unique depending on the recent market in that niche. It is always a good idea to carefully research the sold "comps" in the area you are looking. Especially before you write an offer. If the sold comps are very, very low, then there may be a concern. If the most expensive home to sell in the area in the past 3-6 months was $300K, and you are trying to buy a home for $350K, then there may be an issue. I suggest that you continue to interview real estate agents that do business in your area. Once you find someone that you trust and like, the you shouldtake their advise. They want to have a successful sale just as much as you do. Best of luck to you! I hope this helps.

Chris Mabry, SRS, e-PRO
Realty Executives Southern Arizona
Web Reference:  http://www.MabryHomes.net
1 vote
Five Star Te…, Agent, Burbank, CA
Fri Jan 8, 2010
Mary,
Each situation is unique however time in escrow involves a great number of factors. The price, the market, etc...However the banks are taking more time to analyze properties and approve loans. In La Canada the average time has increased dramatically over the last year because of the market and the higher end luxury homes are naturally moving slower in uncertain economic times.
0 votes
Phyllis Harb, Agent, La Canada, CA
Sun May 17, 2009
Mary, there is an article in today's LA Times about the new appraisal regulations. Although, it doesn't completely address your time concerns, it disscusses the management company as the middle man.
0 votes
Rowena Emmett, Agent, La Canada, CA
Sun May 17, 2009
Mary,

While it is true that banks are carefully reviewing appraisals and borrowers, each unique situation is part of a larger picture including which bank is handling the loan, the type of loan involved, buyer qualification, available comparables, etc.

There are time-frames in the CAR (California Association of Realtors) Purchase Agreement for the loan and appraisal contingencies. What we are seeing is the realization that the time frames for the loan and appraisal contingencies must be carefully established. Many times, as the agent of either the seller or the buyer, we have a conversation with the lender - in advance of negotiating the offer - to see what the lender feels are reasonable time frames for these contingencies as well as a reasonable closing date. Based on this information and joint effort, the buyer and seller are better able to agree on an escrow period and closing date.

If you would like further information on these issues, we would be happy to have a discussion with you.

Best wishes,
Fran and Rowena
Web Reference:  http://www.franandrowena.com
0 votes
Phyllis Harb, Agent, La Canada, CA
Sat May 16, 2009
There are new appraisal guidelines for conforming loans (Not FHA). I have written about them on my blog @ http://los-angeles-real-estate-blog.com/2009/05/12/more-on-t…

When you sell your La Crescenta home, the buyer selects the lender. Depending upon the lender, a 30 day escrow is possible, but 45 days would be more likely due to the new appraisal guidelines and because lenders are again becoming backed up (their service is slower).

When you buy the home in La Canada, you select your lender and have more control of that time frame.
0 votes
BOB Khalsa, Agent, Newhall, CA
Tue May 12, 2009
Hi Mary:

The average for La Crescenta is 30.8 days. So it's pretty close to La Canada. La Canada on the other hand has a lot of high value properties as compared to La Crescenta.

Bob
0 votes
Mary, Both Buyer And Seller, La Canada, CA
Tue May 12, 2009
thank you both, Bob and Chris. Your information is quite helpful. Bob, would we be correct in assuming that the escrow times in La Crescenta (above Foothill) would be similar to the situation in La Canada?
0 votes
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