I try to discourage contract on listings that come in with a closing 3 months out, what do other agents do? Shelley Bryant, Villa Realty

Asked by Shelley Bryant, Englewood, CO Thu Jul 5, 2012

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Marianne Ban…, Agent, Englewood, CO
Thu Jul 5, 2012
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Get to the bottom of the 3 month close first. Typically, after consulting with the Sellers, I suggest that we maybe do first right of refusal, that the seller can still show the house, another offer can come in, and the original buyers have the right to remove the 3 month closing contingency. Although, our market is so hot right now, I don't know that I would go there unless you've been listed for quite awhile.
0 votes
allan erps,A…, Agent, Pearl River, NY
Tue Feb 12, 2013
Typically in my particular area that is a normal time frame so I would not discourage that here.
1 vote
The Kinslow…, Agent, Centennial, CO
Thu Jul 5, 2012
Whatever works for my Sellers, works for me. If it's my Sellers and the Buyer wants 3 months then we have a lot to talk about. We are going to want Inspections and Appraisals done right away, then we are going to want a larger non refundable Earnest Money. The cost of waiting another six weeks may be much better then the cost of a price reduction if we aren't getting any other interest in their home. Then there's the timing to look at. If we wait 3 months and the Buyer does back out, what market are we going to be in? If this puts us at the start of a slow selling season, maybe it's not a good idea to take this offer. Is the Buyer a strong Buyer are we going to wait 3 months and find out they don't qualify for their loan? So much to think about, but ultimately it's up to the Seller.

Good Luck Shelley, I hope your Seller gets top dollar for their home....unless of course I bring the Buyer! :)
1 vote
Tracy Shaffer, Agent, Denver, CO
Tue Jun 10, 2014
I've never taken a 3 month close. Standard here is 30 days, 45 if needed, but unless the buyers and sellers really needed that kind of time frame and it works for my clients, why would you?
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Debra (Debbi…, Agent, Livingston, NJ
Wed Jun 19, 2013
Just as a point of information..........

I don't normally answer year old questions like this one - but I was surprised by the responses to learn that, apparently in CO, a 90 day close is considered to be a long, drawn out period of time!

I am with Allan Erps on this - ( I am in NJ, he is in NY - maybe it's an east coast thing) here, a 90 day closing is common, and nothing anyone worries about, or would be cause to ask for a right of first refusal.......nor would we "discourage" a seller from accepting an offer with that kind of closing.......in fact, many sellers prefer the extra time.

Interesting how business practices can differ so greatly from one area to the other!
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Dana Brown, Agent, Denver, CO
Wed Jun 19, 2013
If the Buyers are willing to make the Earnest Money hard to give an additional level of comfort to the Seller, then it might work, but if I were the Buyers' agent I would not allow this - and, yet, if I were the Sellers' agent, I would insist on it! The Right of First Refusal seems the most appropriate!
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Julie Montgo…, , 80238
Wed Jun 19, 2013
I totally agree. In fact I try to discourage closings more than 4-6 weeks out because too much can happen, like the buyer changing his or her mind. Best bet is don't give a buyer TOO much time to re-think. Julie Montgomery, Elite Denver Home Sales
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Kathy Hansen, Agent, Englewood, CO
Tue Jun 18, 2013
Typically I represent the buyer and don't recommend a far-flung closing from that perspective either. The property condition may change or the lender's approval may be lost due to a change of employment or some other factor not envisioned at the time of contract execution.
If forced to write a 90-days-off contract, I would at least obtain lending approval within the customary, shorter, window so as to assure the seller that the earnest funds would be at risk in event of failure to close -- hoping thereby to garner seller approval of the proposal.
In this market, I would be surprised to see many sellers accept a proposal that is not geared to close within the next 60 days max, for the reasons expressed by Shelley.
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Ethan Besser, Agent, Englewood, CO
Tue Apr 30, 2013
I prefer quick closes to drawn out ones.
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Julie Montgo…, , 80238
Tue Feb 12, 2013
I'm with you -- anything beyond about 45 days is a huge risk the buyer will find a way to get out.
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Robert McGui…, Agent, Denver, CO
Sat Dec 1, 2012
Shelly,

I would definitely discourage a closing for 3 months out unless there was a specific reason that it would benefit the seller. In Denver, the market is so hot that it would be no reason to tie up a listing for that long with the many other options available to close sooner and move on with the seller's plans. Plus, my thought is always that the more time you have a contract in limbo, the more things that can go wrong and it is not worth it. I feel the same about 'right of first refusal' deals. It still eliminates a lot of buyers who won't look and so many things can go wrong after months of waiting.

Robert McGuire ASR
Realtor/Consultant
Your Castle Real Estate
Direct - 303-669-1246
http://about.me/robertmcguire33
0 votes
Shelley Brya…, Agent, Englewood, CO
Thu Jul 5, 2012
Of course its ultimately the sellers decision- but I believe our role is to advise them and provide options and they decide on what they want to do.
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Cory Fitzsim…, Agent, Golden, CO
Thu Jul 5, 2012
"Why do you need three months?" That is the primary question. It is not my decision to accept a contract, it is the sellers. How is the market? How many showings? Other offers? Did they fall through? There are many things to consider on both sides and each one is unique. The best decision is the sellers... You all are working towards a goal of closing.
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Dana Brown, Agent, Denver, CO
Thu Jul 5, 2012
I want to see an increase in earnest money equal to the funds coming to closing - i.e. if it is FHA, they would need earnest money of the 3.5 % - and it would not be refundable if the buyer does not close. Lenders don't like to lock rates that far out and this could be an issue, but as long as the inspection and appraisal are done within a normal time frame, say 4 weeks, then it can sit under contract for another 6-8 weeks. For me, it is all about making sure my seller is not harmed by taking the home off the market - and putting more of the buyer's money at risk for non-performance usually helps. Also, make sure you continue to market the property for back-up offers.

The other way to go about it would be to do a Right of First Refusal which would put the buyer in first position, but allow the seller to entertain other offers, givng the buyer the opportunity to drop the contingency if the seller receives a competing offer. Both ways work!
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Shelley Brya…, Agent, Englewood, CO
Thu Jul 5, 2012
The reason is I have seen deals fall when the closing is pushed far out, someone gets sick, loses a job, etc so I think its more risk for the seller and then the property is tied up for 3 months- I was curious if other agents felt the same way, its not about the commission but the risk.
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Jeanne B Sym…, Agent, Greenwood Village, CO
Thu Jul 5, 2012
A comission is a comission - you can always create other business while waiting for the 3 month one to close - generally it can take 45 days to close on any regular deal, what's another 25 days?
Some closings (short sales) can take up to 6 months - Do you work for the buyer (buyer agency) what does your buyer want/think?
0 votes
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