We have a great mortgage rate that is locked in for 45 days. We just found our dream house, but the sellers need 60 days to close. Is there anything we can do? – SEARCHING FOR A SOLUTION
DEAR SEARCHING: When you’re this close to finding your perfect home, the last thing you want to do is miss out because of timing. At this point in time, you need to figure out how strongly the sellers are committed to their closing date and see if there’s a way to work around it.
Let’s start with a little background. When a homeowner puts their property on the market, they must decide on three things right away: listing price, what’s included with the sale (ie. appliances, hot tub), and closing date (when the buyers will receive the keys). Of these, price and closing date tend to be the most contentious.
When the seller picks their closing date, they may be aiming for a certain window of time (ie. before the holidays) rather than specific date on the calendar. Sometimes they’re leaving themselves time to buy their next home, without knowing when they’ll be moving. Several factors might come into play, which is why the closing date (or range of dates) that a seller picks when they list their home may not be set in stone. Sellers might be willing to adjust their closing date for the right offer, and you’d be surprised at how flexible some folks can be if you’re close to hitting their target selling price.
Circumstances may prevent a seller from having much flexibility at closing. If that’s the case, your mortgage specialist may be able to find a work-around. If a closing date past 45 days is all that’s standing between you and your dream home, a nominally higher monthly payment may be the solution.
It sounds like you’re down to the wire on the timing of your locked-in rate, so give your mortgage specialist a call. By helping you to understand the details of your mortgage and implications of your choices, they can help you decide how to proceed.
There may be a chance to acquire the home by your desired closing date. The purchase agreement could be drafted to let the sellers “rent the house back” from you for two weeks to accommodate their desired closing date. Some banks will accommodate this, so it’s worth checking out. If you’re seeking an uninsured high-ratio mortgage with less than 20 percent down, the “rent back” option likely needs to be approved by the mortgage insurer as well. The insurer and the bank both want to see that you’re not using the house as a rental property.
PRO TIP: Most problems are not best solved by text or email. You can often accomplish more in a three-minute conversation than you can in a three-page email, so pick up the phone and call your team of experts. When you engage key players in conversation, you’re more likely to find a solution, avoid misunderstandings and (most importantly) get things done. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.