July 18, 2009

Extensions happen, stay calm!


They say that buying or selling a home can be among the most stressful experiences of a person's life, and it is easy to get carried away and freak out. However, with a little bit of patience, preparation, and education, potential hurdles can be easily overcome. One common hurdle is what is called an "Extension of Closing".  If you aren't properly prepared, it could jump out at you from the shadows and cause all-manner of stress, chaos...possibly even binge-eating!

Here's what happens: Whether you're on the buying side or the selling side, chances are that by the week of closing you've had just about enough of haggling, packing, paperwork, and change-of-address-ing. You're ready to just get this thing the Hell over with!  It is at this point, more than ever, that you must remain calm and patient. The proverbial fat lady has yet to belt out that first note. Remember, real estate transactions take a long time, and sometimes they take even longer.

Extensions were relatively common before the current financial predicament, and it seems like they are even more common now. In my personal experience as an agent, I would have to say that at least 50% of the transactions I've worked on have had extensions of anywhere from a day to a couple of weeks. Lately, it seems like closer to 60-70%. The problems that arise are myriad- scheduling conflicts for signing appointments, or end-of-month traffic jams at the escrow office, though, in my experience, they are most commonly the result of a delay in the drafting of the Buyer's loan documents.

These days, mortgage brokers and loan officers are running around like headless chickens trying to get loans approved in the face of constantly changing requirements, rules and regulations.  Many banks, especially the larger ones, are having to constantly tinker with their programs to try to adjust to changing economic conditions, but their operations are so vast and nebulous that the brokers on the ground are never quite sure what the latest changes are. It takes time to get memos and rate sheets out to everyone who needs them. What ends up happening is that the mortgage brokers will think all their ducks are in a row and then, at the last minute, find out the rules now require a row of geese, instead. This might mean they need to request additional records from the Buyer, or maybe even redraft the loan docs completely. This can easily take an extra day or more. Thus, the dreaded extension. I don't mean to pick on the banks, it's just that this is  what I've been seeing in my recent transactions.  Obviously, the banks and their brokers are doing their best to remedy these issues...it's just going to take some time.

So…what can you do about it? Well...be patient. Remember to breathe. If you are the Buyer, try to make sure you have all of your loan paperwork submitted quickly, and stay on top of your mortgage broker! These are very busy people, but that doesn't mean you can't assert yourself as their top priority.

Understand that real estate transactions are fluid and flexible, and that the 30 or 45 day closing period is really more of a guideline than a concrete expectation. Sure, we'd all like to be able to plan ahead for things like movers, vans, and hotels, but things aren't necessarily going to happen according to your predetermined schedule, and you need to be ready to make adjustments on the fly. Try to remember how excited you are to get this over with, and stay focused on the future. Don't let the details bog you down, and please, please, PLEASE remember that it is not your agent's fault! If you need to vent, vent with your agent, not at them.

Thanks for reading. Comments welcome and encouraged! Click here to read my other Bellingham real estate posts!

By the way, I wrote this from the Woods Coffee at Boulevard Park, in Bellingham,Washington, right on the water. The setting is amazing and the views are the best around.

Rob LeRoy is a Seattle real estate agent and social media marketing coach with eXp Realty.

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