One of the most common questions I hear from my clients, both buyers and sellers, is: How long is this process going to take? The answer is different depending on whether I’m speaking to the buyer or the seller, and on a variety of factors in regards to each, as I will try to explain. How long the process will take depends on several things. The following issues may cause the process to take longer if they affect the particular property in question:
- The Home’s Condition – Is the home ready to be shown? Does it need to be de-cluttered/deep cleaned? Is there deferred maintenance that the homeowner wants to take care of before putting it on the market, ie. painting, repairs, yardwork?
- Title Issues – Has the home recently been inherited? If so, will it need to go through probate before the heir(s) have clear title? Are there any liens or other encumbrances on the property that could potentially affect it’s sale or even it’s ability to be sold?
- Availability – Is the seller willing to make the home available at such times as a potential buyer and/or their agent may want to come see it? Is the seller willing to allow buyers to see their property (with their agent) without the seller “hovering”, interjecting into the conversations between buyers and their agents, or keeping certain areas or rooms unavailable for viewing?
- Price – Homes that are listed too far above market value are going to sit on the market for longer than homes that are priced at or below market value. Your Realtor should perform a Comparative Market Analysis (CMA) or Broker Price Opinion (BPO) on your home prior to placing it on the market to give you a better idea of the current market conditions and the value of your property.
- Current Market Conditions – Speaking of which, if there is a plethora of listings available that are similar to yours, or if the pool of likely buyers is small, your property will likely sit on the market longer and not garner as high of a price than it would if there were a dearth of listings and a gaggle of buyers all clamoring for what’s available. That’s the law of supply and demand, as we all know.
- Location, Location, Location – Really the most important factor, but unfortunately not one that either the seller or their Realtor can control. Homes that are closer to “town” and other amenities (schools, hospitals, colleges, stores, restaurants, parks, etc) are going to be in higher demand and sell faster than those in more rural locales.
- Escrow Issues – The escrow period can last anywhere from 7 days up to several months (or longer). The average is 30-45 days. Once a home has a bona fide offer that has been accepted by the seller, and escrow has been opened with a (preferably local) title company, the buyer has a limited amount of time during which they may perform whatever inspections or tests of the property they deem necessary, and/or get their ducks in a row as far as financing is concerned, in order to fully commit to the sale. This is called the contingency period. During this period of time the buyer’s agent might submit paperwork asking for the seller to amend the agreement in the contract to account for treatments or repairs called out by their inspections that they want the seller to perform, pay for, or credit them for at closing. This is also the time for the seller to fill out all of the disclosure paperwork and provide any information required by the title company or their Realtor.
- Readiness – Does the Buyer have funds enough to cover the entire purchase in cash plus title and escrow fees, or are they planning on getting a loan in order to make the buy? If the buyer needs a loan, have they already spoken to a lender to determine their buying power? Do they have a prequalification letter (prequal) from their lender stating how much the lender is willing to commit to their purchase? Do they have their earnest money and deposit funds readily available?
- The Search – How does the buyer come by listings of properties they might be interested in buying? Do they have a Realtor sending them listings via email, fax or snail mail based on a set of criteria discussed at a preliminary meeting? Are they finding listings online (Realtor.com, Trulia.com, Yahoo Real Estate, etc) and having their Realtor look into them for them? Are they willing to make several trips to look at different properties in person? When they get to each property, are they looking at every nook and cranny, or just getting a cursory feeling for each place before moving on to compare and contrast with the next?
- Flexibility – How quickly accord is found in negotiating the contract once the “right” property has been found will depend on both the flexibility of the buyer and the seller. Is the buyer still willing to continue with the sale if the seller isn’t willing to make repairs or perform treatments called out by the inspectors’ reports? Is the buyer offering less than the asking price to begin with? If so, are they willing to come up if the seller counters back with a higher price?
- Contingent Offers – Does the buyer need to sell another property before they will have the funds to close escrow on the new property? Does the seller need to find another property before they can leave the one the buyer is purchasing? These situations can create delays too.