Definition:
A quick close refers to the accelerated process of finalizing a real estate transaction, where the buyer and seller agree to complete the sale in a shorter period than usual. Typically, closings take about 30 to 60 days, but a quick close can be completed in as little as 7 to 10 days, depending on the circumstances and the parties involved.

How a quick close works

A quick close can occur when both the buyer and the seller are prepared to move quickly and all necessary paperwork and financing are in place. The buyer must have their mortgage pre-approved and be ready to transfer funds quickly. Similarly, the seller should have all required documents ready, including proof of ownership and any necessary inspections or appraisals. The steps involved in a quick close include:

• Mortgage approval: The buyer must have already been pre-approved for a mortgage or have the funds available for the purchase.
• Documentation: All documents, such as the sale agreement, title transfer, and proof of insurance, must be ready for processing.
• Legal processes: The buyer’s lawyer will work quickly to finalize the transfer of the property and register the sale.

Why choose a quick close

There are several reasons why a buyer or seller may opt for a quick close:

• Faster possession: Buyers can move into their new home sooner, which is ideal if they have an urgent need to relocate or if their rental agreement is ending soon.
• Competitive advantage: In a competitive real estate market, making an offer with a quick close can make a buyer’s offer more appealing to a seller, especially if other offers are more conditional or have longer closing periods.
• Reduced holding costs: Sellers who are eager to sell may prefer a quick close to minimize the time they are responsible for paying property taxes, utilities, and maintenance costs.

Considerations for a quick close

While a quick close can be beneficial for both parties, there are some factors to consider:

• Mortgage readiness: The buyer must have already secured financing and have all necessary documents and approvals in place. Quick close deals are more likely to succeed if the buyer has been pre-approved or is paying with cash.
• Logistics and coordination: A quick close requires careful coordination between the buyer, seller, agents, lawyers, and financial institutions. Delays can arise if one party is unprepared or if there are last-minute issues with financing, inspections, or legal documents.
• Possible costs: In some cases, sellers may request a higher price or buyers may face additional fees for expediting the closing process, such as rush appraisal fees or expedited title services.

Advantages of a quick close for buyers

For buyers, opting for a quick close can have several advantages:

• Speed of transaction: The faster you can close on a property, the sooner you can move in and begin making it your own. This is particularly useful if you are in a time-sensitive situation, such as relocating for work or school.
• Reduced risk of deal collapse: The longer the closing process takes, the higher the chance that issues may arise (such as problems with financing, inspections, or the property’s title). A quicker close reduces the risk of these problems delaying or killing the deal.
• Avoiding higher rates: For buyers with variable-rate mortgages, a quick close may help lock in a better interest rate if the rates are expected to rise in the near future.

Advantages of a quick close for sellers

For sellers, a quick close can also offer benefits:

• Faster sale process: Sellers who need to sell quickly—perhaps to relocate or because of financial or personal reasons—can benefit from the faster transaction process.
• Less uncertainty: With a quick close, the seller doesn’t have to worry about prolonged negotiations or the deal falling through at the last minute.
• Appealing to motivated buyers: Some buyers may be willing to pay a premium for a quick close, making the offer more attractive, especially in competitive real estate markets.

Challenges of a quick close

Although a quick close can be appealing, it does come with challenges:

• Limited flexibility: With a compressed timeline, both buyers and sellers may have less flexibility to negotiate or handle unexpected issues that arise during the closing process.
• Rushed due diligence: A quick close may not allow enough time for thorough inspections, appraisals, or reviews, which could potentially lead to missed issues with the property.
• Stressful coordination: With the pressure to close quickly, all parties involved must work quickly and efficiently, which can be stressful for buyers, sellers, agents, and lawyers alike.

How to prepare for a quick close

To successfully complete a quick close, buyers and sellers should be fully prepared:

• For buyers: Ensure that you have pre-approval for your mortgage or enough funds to complete the purchase. Work with a lawyer to ensure all documents are in order and that you’re ready to act quickly when needed.
• For sellers: Make sure your property is ready for sale with all necessary inspections, appraisals, and paperwork completed. Consider working with a real estate agent who has experience with quick closes to help facilitate the process.

Last modified: November 11, 2024