Everyone in real estate knows that winter is a slower time for buying and selling homes. Most people would rather stay at home feeling warm and cozy than go out house hunting, so they wait until the spring or summer to start thinking about moving. But for buyers looking for a great deal on a home, house hunting during the winter may give them an advantage because there are few other buyers as competition. Not to mention, the sellers who put their homes on the market during the winter holidays usually do so out of necessity, not a desire to move between Thanksgiving and New Year’s Day! So, those looking to buy in winter may be rewarded for their efforts with a good deal on a home. Of course, they may also face some drawbacks, such as a closing delay as the holidays approach. Why is that? Here are the top reasons for a closing day delay for real estate transactions around the holidays.
One of the main culprits for the dreaded closing delay is the fact that nearly every business related to real estate closes for at least a day or two around the holidays. Whether you work for a real estate agency, lender, or title agency, you already know this—because you likely look forward to those days off yourself!
Even if your office only officially closes for Thanksgiving, Christmas, and New Year’s Day, that’s still three days where clients cannot expect to close. This gives them slightly less time than usual to get into that new house around the holidays.
Plus, your office may be open during those last few weeks of December, but it likely has a smaller staff. After all, with winter being the slow season of real estate, there’s no need for the full team to always be in the office. And then you have to account for employees taking a week off for the holidays, leaving a much smaller team to get closings done.
When you consider that this same pattern goes for most other companies related to real estate—like those in charge of completing home inspections and appraisals—you can see why the holidays could delay the closing day! This is especially the case when you factor in bank closures for the holidays, meaning the necessary funds will be delayed. Planning ahead is important during the holiday season and using a platform like paymints.io is available 24/7/365 is a huge plus to know exactly where your funds are at any time.
While your team works hard to accommodate those rare winter home buyers, you could find it difficult to completely avoid a closing delay around the holidays.
Fortunately, this isn’t a surprise. You can let your clients know this upfront as they gear up to go house hunting with Thanksgiving on the horizon. As long as they know to account for a possible closing delay of a few days, they should still be able to get a satisfactory closing experience.
Another reason for a possible closing delay comes from there being fewer business days around the holidays. Even if you’re a real estate agent who vows to work every day of December without taking the holidays off, you’d still have to account for other offices closing on federal holidays. This means there could be a closing delay for your clients.
For instance, if closing is supposed to take place sometime in the last week of December, you already know that Christmas Day will be unavailable for closing, leaving you with one less day. You can expect lenders and title companies alike to be closed on that day, which means a delay in distributing funds.
As a result, closing day may be delayed by a day or two for buyers looking to move in during winter. While that’s not a long delay and shouldn’t be a deal-breaker for most buyers, it can be disappointing to push the move-in process by even one day. This is especially true if buyers have a special reason for wanting to be done by a specific date or are simply on a tight schedule.
To avoid any last-minute disappointment, be sure to remind clients they might face a closing delay of a day or two when they buy a home in the winter. This way, they can plan accordingly as they house hunt just before the holidays.
One detail that your clients might not know about is the Closing Disclosure, which they must sign at least three business days before closing day. More specifically, recent rules combined two different acts—the Truth in Lending Act and the Real Estate Settlement Procedures Act—to form what is now known as the TRID rule.
The point of the TRID rule is to make sure all borrowers understand the terms of their mortgage loan before they officially close. Requiring them to sign it and then wait at least three days helps ensure they have time to get clarification or change their mind before closing day.
And in most cases, buyers have no issue with this rule. But when you consider that the three-day waiting period only includes business days—not Sundays or federal holidays—it may cause some delays during the winter.
For example, if a buyer receives the Closing Disclosure on a federal holiday like Christmas or Thanksgiving, the three-day countdown can’t begin that day. Instead, it will have to start on the next business day. So think of the holiday like having an extra Sunday during the month of closing. Basically, that one-day closing delay might not be a big deal as long as your clients are aware of it ahead of time; be sure to tell them about how the TRID rule works as the holidays approach.
To sum up, closing around the holidays doesn’t have to be a hassle. Sure, there may be a closing delay of a few days, but you can always let your clients know this as they start looking at homes. And there definitely doesn’t have to be an extra delay when it comes to transferring money for escrow on closing day, since you have the option of using a platform like paymints.io, which doesn’t stop working on holidays!
So as long as you work with the right digital payment platform, you can make a secure money transfer on time. If this sounds like a solution you and your clients could use as closing day approaches, contact paymints.io today to schedule a demo and learn more about our platform!