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June 9th, 2009 2:40 PM by David W. Welch
If you are planning a real estate purchase here in Orlando make sure you plan for plenty of time for you lender to close the loan. Every lender I know is asking their Realtor partners to write contracts with 45 days to close. I have spoken with agents in other markets that are not experiencing this, so ask your agent what is going on in your market. Here in Orlando the norm has become 45 days. That does not mean that there are not deals closing quicker, anything is possible. I am just passing along what I am dealing with personally, and what other agents and lenders are sharing with me. It just takes longer to get the loans closed.
There are a couple of reasons for this slow down. First, the lenders have had layoffs too. There are just fewer people to process the loans. The other issue that is overwhelming the loan processing departments is re-financing activities. Virtually every loan officer I have ever spoken with says that purchase money loans take priority over re-finance loans, but at some point they have to close them too. The exceptionally low rates that we have had for several months now have stimulated a lot of re-financing activity. Sales are also way up from where they were last year. Combine the higher sales activity with the increased re-financing activity and fewer people to process the loans and you get a longer escrow. The second issue that is already effecting closings is the implentation of the new HVCC appraisal guidelines. This just went into effect May 1st, and it is already causing additional delays. There are communication problems as well as increased issues with appraisals.
Add these delays to the issues created by negotiating contracts for short sales and bank owned properties and the time to purchase could easily reach two to three months. This will become very important to those of you looking to take advantage of the first time home buyer tax credit.
Orlando Real Estate, David Welch Real Estate Optimist, @RealtyOptimist