“I saw your article on financing a cash sale within 90 days of closing for tax benefits… Can you close in 10 days?” Yes.
Its one thing to close a deal in two weeks (which also happened this month), especially when the minimum amount of documentation required is 25 separate documents, but closing a deal in 10 calendar days, including a holiday and two Sundays in that equation, is pretty remarkable. What’s funny is that most people think that a quick close is up to the lender when in fact it’s really the buyer/borrower who leads the pace of the close. Then, the lender, agent, appraiser, escrow company and any other involved third party need to be in expedited lock sync to close timely.
So why was financing so important in this case? For this scenario, had the buyers NOT financed the property, they would have given up a probable $15,000 tax deduction. Further, they would have had a highly concentrated equity position in real estate, which was inconsistent with their financial-planning goals.
Another question is, “Why did they have to finance the property BEFORE they closed?” The buyers wanted a conforming loan (a loan that conforms to Fannie or Freddie); and conforming loans require a seasoning period of six months post close before the loan can fund. As outlined in our last article, you must be within 90 days of close to qualify as a purchase-money mortgage. So, the only loans applicable for funding post close within 90 days of purchase are non-conforming loans.