Fast Closes and Rentbacks to Compete Against Cash; CD Timing

Rentbacks: All lenders offer lower rates for “owner-occupants” than they do for investors. To qualify for “owner-occupied” rates, buyers must agree to move into the property within 60 days of close.

Hence, most lenders allow sellers to rentback properties from buyers for up to 59 days.

Competing Against Cash Offers: Writing an offer with a 14-day close and then a long rentback (when sellers don’t want to close too quickly) is one way to compete against cash offers.

Closing Disclosure Waiting Periods: Buyers cannot sign loan documents until three “business days” have passed from the signing or “acknowledgment” of the Closing Disclosure (CD), setting out all of the fees and the terms of their loan.

We are often asked how this timing works, so this is a quick reminder.

Day #1 of the countdown is the day the CD is signed, and Day #3 is the day loan documents can be signed.

For example, if the CD is acknowledged on a Thursday, the buyer can sign loan docs on the following Monday; Friday would be Day #1; Saturday would be Day #2; and Monday would be Day #3 (borrower can sign on Day #3).

Note: Federal holidays and Sundays do not count as “business days.”

The table below sets the earliest possible days to sign loan documents after CDs are acknowledged/signed.