There’s no such thing as perfect, and unfortunately, there’s also no such thing as the perfect day to close. An ideal closing date is different for the buyer than for the seller. Since mortgages are paid in arrears, it’s always better for buyers to close toward the end of the month to avoid prepaid interest—one of the prepaid costs when it comes to closing. If you’re a seller? It’s a different story. Most sellers aim to close toward the beginning of the month to pocket their returns as quickly as possible.
It might stand to reason that the fairest option for both parties would be to close right around the 15th of the month. However, this can lead to problems too, such as a bottleneck with title agencies, closing attorneys, and other parties who get busier mid-month.
There is really no such thing as a perfect closing day. Ever real estate transaction is unique.
While there are a lot of factors that go into choosing a closing date, we spoke with three real estate experts for their take on the best time to close. Spoiler alert: It’s a give and take, but your Realtor and lender can help settle on a closing date that suits all parties.
Look At the Big Picture
While planning your closing, you’ll probably focus on the day of the week or month, but Heather Wilson, a real estate agent with Property Managemently, suggests buyers look at the big picture when it comes to a closing date.
“While you may have some people think the specific days of a month are important, I would argue that the year should also be taken into account. If possible, a buyer and seller should choose the closing date based on the status of their taxes for that year. It might be more favorable on your tax bill if you either delay the closing date after the year or get it done right before the end of the year.”
As for sellers?
“You can expect to use deductions like the cost of selling the home and any repair or improvements that affected the sale. While this might not always be worth it if your tax benefits aren’t too much, it’s always worth it to try to figure out if it’s beneficial enough to slow down or speed up the process,” Wilson says.
The Best Time of the Month to Close
When picking a time of the month to close, Ashley Baskin, a real estate agent and advisory board member of Home Life Digest, says to review the closing costs and confirm that there aren’t any associated with specific closing dates.
“For example, will the fees be higher if you’re closing on the 31st of a month versus the 1st of the following month? Determine how the closing costs are identified, and choose a date that reduces your expenses,” she says.
But in general—for the buyer, at least—it makes more sense to close toward the end of the month, according to Grant Muller, owner and founder of Spaces Real Estate.
“If you’re a homebuyer with limited cash flow, you might benefit greatly from a closing day that occurs during the last two weeks of the month because of prepaid interest. In most cases, your lender will prepay interest to cover the period from the closing date until the month’s end. When you choose a closing date with fewer days left in the month, you’ll have less prepaid interest to pay back after you move in.”
There are also practical things to consider.
“If you close on a home and don’t move in for another half of a month or so, you’re essentially paying money for a property you aren’t using,” Muller says. “Try to schedule your closing date around the time you want to take possession.”
Baskin echoes Muller’s advice:
“Both buyer and seller will want to assess their schedules and identify a date that suits them. For example, both parties want to ensure that they have their movers scheduled, and the sellers will want to confirm they have a home to transition to. Buyers will also want to schedule the utilities to be transferred and turned on.”
The Best Day of the Week to Close
As a real estate attorney involved with hundreds of closings, David Reischer, a real estate attorney at Legal Advice, suggests that the day of the week matters more than the day of the month or time of year.
“Tuesdays through Thursdays are the best days to close for both buyers and sellers. The reason is, third parties that are involved in the transaction are typically available [on these days] if a problem arises. All too often, there is a small detail at the closing table that may require mortgage documents to be revised or an explanation from the title company about some small issue on the title. Mondays and Fridays are bad days to troubleshoot problems because personnel might be unavailable or even leave work early.”
Also, while it may seem tempting since it’ll give you more time to pack and move in, Muller says to avoid closing on the day before a holiday weekend.
“You don’t want your lender, attorneys, or other professionals to rush through the transaction process, as costly mistakes are more likely to occur under such circumstances. When you close in the middle of the week, there will be far less pressure to dash through the paperwork.”
While Baskin also suggests aiming for a midweek closing and avoiding holiday weekends, she recommends voicing concerns with your Realtor if you’re unhappy about your closing date. “Most parties are usually understanding if there needs to be a minor adjustment to, say, the moving date, and are willing to adjust accordingly,” she says.
As for sellers, Muller says most sellers are commonly encouraged to settle in the middle of the week as well, but before the end of the month. “This is because title companies are busiest during the last week of the month, and financial institutions are also very busy on the first, 15th, and last days of any given month,” he says.
The Bottom Line
So, what’s the compromise? “In an ideal situation, you might close on the home on a Tuesday or Wednesday during the second or third week of a given month,” Muller says, with a caveat:
“There is really no such thing as a perfect closing day. Every real estate transaction is unique for both buyers and sellers alike, so it’s difficult to nail down a specific date or even a time frame that’s ideal for both parties.”