The 21-Day Average Close, Stage by Stage

Twenty-one days is what closed files actually averaged

The 21-day average comes from files that already closed. It's a measurement, and it holds when the inputs arrive complete.

That makes it a sequence a broker can plan around. Every stage that slips does so for a reason that was visible on day one.

Three timelines start at once

Underwriting, the appraisal, and title all open on day one, and they run in parallel. That's where most of the time comes from.

A term sheet goes out within 24 hours. The appraisal is ordered and title is opened the same day the file arrives, before the signed term sheet comes back. Each of the three runs on its own track, so none of them waits on the one in front.

• Underwriting. Starts on the file as submitted, against the property's cash flow. No tax returns to collect first, no personal income docs to chase.
• The appraisal. Ordered on day one, before the term sheet comes back signed. It's the longest of the three, so it starts first.
• Title. Opened on day one. Liens, judgments, and unreleased mortgages surface in the first week, early enough to clear inside the same three weeks.

What a broker sends on day one

A complete file starts on the day it lands. When one input is missing, the file still moves, and the gap doesn't show up until the ratio changes at underwriting.

Five things do most of the work.

• The property and the entity. Location, unit count, and the borrowing entity. Complex multi-member entities are underwritten as they stand, with no seasoning requirement. Send the structure you have.
• The rent. Current leases where they exist, market rent support where they don't. On new construction, stabilized market rents are underwritten, so the comparables carry the number.
• A bound insurance quote. The premium that'll be in force after closing, quoted by a carrier.
• The current tax bill. The bill for the property as it stands today, including any reassessment that followed a sale or an improvement.
• The intended exit. How long the borrower plans to hold. Prepay is structured to that exit and it's set once, so it belongs in the first conversation.

The ratio is gross rent over PITI, and the floor is 1.0x

Principal, interest, taxes, and insurance sit in the denominator. Gross rent sits on top. There's no tax return requirement and no personal debt-to-income test, so the borrower's own paperwork rarely holds a file up.

Two of those four denominator inputs come from the broker: taxes and insurance. If either one is estimated, the ratio quoted on day one will move before closing.

Files slip on estimated numbers

Almost every file that runs past the average does it for the same reason. Something in the denominator was estimated at intake and replaced with a real number later. The replacement moves the ratio, the moved ratio changes the structure, and the structure has to be requoted. That's the delay.

Two inputs account for most of it.

• Insurance. The more commonly estimated of the two. A placeholder premium, a builder's risk policy still in force, or last year's number on a property that's since been improved. A landlord quote bound at intake settles it.
• Taxes. Especially after a sale or an improvement. A land-only bill from before the build gets carried into the file, and the real assessment arrives during underwriting. Pull the current bill for the property as it stands today.

Two things hold the average

Twenty-one days depends on three timelines opened on the same day, and on a set of inputs that are real when they arrive. Both are settled before underwriting starts.

A broker controls the second one completely. It's the one worth checking twice before the file goes out.