Thirty to sixty days on a standard LA multifamily transaction once the purchase agreement is signed. Financed deals run longer than cash deals. Larger deals with more complex diligence run longer than smaller straightforward ones. Buildings with clean pre-listing preparation close faster than buildings where issues surface during diligence. The escrow timeline is one of the most controllable parts of a multifamily transaction — by the seller, through preparation.
Week 1-2: Opening, deposits, title and due diligence kickoff. Buyer opens escrow, wires earnest money, receives preliminary title report, and begins physical and financial due diligence. Seller provides the full documentation package (rent roll, leases, operating statements, tax returns, compliance records).
Week 2-4: Inspections and diligence review. Buyer's physical inspector walks the building. Environmental review if applicable. Financial diligence reconciles rent roll, operating statements, and tax returns. Buyer identifies any questions or issues.
Week 4-6: Buyer loan underwriting (financed deals). The buyer's lender orders appraisal, processes loan documents, and finalizes financing. Most commercial multifamily loans take 30-45 days from application to commitment.
Week 6-8: Final closing preparation. Title clears any outstanding issues. Payoff demands obtained for seller loans. Closing statements finalized. Any last-minute negotiations on cost allocation or terms.
Close. Funds transfer. Title records. Keys and operating records transfer to the buyer.
Title curative issues. Undisclosed liens, easements, boundary ambiguity, or missing heir records can require legal work to clear. A 30-day extension for title curative is not unusual on older buildings.
Loan underwriting delays. Commercial lender diligence can surface questions requiring additional documentation. Slow responses from the seller side extend the timeline.
Environmental findings. Phase II environmental assessments, if required, take weeks longer than Phase I. Remediation discussions can extend further.
Unpermitted work or code enforcement issues. Discovered during inspection, these require either seller-side curative or negotiated resolution. Either extends the timeline.
Material re-trades. When diligence surfaces issues significant enough to require price or term renegotiation, the renegotiation itself takes time. Extension periods of 15-30 days are common.
Cash buyers. No lender underwriting timeline. Cash deals can close in 15-21 days on clean buildings.
Pre-listing diligence package. Sellers who have operating statements reconciled to tax returns, RSO registration current, permits documented, and compliance items addressed pre-listing typically close 15-30% faster than sellers who address these items reactively during escrow.
Known buyers. When the buyer has already underwritten the submarket (e.g., a local operator who has acquired nearby buildings), their diligence is faster because they already know the market.
1031 exchange buyers with clock pressure. 1031 exchangers operating under the 180-day replacement deadline often close quickly when their clock is pressed. This can be an advantage for sellers whose timing aligns.
Small building (4-20 units), cash buyer, clean preparation: 21-30 days.
Mid-size building (20-50 units), financed buyer, clean preparation: 45-60 days.
Larger building ($10M+), financed buyer, institutional diligence: 60-90 days.
Any deal with material diligence issues or renegotiation: Add 30-60 days.
The escrow timeline is largely determined by two things the seller controls: pre-listing preparation quality and responsiveness during diligence. The third major factor — buyer type and financing — is set at the time of offer acceptance. Sellers who prepare thoroughly and respond quickly during escrow close in the shorter end of the range. Sellers who use escrow to catch up on preparation close at the longer end, often with re-trades that reduce net proceeds.
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What happens if escrow falls through?
The purchase agreement is terminated according to its terms. The seller returns to the market, typically with information from the failed diligence that can inform how to price and position for the next buyer.
Can I close faster than 30 days?
Cash deals with minimal diligence can close in 15-21 days. Faster than that is rare and usually involves a buyer who has specifically prepared to close quickly.
Do I get to stay in the building during escrow?
If the building is occupied by tenants, they remain in place through escrow per their existing leases. The seller retains ownership and operation through close.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap.
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