Why Extended Timelines Kill Investment Real Estate Deals

Written by:

Rudi Davis

Date:

29 Jan 2026

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Real estate investment companies function as market makers, buying and selling contracts continuously, regardless of economic cycles. But Andrew Farnell, National Transaction Coordinator at Elite Closing Solutions, says this model carries a hidden vulnerability that becomes acute during periods of market uncertainty. When transactions drag on beyond their anticipated timelines, the risk of failure rises sharply as market conditions change.

Farnell points to a core challenge in the investment sector: complicated title issues can extend closing timelines from weeks to months, or even up to a year. “Sometimes it’s six months to a year to cure title problems,” Farnell says. He cites IRS tax liens and properties with dozens of heirs as examples that routinely delay closings far beyond standard expectations.

This delay exposes investors to a risk many fail to price in: the longer a deal remains open, the more likely shifting market conditions will undermine the transaction’s economics. While investors focus on property condition and buyer demand, Farnell argues that the risk of time itself can turn a profitable deal into a loss.

How Time Undermines Investment Deals

Investment contracts are typically priced based on current market conditions and expected closing dates. When title problems or legal disputes extend the timeline from a few weeks to several months, the deal’s original financial assumptions can quickly unravel.

“As contracts take months, market dynamics change,” Farnell explains. “Six months later, you’re likely to have one party unhappy with the deal—either the seller if prices have gone up, or the investor if prices have dropped.”

This risk is fundamentally different from the one that derails most traditional home sales. In conventional transactions, deals usually close or fall apart within 30 to 60 days due to financing, appraisal, or inspection issues. The process is quick, and the reasons for failure are clear.

In contrast, investment transactions often anticipate longer timelines to allow for due diligence and title work. But when complications extend those timelines well beyond initial estimates, both sides must reconsider whether the contract remains viable in the current market. This is not a rare occurrence: Farnell says that duration risk is the third most common reason investment deals collapse, after communication issues and end buyer due diligence problems.

The Challenge of Slow Price Adjustments

Real estate’s illiquidity makes duration risk especially problematic. Unlike stocks and bonds, which reprice instantly as new information emerges, real estate values adjust slowly as new sales data filters in.

“Real estate isn’t like stocks,” Farnell says. “It takes a long time for price adjustments to happen. It’s not like you buy a house and it’s going to drop $50,000 tomorrow. It takes months for that to materialize.”

This lag means that parties to a contract signed six months earlier may not realize until late in the process that the deal’s economics have shifted. By the time the change is apparent, both sides may have invested significant time and money in trying to close the deal.

This is especially problematic for wholesalers who operate on thin margins. If the resale market softens while they’re locked into a higher purchase contract, they may face a loss. The longer the delay, the more acute the risk.

Title Issues as a Risk Multiplier

Farnell’s experience shows that title problems are far more common in investment deals than in standard home sales. Investment properties often come with distressed histories, unresolved liens, or tangled ownership—especially in estate sales or properties held for decades without a clear title.

He describes cases in which IRS tax liens require federal negotiations, or in which as many as 27 heirs must be located and persuaded to approve a sale. “Imagine trying to wrangle up 27 people,” Farnell says. Each additional heir or complication adds more time, increasing the risk that market conditions will shift before closing.

During these extended timelines, seller motivation can change, buyers may reconsider, and the deal can fall apart—not because of operational mistakes, but simply because too much time has passed.

Market Maker Model and Its Limits

Farnell argues that investment companies’ role as market makers provides some insulation from market swings. “On the investment side, because it’s a market maker situation, I don’t really follow market dynamics… I make money no matter what market it is,” he says.

In practice, this means wholesalers and investment companies continue to transact whether prices are rising or falling. Their business depends on volume and efficiency rather than betting on market direction.

But this approach doesn’t eliminate duration risk. In fact, it may increase exposure to it. Because these companies always have deals in the pipeline, they’re more likely to have contracts in process when the market changes. A company that stops buying during uncertain times can sidestep this risk, but market makers, by definition, cannot.

This reality means investment companies need to adjust their pricing models to account for duration risk—especially on properties with known title complications. A deal expected to take six months to close should be discounted more than one scheduled to close in 30 days, not just for carrying costs, but to compensate for the risk that market prices may move unfavorably during the wait.

Impact on End Buyers

The risk isn’t limited to wholesalers. Rehabbers and other end buyers are also adjusting their offers to reflect market uncertainty. Farnell notes that these buyers are now pricing deals based on where they expect the market to be in six months or a year, not just where it is today.

“They need steeper discounts because they don’t know where the market’s heading,” Farnell says. “Investors have to price in potential losses for the next six to twelve months, because the future is uncertain.”

This creates a feedback loop: wholesalers must negotiate bigger discounts from sellers to make deals viable for increasingly cautious end buyers. The longer a transaction drags on, the more those discounts must be adjusted to reflect current market realities rather than the conditions that existed when the contract was signed.

Title: Delays and Market Volatility

The prevalence of title issues in investment deals means that delays are not rare exceptions—they are often routine. Each new complication, from a missing heir to a lingering tax lien, adds both time and risk. In a stable or appreciating market, these risks may be manageable, but in a declining or volatile market, they can be fatal to a deal’s profitability.

Farnell’s observations suggest that many investors underestimate the extent to which duration risk can erode their margins. The industry’s reliance on volume and speed only amplifies the problem when the market turns.

Looking Ahead: Pricing Time Into Deals

Whether investment companies adapt to this risk will depend on how markets evolve in the coming years. In stable conditions, the impact of extended timelines may remain a secondary concern. But in periods of volatility, companies that fail to price in the risk of time may find themselves holding contracts that no longer make financial sense.

The lesson, Farnell suggests, is clear: investors must learn to treat time as a core component of deal risk, not just an operational hurdle. Factoring in the cost of delays—especially those stemming from title complications—will be essential for anyone seeking to build a resilient investment business in a market where conditions can change faster than deals can close.