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How Long Does It Take To Close On A Home

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The closing process for a home purchase may take up to a week, depending on what property you are buying, whether you have a mortgage, or what type of loan. Two periods make up the closing process:

  • Escrow: 

    refers to the period between the date you sign the contract with the seller and the day you close.

  • Closing Day: 

    This is the day that you sign all paperwork, receive the keys, and become an official owner of your home.

What Is The Average Time It Takes To Close On A House?

Closings can take so much time because of the financing requirements. However, buying with cash can speed up the process. Cash can be used to buy a property in as little as seven days, provided you waive any contingencies.

What Is The Average Time It Takes To Close On A House With A Mortgage?

Conventional financing can be used to buy a home. The closing date for conventional financing buyers is typically between 30-45 days. Because of the stricter requirements, special loans such as FHA, VA, and first-time homebuyers programs can take longer to close.

Timeline For The Escrow Process

Once you have made an offer on a property and you and the seller have agreed on the terms (including the closing date and price), you are officially in escrow. These are the steps involved in the escrow and the average time each one takes. The escrow process can vary depending on the market, lender, property type, financing option, and the complexity of the transaction. It is important to note that not all of the steps are performed simultaneously.

  1. Sign the contract and confirm the closing date

  2. Close the escrow account within a few days

  3. Inspection and repairs (1-2 weeks).

  4. Underwriting and mortgage application (5-20 days).

  5. Appraisal (1-2 weeks)

  6. Purchase homeowner's insurance and Title insurance in 1 day

  7. Approve loan, also known as "Clear and Close" (one day).

  8. Perform a final walkthrough (one day).

  9. Close on your new home by attending your closing appointment (1 day).

 

Keep in touch with your lender, real estate attorney, and real estate agent to ensure you understand each step. They will be able to answer your questions and provide any documents that you require. Be available to respond as soon as you can.

The Process Of Purchasing A House With Cash

You can buy a home with cash, but you will still need to meet common contingencies such as a home inspection contingency. However, you won't have the mortgage application or wait for approval. Cash buyers may choose to waive any contingencies, which can help speed up the process.

What Time Can You Close The Appraisal?

If there are no issues in your appraisal, the lender will send you the "clear-to-close" approximately one week before the agreed-upon closing date. You may receive your "clear-to-close" sooner if you have requested an extended escrow period or a later closing day.

What Can Cause Delays In Closing A House?

Usually, the seller will agree on the closing date during negotiations. However, unexpected setbacks could cause your closing date to be pushed back by a few days or even weeks. These are the most common reasons for a delayed closing.

  • Financing For Buyers

    Delays in closing are usually due to the mortgage process. However, it could be due to appraisal issues, missing financial documentation, or inexperienced loan officers.

  • Creditworthiness Changes

    Your lender might need to reevaluate your credit profile if you have made large purchases or taken out another loan that has negatively impacted your debt/income ratio. However, this can take some time.

  • Low Appraisal

    It should go smoothly if your appraisal is at or above the contract sale price. However, a low appraisal can mean that you will need to negotiate with the seller or raise enough money to pay the difference between the appraised value of the home and the sale price.

  • Title Issues

    The transaction's closing can be delayed if the seller has unresolved judgments or liens on the property.

  • Insurance For Homeowners

    You must show proof that you have homeowner's insurance on the property you are buying to close. You could delay closing if you don't complete this step or haven't provided the proper documentation.

  • Home Sale Contingency

    If you have a contract that says you cannot close until the sale of your home, it could delay your closing.

  • Slow Requests For Repairs

    Negotiations and repairs can delay your closing date if you have a back-and-forth with the seller about the necessary repairs based on the home inspector report.

  • Walk-Throughs Were Not Satisfactory

    Before closing, you will do a final walkthrough of the property. You may need to delay closing if the property is not in the same or better condition as when you offered.

Here Are Some Tips To Help You Stay On The Right Track With Your Closing Timeline

Even if your mortgage is required, you can speed up the closing by being ready, responsive, diligent, and decisive during the escrow period.

  • Pre-Approve Your Application

    Before you start looking for homes, make sure you get pre-approved to know if you are eligible for a loan amount that suits your needs. It will help you avoid delays during the escrow process, and it will make any offer you submit more credible in the eyes of sellers since they will know that you can afford the home.

    You will need documentation to prove your income for a pre-approval. This includes pay stubs, bank statements, and tax returns. Your lender will also run your credit to verify your accuracy.

  • Make An Appointment For The Inspection As Soon As You Can

    Once your offer has been accepted, sign the contract and schedule your home inspection. Some states require that you schedule your inspection within 7-10 business days. You will have several days to examine the report and ask for repairs or credits from the seller. Remember that the seller will respond within a few days.

  • In The Event Of A Low Appraisal, Have A Backup Plan

    Appraisal reports are subject to variation, and it is rare for two appraisers to value the same home. Your lender may not allow you to finance the home if the appraised value of the home you are buying is lower than the selling price. If your appraisal is low, you have two options: make up the difference with cash or negotiate the sale price. Sellers will likely offer multiple offers in a competitive market, so you should not expect them to lower the price.

  • Employ An Experienced Lender

    For a smooth and transparent closing, find an experienced lender who is familiar with your market's requirements and intricacies. To optimize your experience, you can use an online lender. 15% of homebuyers who used an online lender to obtain a mortgage in 2019 were able to do so. Younger buyers are more likely than older buyers to choose an internet lender.

  • Respond Quickly To All Documentation Requests

    Your lender may need to see your financial documents and sign disclosures to prepare your loan for closing. In addition, you may be required to perform certain tasks by your title company or escrow company. To keep the escrow process moving along, you must respond to all inquiries as soon as possible.

How Long Does Closing Day Take?

Closing day, which is when you sign the final paperwork to purchase the home, usually takes 1.5-2 hours. If everything goes well, however, you should allow plenty of time for it to take longer.

You'll sign documents at your closing appointment (a list is below) as well as pay your down payment. At this point, your lender will wire the remaining amount of the sale price. While the title agent or escrow agent will facilitate closing appointments, you will also need your attorney and/or agent present. The attorney may assist the closing appointment in closing attorney states. Bring your ID, cashier's cheque, proof of insurance, and the purchase or sale contract.

Sellers can sign paperwork in advance, but buyers must usually attend the meeting in person.

What Documents Are Buyers Most Likely To Sign?

  • Promissory Note

  • Mortgage/deed of trust

  • Escrow Disclosure

  • Signature affidavit

  • First mortgage payment

  • Appraisal acknowledgment

  • HOA documents (if applicable).

  • Only for new constructions, Certificate of occupancy

  • Disclosure about Equal Credit Opportunity Act

  • Truth-in-Lending disclosure

  • Mortgage fraud statements

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