You’ve purchased your new home and you’re ready to move in, but before you can, you need to go through the closing process—and that can take some time. Knowing what you can expect when you close on a house—including how long you will likely have to wait between having your offer accepted and turning the key in the door on moving day—is helpful in setting your expectations and easing the transition. It can also help you with making a plan for packing, arranging transportation, and transferring your utilities.
So, how long does it take to close on a house and what are the various steps involved? Here’s what to know.
How long does it take to close on a house?
The current average closing time on a home is 51 days as of April 2021, according to the National Association of Realtors. That’s up from the average at the same time the previous year, which was 42 days, but down from the March 2021 average of 52 days.
Things that affect closing speed
There are a number of factors that affect the amount of time it takes to close on a house. Here are some of the big ones.
Cash vs. loan
As you would probably expect, it takes longer to close on a house if you need to get a mortgage. That’s because you will need to account for the loan approval and appraisal processes.
Type of mortgage
Government loans take longer to close than conventional ones. That’s due to the extra qualification steps that are required before you can get approved for government-backed loans. There are lot’s of loan options to consider. We will work to find the loan that is best for your personal situation.
Our hectic market may lead to a longer closing period. Appraisers, home inspectors, and mortgage lenders can only do so much at once, and it makes sense that they’d be delayed if there are more people in need of their services.
Pre-underwriting or pre-approval
Getting a mortgage pre-approval or pre-underwriting are two things that can significantly reduce the amount of time it takes to close on a house. They can also make you a more attractive buyer. Using Stanford Mortgage’s exclusive “Buyer Protection Plan” can enable a Buyer to make an offer without a loan contingency.
The amount of time to close on a refinancing loan is usually longer than a new mortgage. That’s because they tend to happen in bulk, with lower interest rates driving many homeowners to seek out the process at once.
Home inspection results
Based on the results of the home inspection it’s possible that you’ll need to go back to the drawing board and either amend your offer or make repair requests (and wait for them to get completed). Just in case, I will make sure that you have an inspection contingency in place so that if something major comes up you’re protected.
Steps in the closing process
To better understand why it takes as long to close on a house as it does, you’ll first want to understand what happens after an offer is accepted on a property. There’s a lot that goes into transferring a home from one owner to another, including various legalities and administrative tasks. All of these things need to be accounted for in the closing timeline, and all of them can take longer or shorter depending on demand, conditions, and even where you live.
Assuming you’re going the traditional route, these are the closing steps that will need to take place before you can finalize your deal and move in:
Step 1: Financing
If you haven’t worked out financing before putting in your offer, you’ll have to do it afterward. We will get you started looking for your optimal loan immediately to get approval and underwriting done ahead of time so that you can skip a lot of steps in this part of the process.
Average length of time for mortgage approval: About two weeks.
Step 2: Title search
A title search is what ensures that the other party is legally allowed to sell the property. It also lets you know if there are any obstacles to the sale taking place, such as liens or an alternate claim. Your Title Company will handle this step for you, so there’s nothing for you to do here but wait.
Average length of time for a title search: About 10 to 14 days.
Step 3: Home appraisal
The home appraisal tells the bank what the property is worth and is a key step in non-cash home purchases. If the appraisal falls short you may not be able to get a large enough loan, so this could stall the closing process indefinitely depending on your circumstances.
Average length of time for a home appraisal: About two weeks.
Step 4: Home inspection
Before you close on a house you need a qualified home inspector to come through and do a comprehensive evaluation of the property. During the home inspection, the inspector will check out everything from the roof to the foundation to the electrical and plumbing systems, plus all other key exterior and interior features. This is something I will coordinate for you.
Average length of time for a home inspection: About 3 days to a week to get an appointment, 2 to 4 hours for the inspection itself, and 3 to 4 days to get the completed report.
In addition to the steps above, there are a few other things you will have to accomplish before closing is complete. You will need to do the final home walkthrough and sign lots of paperwork on your actual closing day. Of course I will be with you every step of the way to help you navigate the process.
Tips for an efficient closing process
Most buyers are looking to close on a house as quickly as they can. If you’re one of them, here are some things that you can do to try and speed up the closing process and move into your new home sooner.
- Don’t make any large deposits or withdrawals during the closing period. Your mortgage lender will require additional documentation for any big changes you make to your finances before your loan closes. This slows everything down, and it could impact your rates too.
- Don’t apply for any other loans. When you’re trying to close on a house you want to refrain from taking out additional credit. Wait until later to buy a new car or take out a personal or business loan.
- Do stick with your job. Just like new credit or a big swing in your bank account, a new job is almost certain to upend your mortgage approval process and slow down your closing. If it’s too good of an opportunity to pass up, just be sure to adjust your expectations for how fast you can close.
Just how common are closing delays? According to the February 2020 REALTORS Confidence Index Survey, 77% of home closings happen on time. Meanwhile, 19% of closings are delayed but do eventually finalize, while 4% of closing contracts are terminated before completion.
How long does closing day take for buyers?
Closing day itself is your last hurdle to get through. There shouldn’t be anything major that can stand in the way of your deal.
Assuming that all goes smoothly, set aside about one to two hours on closing day. This should be enough time for signing paperwork and getting your keys. You may also be able to request that your closing be done digitally. This allows you to complete most of the paperwork right from home, meaning a much shorter face-to-face meeting.