You found your dream house and the seller accepted your offer. Before moving in, there’s a long list of steps that must be completed before you close on the house and receive your new set of keys. The closing timeline is different for everyone, but by knowing what to expect and working closely with your agent and lender, you can potentially save time and minimize any frustration.
How Long Does It Take to Close on a House?
Once your purchase agreement is fully executed, meaning all parties have signed, you can expect to close your loan within 45 days.
After you make an offer on a house, there are several steps that must be completed before you get to the closing table. However, there are some measures you can take to help save time. In some cases, you can close earlier if you are willing to pay for a rush appraisal or if you work with our loan originator to be fully pre-approved prior to executing your real estate contract.
Can Closing Be Accelerated?
There are factors that can either delay or speed up the closing timeline. It is really all about planning and working with someone you trust and feel comfortable communicating with.
Having your documents in order and getting preapproved before looking at homes can save you a lot of time and potential heartache. Being Pre-Approved and using the Buyer Protection Plan from our sister company, Stanford Mortgage, will allow you to write an offer without a loan contingency. This improves the likelihood of your offer being chosen in competitive situations
The Closing Timeline
Get your inspections in order so you can obtain an insurance quote and avoid being defensive when an Insurance underwriter is asking you to explain something. We will work with you to be sure you get a good quote. Buying a home can be stressful but it is also very exciting and can be finished up quickly with great teamwork.
Negotiate and Sign the Purchase Agreement
The first step toward closing on a house is negotiating elements of the purchase agreement before signing. Purchase agreements typically include contingencies, which are conditions or actions that must be met for the real estate contract to be binding. Both the buyer and the seller must agree to the terms of the contract.
Here are some common contingencies you may find in a purchase agreement:
- Inspection contingency: This allows the buyer to have the home inspected within a certain time frame. The buyer can negotiate repairs or cancel the contract if problems are found with the home.
- Appraisal contingency: This allows buyers to back out of the deal if the home appraises for less than the purchase price in the contract.
- Financing contingency: If the buyer can’t secure financing within a certain amount of time, then they can cancel the contract.
- Title contingency: The title for the property must come back clean before the contract is binding.
- Home sale contingency: The offer is contingent upon the successful sale and settlement of the buyer’s current home.
While there is no set time limit for how long you or the seller have to respond to negotiations. Most agreements will dictate a response within one to three days.
Complete and Submit Your Mortgage Application
This step is between you and your mortgage lender. You’ll need to complete the mortgage application and provide documentation of your financials, including bank statements, W-2 forms, pay stubs and proof of assets. The lender will also run a credit check. While this can take some time, having a pre-approval will speed up the process.
Your lender is required by law to send you a closing disclosure at least three business days before closing. This document gives final details about the mortgage loan and includes loan terms, your monthly mortgage payment amount and how much you will pay in closing costs and fees.
Open an Escrow Account
An escrow account is opened, which holds earnest money or “good faith” money to show the seller that you’re serious about purchasing. Earnest money is typically deposited into the escrow account on the next business day of the contract going into effect.
Order a Title Search
We will need to order a title search either through a title company. During a title search, public records are examined to make sure that there are no claims, liens or other issues with the property. Any problems could prevent the seller from legally transferring ownership of the property to the buyer. The title search process can take 7 to 10 days to complete.
Get an Appraisal
If you’re getting a mortgage to pay for your home, your lender will require you to get an appraisal on the property. Lenders will require an appraisal to make sure the home is worth its purchase price and can be sold to cover any losses if you default on the loan.
The appraiser will visit the property and spend a few hours inspecting the interior and exterior of the home. The appraiser also compares the property to similar properties that were recently sold in the area. The time it takes from ordering an appraisal to receiving the report could take several days to a week or more.
Home Inspection and Pest Control
Although a home inspection is optional, it’s highly recommended that you get the home inspected for potential defects.
A typical home inspection takes several hours to complete and the report could take several days to complete. The report includes any issues found on the property and you can work with the seller to have some repaired before moving forward. If your inspector finds major issues with the home and you have an inspection contingency, you can walk away from the deal.
Do a Final Walk-Through of the House
Before closing, you’d do a final walk-through of the house with me, your agent. If you requested repairs be made after the inspection, now is the time to make sure the seller fulfilled their end of the deal.
We are also making sure the home is in the same condition as when the contract was entered into and has not in way suffered any damage.
Your closing appointment is the finish line. This is when you sign the final paperwork, make your down payment and pay the closing costs listed in your closing disclosure.
Missing your closing date could result in certain penalties and the purchase contract will expire. You will want to do your part to avoid this because you can potentially put your earnest money deposit, at risk. It is important to communicate throughout the process so if there is a potential slow down, we involved can discuss an extension to your contract.