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How long does closing on a house take? It’s one of buyers’ and sellers’ most common questions about the real estate transaction process. Several factors determine your closing day, but the average time to close on a house ranges from 30 to 60 days with a mortgage. Cash purchases may be completed faster.
Managing the various steps in the closing process can be stressful. So, take a deep breath because this guide will answer the question, “How long does closing on a house take?”
How Long Do the Steps of Closing Take?
Your closing date depends on whether you enjoy a hassle-free closing process. According to the National Association of Realtors, 2020 saw 5.64 million existing homes sold nationwide. The vast majority went through without a hitch.
Understanding the question, “How long does closing take?” depends on learning the answers to questions like, “What can delay closing on a house?”
Here’s the complete timeline to closing on a house fast in 2023.
Purchase Agreement Signing: 1-3 Days
After the buyer and seller agree on a price, they’ll sign what’s known as a purchase agreement. In most cases, the purchasing agreement can be signed in one to three days. Otherwise known as the contract of sale, this document commits both parties to complete the sale.
Contingencies can add a day or two to the sale. Some of the most commonly requested contingencies include:
· Post-closing possession
Your purchasing agreement outlines aspects like the buyer’s home inspection period, earnest money, and closing date. From this point on, how long does closing on a house take is determined by the clauses in your purchasing agreement, assuming there are no delays.
Open Escrow: 0 Days
Opening an escrow is usually bundled into the contract of sale, so it’ll be opened on the same day you sign the agreement.
The earnest money will be held in an escrow account. Since it’s a standard part of the process, it won’t add any time to your closing.
Home Inspection: 5-15 Days
Buyers have five to 15 days after they sign the purchasing agreement to complete the inspection after signing the purchasing agreement. Ordering a home inspection is simple enough, and the actual inspection usually takes a few hours.
You’ll receive the written inspection report within 24 hours. Ideally, you should order your inspection before closing so there are no nasty surprises. However, nothing prevents you from ordering an early inspection.
Home Appraisal: 7-14 Days
After the inspection, it’s time to get the house appraised. Again, if you’ve sought buyer financing, this is something your mortgage provider will order. Although housing sales have fallen, with a decrease of 1.5% between August and September at the seasonally adjusted annual rate, appraisers remain in high demand.
The onsite part of the appraisal process should take one to three hours. However, you may have to wait up to two weeks before an appraiser can get to you.
If the appraisal results are lower than the contract value, the buyer can seek extra funding to close the gap or ask the seller to reduce the property’s price. Alternatively, buyers have the option to walk away entirely.
Mortgage Underwriting: 30-60 Days
Mortgage underwriting takes between three to four weeks, but there are variations between lenders. How long a lender takes typically depends on how risk-averse they are.
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For example, Bank of America and Chase Bank tend to take longer to complete the underwriting process. Larger lenders typically have more internal red tape they have to overcome before they cut you a check.
Having all your documentation in order can prevent your deal from getting stuck in the doldrums.
Clear Title: 15-30 Days
Obtaining a clear title is crucial for confirming that the seller owns the home and has no claims against it.
The speed of your local building department will influence how long a title search takes. Some counties can take as little as two weeks to complete the title-clearing process, but others can take a month or more.
If title claims are discovered, clearing the title could take months while each individual claim is assessed.
Final Walkthrough: Under 1 Day
The final walkthrough takes place immediately before closing. The buyer will walk through the house to ensure the property’s condition is identical to the last time they saw the house. It also allows the previous owner to perform a last check to make sure all their possessions have been removed.
Sign Final Paperwork: Under 1 Day
With a cash deal, signing the final paperwork can take just 30 minutes. But how fast can you close on a house and its paperwork with a loan?
Real estate experts say that buyers and sellers should expect to take anywhere from 60 minutes to two hours. Loan agreements come with a small mountain of paperwork, but sellers can skip closing by pre-signing the documents or providing their attorney with power of attorney.
What Can Cause Closing Delays?
Closing problems can derail a deal entirely, especially in hot markets where sellers have no motivation to wait for someone to get everything in order.
The frequency of canceled deals has risen, with 60,000 failed home sales declared in June 2022 alone.
How long can you delay closing on a house? For the most part, it depends on how patient the seller is. Too many delays and you may hand them the right to pull out of the deal.
Closing delays are more common than you think, with 24% of sales being delayed, but most usually go through in the end.
Buyer Financing Issues
Delays in getting approved for a home loan can cause significant delays and are the most common reason for delayed sales.
It’s becoming increasingly common in high-demand markets for sellers to demand a preapproval letter from the buyer’s lender before they agree to the sale.
Title issues aren’t always as clear-cut as a seller trying to sell real estate they don’t even own. Inheritance issues can surprise even the seller, especially if it’s a long-running dispute that hasn’t been followed up on.
Liens, active divorce proceedings, and if the seller performed renovations without a permit are some of the most common causes of title problems.
Appraisers who value the house under what the contract states can cause delays to the closing process. In this scenario, multiple options exist for buyers, including negotiating a lower price or walking away from the deal.
It underlines the importance of working with a reliable realtor who can direct you toward well-priced homes in the first place.
Inspection issues rarely lead to closing delays because most buyers order an inspector to list outstanding repairs before signing the purchase agreement.
However, problems can be discovered if you’re unlucky. In the event of unexpected repairs, relying on a repair contingency within the purchasing agreement can protect you from getting burned.
How Can You Make Closing Faster?
Closing faster is as simple as making sure you’re prepared for the process and have all the necessary paperwork. Here’s a list of the most common issues and how you can overcome them to prevent closing delays.
· Get Preapproved – Preapproval letters from your lender indicating that aspects of your finances, like your credit score and debt-to-income ratio, have already been checked. In other words, your lender has already performed their due diligence.
· Title Issues – You’re not restricted to performing a title search as part of the closing process. Many buyers may ask their realtors to initiate the process early to get ahead of everything.
· Appraisal – All lenders require an appraisal to be performed. Unfortunately, only the seller can speed up this part of the process by ordering an appraisal before listing their property for sale.
· Inspection – Order a home inspection before signing the purchasing agreement to reduce the risk of uncovering serious problems at the later stages.
All the preparation in the world won’t stop every closing delay. In addition, streamlined closing requires good faith from both sides. However, with these contingencies in place, you can get ahead on the closing process before you’ve even signed the contract of sale.
Can Cash Speed Up the Closing Process?
How long does closing on a house take if you decide to pay in cash?
Making a cash offer on a home can speed up the process. On average, a cash sale can take just one to two weeks to complete because you can skip both the appraisal and the mortgage underwriting, which make up the bulk of the closing steps.
Find Your Real Estate Expert Today
Avoiding closing snags is a priority for buyers and sellers alike. Defining how long does closing on a house take depends on how well-organized you are. Working with a high-quality realtor is invaluable in guiding you through the process from start to finish.
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