Buying or selling a new home? The offer has been accepted, the open house is over, and in this moment you’re likely wondering, “Now what?”, “What exactly happens next?” or “How long does it take to close on a house?”. If so, you’re not alone.
Chances are the buyer isn’t paying in full in cash. As a result, the loan officer who works with the buyer will have a significant impact on how long the process takes, and dictate the amount of time it takes to close on a home.
Keep in mind – not all loan officers are created equal. Therefore, the value of a lender, who responds quickly, has a major impact at how long the process of closing takes.
Let’s examine what this is, and how long it takes.
Closing on a house refers to the process of getting from an accepted offer to legally transferring ownership. Typically, all of these final documents are signed and completed at the title company, and this is seen as the last stage in the process of buying/selling a home. The date of which this final transfer of ownership occurs is decided upon by the seller and buyer.
Feeling overwhelmed by piles of paperwork?
Not anymore. Transactly Coordinators handle 90% of closing tasks.
Regardless of if you’re buying a house or selling a house, there are a number of key players involved in process of closing on a home, and they all play a vital role.
They include: closing agent (real estate lawyer, title company, or escrow officer), seller, listing agent, buyer, buyer’s agent, mortgage lender, home inspector, and appraiser.
Since there are a number of different parties involved, they likely aren’t giving their time for free. If you’re buying, did you ask your agent if you qualify for a buyer agent commission rebate?
The day of closing you can expect to spend 60-90 minutes sitting down signing all the final pages of the paperwork. However, the time that it takes to get to the closing table – varies wildly.
1 day? 30 days? 3 months? Well, that depends where you live.
According to the REALTORS® Confidence Index Survey, 46 days is the average amount of time properties are on the market. Let’s say you list your property on April 1st, on average, by May 16th you could officially be finished. Live in Kansas? It could be as low as 31 days. However, if you live in North Dakota, this could be up to 165 days.
It’s possible that finding a home, getting it under contract, and closing can happen all within 30 days, it’s been done before. Is the buyer paying in cash? This could happen in as little as 14 days.
Ultimately, there is a lot of differing information out there about how long exactly this process takes. The reason for this is because there are multiple factors that influence why the official number of days to close might be different. But, what are some of those factors?
Real Estate consultant, Karin Carr, suggests that there are 4 questions to ask that influence how long it takes to close on a house.
The previously mentioned REALTORS® Confidence Index Survey state, “The biggest problem impacting a delay on the closing of a home is an “issue related to obtaining financing.” In fact, this impacts 40% of all closing delays.
This begs the question – Is the buyer pre-approved or just pre-qualified? Pre-approved buyers have a much higher likelihood to close more quickly. Loan officers need to double and triple check the buyer’s ability to pay something back before they sign a contract with them. The process of lenders doing their homework takes longer when someone is a greater financial risk. Before you walk in the door, are you aware how to reduce closing costs?
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After you accept an offer in writing, earnest money is deposited, and the “Escrow/Closing” period officially begins. “Escrow/Closing” officially ends after the final signatures on closing day.
Now a lot can happens in between those two key events, with a wide ranging timeline, so how can you best prepare? Ask yourself the following 10 questions.
Congratulations! You’ve now traded the keys for money, and you got what you wanted.