Closing On A House? Heres How Long It Takes
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Stephen Donaldson, a real estate attorney and founder of The Donaldson Law Firm in New York, breaks down approximately how long each step takes along the way. HomeLight’s Simple Sale platform provides cash offers for homes in almost any condition across the country. To get started, complete a brief questionnaire about your property and your selling goals, and we’ll provide an all-cash offer for your home within 24 hours with the ability to close in as little as 10 days. You need extra cash now, you’re relocating for a job, or a family member had a change in health — some scenarios such as these require sellers to move more nimbly than a 50-day closing timeline allows. If you are concerned about the process taking too long, consider the alternative of requesting a cash offer for your home. According to the loan software firm ICE Mortgage Technology, it took 50 days on average to close on a purchase loan for a house, as of February 2023.
Open escrow: 0 extra days (bundled into contract of sale)
You don’t even have to order title insurance or a home inspection, though you’d be foolish to skip those steps. All you have to do is transfer funds, legally change ownership and get the keys. Review your initial closing disclosure immediately, and compare it with your loan estimate to ensure you’re getting the deal your lender promised.
How Long From “Clear to Close” to Closing?
A cash sale can usually be turned over in a week to two weeks, as it allows you to skip the mortgage process and the appraisal, which are typically the two most time-consuming steps in the process. Of course, numerous factors can hasten or hinder the closing process. For example, buying with cash usually speeds up the process, but forgetting to buy homeowners insurance can slow it down. Still, while you can't control the timing of every aspect of the closing process, there are things you can do to reduce the risk of delays. Typically it takes 30 to 45 days to close on a house, depending on a few factors like how fast it takes to get a home inspection and whether or not you are pre-approved for a mortgage.
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Not only must you deal with red tape from the city, but your condo’s homeowner’s association (HOA) will also want to have its say. While every building is different, typically condo HOAs will restrict what you can do to the outside appearance of your condo and be less interested in what you do to the interior. It’s no secret that California’s Title 24 is complicated and ever-changing, but an experienced building professional will help guide you through the requirements.
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What are the buyer’s responsibilities during closing?
The 2021 national average for closing costs was $6,905, including transfer taxes, according to CoreLogic. Had the highest average closing costs at $29,888, while Missouri had the lowest at $2,061, according to the same report. These documents will include a final closing disclosure that should be identical to the initial closing disclosure you reviewed. The possible exception is that items, like prorated property taxes and insurance premiums, may have changed if your closing date was moved. After months of searching and having several offers rejected, you’re finally under contract.
Why Mortgage Pre-Approval Is a Good Idea
While you're scheduling an inspection and waiting on the appraisal, the lender contacts a title company to complete a title search. Making an offer is one of the most exciting parts of buying a home, but it's not the end of the line. You, the seller, and your mortgage lender still have to take several steps before you can close on the house and receive the keys. There’s a lot that has to happen in that 50-ish-day window of time between offer and closing.
A lender will want to take a close look at the buyer’s financial situation to fully approve their loan. It will also want to get the home appraised, conduct a title search and more — all of which take time. Buying a house isn’t just a transaction between the buyer and seller. To help you navigate the process, you may benefit from hiring a real estate attorney who can ensure the closing goes smoothly. This is usually optional, but having a lawyer on your side can help you avoid unexpected issues down the line. Closing on a house marks the beginning of a new chapter in your life.
Transfer The Home Title
This is a good time to ask your agent for referrals to a few good contractors, so you can schedule someone to take care of these issues immediately after closing and before you move in. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations. The escrow disclosure, detailing the charges that will be incorporated into your monthly payment for taxes and insurance.
Create a Checklist of What Needs to Happen Leading Up to Closing
The buyer typically has 5-15 business days to complete the inspection after they sign the contract. Once it’s on the schedule, the inspection itself should take only a few hours to perform, and the written report is usually ready to review the day after the inspection. Closing day is the final step in the home buying process, and it usually takes about one to two hours. You'll sign various legal documents, including the promissory note, mortgage note, escrow disclosure, and deed of trust. Mortgage underwriting is typically the most time-consuming step in the closing process, so it pays to start the mortgage process as soon as possible — and be sure to respond quickly to any lender requests. The underwriter verifies information about the property (via an appraisal) and evaluates your finances by examining your income, savings, assets, debts, and credit history.
Read each page thoroughly, and don’t be afraid to ask questions if something doesn’t add up. Before taking that last step, discuss the situation with your real estate agent and have them discuss the situation with the seller if you don’t want your purchase to fall through. You’ll need to negotiate a new closing date and you may have to compensate the seller for the inconvenience. If they’re not willing to work with you, you may lose your earnest money deposit, making the savings from changing lenders a wash. Closing costs are the fees and expenses you must pay before becoming the legal owner of a house, condo or townhome. You can expect to pay 2 to 5 percent of the mortgage loan in closing costs.
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The biggest risk is that the home you’re buying needs major and costly repairs that could have been discovered during the inspection. Before you choose to waive your inspection, be sure to consider the risks. Once your offer is accepted, there are still several steps to your closing process. You can save a lot of time during closing by choosing your lender, your loan type, and your home inspector in advance.
Your closing agent will file the signed deed of trust or mortgage note with your county recorder, documenting the new mortgage against the property. Use this calculator to estimate closing costs based on your home’s sale price and other purchase details. You may want your real estate agent to attend, as well as your attorney (if you use one for the home purchase). The seller may not attend, having handled their title transfer needs in a separate meeting. Homeowners insurance provides financial protection if the home is damaged by fire, severe weather, vandalism, or other incidents.
A real estate attorney or title company usually conducts the title search, which could uncover title defects such as unpaid property taxes, boundary/survey disputes, or pending lawsuits. You can opt to buy an owner's title insurance policy to protect against errors, omissions, or defects in the property's title. Issues uncovered in the title search can also delay a closing — or even potentially sink a deal.
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