You’ve turned on (and hopefully off) at least 20 water faucets and peered into about 50 closets (oh, the things you’ve seen!). And now, at long last, you’ve found the perfect home. So you make an offer, which is accepted. Congrats. Now, exactly how long does it take to close on a house?
Read on to get the gist of your closing timeline, plus what can slow things down—or speed things up.
Average home closing time frame
One recent study found that closing times are getting longer—on average it now takes 50 days. And while that may seem like an eternity to eager buyers or sellers, there’s good reason this doesn’t happen lickety-split. For one, buyers who require mortgages must finish the loan process and property appraisal.
Home buyers should also use this time to complete their due diligence by reviewing the property title and completing a home inspection, says Todd Huettner of Huettner Capitol. This chunk of time also gives both the seller and buyer time to plan their move.
What can slow down a closing?
Even though a property is under contract, the occasional hitch can make closing time go from warp speed to a ultra-slo-mo. Here are the typical hiccups.
Funds: Yes, you guessed it. The most common reason for a delayed closing is usually related to buyer financing, says Jerry Koller of California’s International Home. The leading issue: getting a loan approved. Buyers can avoid this time drain by obtaining a mortgage pre-approval letter, something many sellers require along with an offer. And remember, even with a pre-approval, it can take 30 days for the lender to complete its due diligence once an offer is made, so plan accordingly. Cash buyers save a significant amount of time by avoiding the mortgage process.
Appraisal disparities: In order for a mortgage to be approved, the bank needs to appraise the home. But if the appraisal comes in low, it will take time to renegotiate the price.
No insurance: Failing to secure homeowners insurance until the last minute slows down a closing since it’s often required before you move in, says Paul Moore, a real estate agent and broker in Virginia.
Contingencies: “If a buyer needs to sell their existing home and/or a seller needs to buy a new home, this could also delay the expected closing date,” says Colin T. McDonald at Re/Max Capital in Albany, NY.
How to speed up a closing
If you want to ensure your closing reaches the finish line in record time, here are things you can do to help.
Resolve title issues: Sellers should resolve any problems—such as a tax lien—regarding the title to the property, says Susan Naftulin, president of Rehab Financial Group. Provide the title company with copies of the satisfactions before the title search to avoid any red flags. If you haven’t satisfied the lien, informing the title company that you want it paid out of closing proceeds will keep the process moving along.
Address repairs: A home inspection usually generates a laundry list of repairs that need to be resolved before closing. While sellers can make the repairs, in general it’s much faster for them to just reduce the price or give the buyers a tax credit so they can make their repairs on their own time.
Communicate: Jack Matos, director of escrow operations at Palatine, IL–based Proper Title, says buyers with questions about the closing documents or walk-through concerns need to immediately inform their Realtor® or attorneys. “Any significant changes at this late hour will require new forms and review periods,” he says. All that said, don’t feel pressured to just rush through things without fully understanding them. When in doubt, don’t be afraid to take a breather and discuss whatever’s nagging you until you’re confident you can sign on the dotted line.