Don’t be tempted to skip steps—it could cost you A real estate deal is generally a long and stressful exercise that involves many steps and procedural formalities. Closing on a house occurs when you sign the papers that make the house yours, but before that fateful day arrives, a long list of things has to happen. 💖💯
How Long Does It Take to Close on a Home?
Once a seller accepts a buyer’s offer, the closing process begins, and it ends on closing day when the property changes ownership. This process usually takes 30 to 60 days to complete, if the buyer is taking out a mortgage on the property. If the buyer is paying cash (no loan needed), the closing process can be condensed to one or two weeks.
From offer acceptance to closing, expect to complete the following:
Set a closing date: Once you’ve negotiated a price and contingencies, the buyer typically chooses a closing date. Usually, it will be at least 30 days in advance.
Open an escrow account: An escrow account is a savings account set up by your lender to hold any earnest money paid up front by the buyer. This fund can go toward closing costs, down payment, insurance premiums, or taxes.
Title search: Performed by the buyer’s attorney or a title company, a title search is a check into public records to make sure the property is free from any “defects,” like competing ownership claims, tax liens, or other judgments. The property title must be clean of all liens and claims to move forward with the transaction.
Mortgage application, underwriting, and loan approval: A step taken by the buyer and lender. The buyer provides documentation of financials, such as pay stubs, bank statements, and proof of assets. The bank will perform the official credit check and determine if you meet their loan standards. This process can take the most time. Getting a mortgage preapproval expedites it.
Appraisal: Your lender will require an appraisal to determine the property’s value and identify necessary repairs.
Home inspection: Typically optional, but a good idea. It will give you a better idea of the condition of the home and identify potential issues before closing. The seller could also do an inspection before the home is listed.
Final walk-through: The final walk-through is usually done with a real estate agent, and it’s your chance to make sure everything is as you expected. Because of social distancing guidelines, virtual home tours have become more popular for buyers, and Phillips has had cases where the final walk-through was the first time the purchaser set foot in the new home.
Closing appointment: The final step. This is where all the paperwork gets signed and the money changes hands.