House closing timelines explained
Many things can be a mystery when you have never purchased a home. Sometimes the excitement of owning a home can be overwhelming.
It is not uncommon for buyers to want to close their homes as soon as possible. It leads to real estate agents being asked how long it takes to close on a house. We will review everything you need to know to understand a closing timeline.
Sometimes everything goes according to plan in a real estate transaction, and others don’t.
What is the average time needed to close a house?
The average time it takes to close a house can vary greatly depending on the buyers and sellers. Generally, it takes anywhere from 30 to 60 days from the time an offer is accepted until the closing date.
The closing timeline can be shorter or longer depending on the transaction’s complexity and any issues arising during the process.
The timeline begins with accepting an offer and ends with the closing date. During this time, the buyer and seller will work with their respective brokers, lenders, and real estate attorneys to ensure that all paperwork is completed promptly.
A process occurs, including the buyer conducting a home inspection, applying for their mortgage, having the home appraised, completing the title search, and planning for the closing.
The agreed-upon closing date is the final step in the process, where all the paperwork is signed, and ownership of the property is transferred to the buyer.
Home purchases can be complex, especially when things don’t go smoothly. Problems can arise, potentially delaying the closing if they are not fixed quickly.
When the parties work together and exceptional professionals are involved, issues usually work out.
What can delay a home closing?
A few things can delay the process of closing on a home.
One of the most common reasons for a delayed closing is when the buyer’s mortgage financing takes longer than expected to be approved or finalized. Sometimes, the lender may need more information or documentation before approving the loan.
Potential title issues can arise on the seller’s side that could delay the closing. These issues can include a lien on the property, an unpaid tax bill, or a title search that reveals a problem with the chain of ownership.
In these cases, the title company or real estate attorney must investigate the issue and work toward a resolution before the sale can be completed.
While nobody likes the thought of the closing date changes, buyers and sellers should always be prepared for the possibility.
How long does it take to close on a house with a cash sale?
When a buyer pays cash for a house, the closing process is typically much faster than when a buyer requires a mortgage.
Cash offers are usually attractive to sellers, as there is no need for a mortgage lender to approve the loan. It can save both parties time and money.
Generally, a cash sale can close as quickly as two weeks if the title search goes smoothly. The buyer’s attorney must still complete their title work to ensure no encumbrances against the property.
When purchasing with cash, the seller’s real estate agent will usually ask for proof of funds at the time of the offer in place of a mortgage pre-approval.
Buyers typically forgo the home inspection and due diligence process when they pay cash. If a home inspection was done and significant issues were discovered, it could extend the closing while these issues are worked through.
How long does it take to close on a new construction home?
Closing on a new construction home can take a few weeks to several months, depending on how far along the construction is when the buyer makes their offer.
If the home is complete when the offer is accepted, the closing timeline will usually be the same as that of an existing home. However, the timeline may be extended by several months if the home is still under construction.
In this case, the buyer and seller agree on a completion date for the home. Once the home has been finished, the closing process will happen like any other transaction.
A buyer will conduct a walkthrough and generate a punch list of any last-minute things the builder needs to complete or fix.
If any significant uncompleted items exist, the buyer’s lender may ask for money to be held out to ensure completion.
Final thoughts on closing timeframes
The time it takes to close a home is always negotiable between the buyer and seller. Sometimes a closing date will be extended longer than usual. For example, if a seller agrees to allow a buyer to have a home sale contingency, it could take much longer.
The seller would be at the buyer’s mercy to find a buyer to purchase their home. It is one of the reasons a home sale contingency is frowned upon by most real estate agents.
Buyers and sellers should always carefully think about what closing date is best. Once the parties agree to a date and sign a contract, the date cannot be changed without both parties agreeing.