Congratulations! You’ve made it through the gauntlet of searching for a house through submitting a successful offer for the house you love. But you still need to make it down the home stretch to the close date.
So how long does it take to finish the closing process? The number of days to close can be anything from a week to 60 days, depending on a number of factors we’ll describe below.
Closing process timeline
After you’ve made an offer on a home and both you and the seller have agreed on terms, contingencies and executed the contract, you’re now in escrow. Here are the steps that are usually part of the home buyer process, and how long each step usually takes. Naturally, all of this can vary depending on where you live and the circumstances around the sale.
- Execute the contract and confirm closing date – You’ve put forth an offer on a house, and the seller has accepted that offer in written form. But that’s typically just the beginning of negotiations for the home sale.
There are often contingencies from both the seller and the buyer that must be met and completed to both sides’ satisfaction or compromised on. All of these contingencies (like certain repairs) must be met before the sale is finalized.
- Open the escrow account (a few days) – Once an offer is made on a home and contingencies are agreed on, a buyer typically writes a check for earnest money that is placed in escrow. This means that the earnest money doesn’t go directly to the seller and is held by an independent third party until the deal is closed. No one can touch the money as it’s in escrow.
In this situation, escrow is important because it protects both parties in the transaction. If you put down the earnest money and it went directly to the seller, a seller could keep your earnest money if an agreement wasn’t made. Additionally, you wouldn’t want to hand over money for the purchase of a property until a deed is signed. Escrow ensures everyone gets what they deserve at the correct time.
- Complete inspection and repair requests (1-2 weeks) – A home inspection is your chance to have an expert look over the home with a fine-toothed comb to identify any maintenance issues with the home. Inspection is typically followed by a negotiation: the buyer will object to items found during the inspection, and the two parties will negotiate on resolutions. Inspection resolutions typically consist of financial concessions or agreements to complete the repairs before closing.
- Mortgage application and underwriting (5-20 days) – Since you’ve been pre-approved already, underwriting is part of the mortgage process in which a lender verifies your financial picture by looking at your credit report, income, debt to income ratio, assets, and liabilities before approving your mortgage loan application.
The underwriting process will take place after the down payment of the home has been made. It is a way for lenders to analyze the risk of giving you a home loan with more detail.
- Get loan approval (1 day) – If necessary and you’re not paying with cash. Most of the time, delayed closings are related to finalizing your mortgage. This can be anything from appraisal concerns to missing financial documentation to an inexperienced loan officer working with your mortgage lender.
- Appraisal (1-2 weeks) – The appraisal is the lender’s chance to evaluate the home. An appraiser assesses the value of the home to make sure the buyer and their lender are making a wise financial choice.
If the appraisal comes in low (meaning the appraiser thinks it is worth less than the purchase price), the buyer and seller will need to work together to figure out how to cover the difference between the two prices.
- Acquire homeowner’s insurance and title insurance (1 day) – Your homeowners insurance premiums are included in your monthly home loan payment. The portion that is sent to the insurance company is held in a separate escrow account. This is helpful because it’s one less bill that you have to worry about and guarantees that there is always insurance coverage in the event something happens.
A title company executes a title search to make sure that the title to your home is legitimate, there are no existing liens or other title issues, against the house and then issues title insurance for that house. Since the home and the land it’s on have likely changed hands several times, it’s possible that somewhere along the way, something went wrong. Title insurance protects the lender and the new owner against lawsuits or claims against the property that result from disputes over the title in a real estate transaction.
- Do a final walk through (1 day) – Right before closing, you’ll do a final walk-through of the property with your real estate agent. If the home isn’t in the same condition (or a better condition, if you negotiated repairs early on) than when you made your offer, you may delay closing until issues can be resolved.
- Attend your closing appointment and close on your new home (1 days) – The finish line has been reached! This typically takes between 1.5-2 hours if everything goes smoothly, but you’ll want to leave ample time in your schedule in case it takes longer.
During your closing appointment you’ll sign documents (a list of typical documents is below) and pay your down payment. Your lender will also wire the balance of the sale price at this time. The title or escrow agent will facilitate the closing appointment, but you’ll want your real estate agent to be present as well.