What’s the average time to close a house?
The most common people always ask once a house has been finalized is, how long does it take to close on a home? This question first requires an understanding of what exactly closing a house entails.
The closing process on a home purchase can take anywhere from a week to 60 days, depending on the property type, whether or not you’re buying with a mortgage and what kind of loan you’re taking out. The closing process includes two distinct periods:
- Escrow is the period between when you and the seller sign the contract and the day you close.
- The closing day is the day you sign all the paperwork, get the keys and become the official owner of a home.
At closing, you’ll carefully review and then sign all of the legal documents required for the lender to issue a mortgage and transfer the ownership of the property to you. The loan proceeds equal to the purchase price will also be distributed to the seller.
Closing paperwork for the buyer includes:
- The promissory note, committing you (promissory = promise) to repay the loan.
- The mortgage, giving the lender the right to foreclose on the property if you don’t pay. (It might also be called the Deed of Trust or security instrument.)
- The escrow disclosure, detailing the charges that will be incorporated into your monthly payment for taxes and insurance.
- A right-to-cancel form which allows you three business days to call off the whole deal. There will also be a generous pile of disclosures, disclaimers and government-mandated documents to read and sign.
What’s the average time to close a house?
Submission of the mortgage application to the actual closing day takes about 30 to 45 days. With electronic data gathering and increasing competition, lenders are reducing this time frame. However, for the 12 months ending July 2019, the average was 43 days to close a loan on a purchase.
The closing itself refers to the reviewing and signing all of the loan documents which happens at a much faster rate than the application. If your loan settlement, or closing, is happening at a table with all parties gathered together, figure on at least an hour or so. There are also mobile, mail and online closings, which can be much faster — or a great deal slower.
But that’s only after at least a month of passing the ball—to the buyer, their mortgage lender, the escrow company, the title company, the home inspector, the appraiser—back and forth until you lock all the details in place.
Yet any hiccup or even a slow response could throw you off your projected close date. With the help of top real estate agents who are master communicators and extraordinary negotiators during the closing, we broke down the timeline of the closing process, so you can better predict your close date and keep the process moving quickly when the ball comes to you.
Your average timeline for closing depends on the kind of closing process you have opted for. We have compiled a list of the average time it takes to close a house for each process, so you can check which one is yours to gauge an idea of how long it will take for your closing process to be finalized. Here are the different scenarios along with their average closing times, one of which you have opted for:
- Application takes one day
- A Disclosure can take up to 3 days for disclosure delivery as it requires additional time for review and completion
- Appraisal requires 1-2 weeks for completion. Assuming there are no issues with your appraisal, the lender will send the “clear to close” about a week before the agreed-upon closing date. If you’ve requested a more extended escrow period and later closing date, you may get your “clear to close” well in advance of your closing date.
- Documentation requires a few days to weeks depending on review times and availability of information requested.
- Conditional Approval can take up to 1 to 2 weeks because of additional underwriting review and clearing of conditions
- Underwriting will take you around 1 to 3 days for initial review
- Cleared to Close refers to a 3-day mandated minimum for acknowledging Closing Disclosure
- Finally, Closing and Funding, which takes an estimated 1 to 3 days to receive and review signed loan documents and disburse the required funds.
How long does closing day take?
Closing day — that is, the day you go to the closing agent and sign your final paperwork to buy the home — 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 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 agent or attorney to be present as well. In closing attorney states, the attorney may enable the closing appointment. Be sure to bring your ID, a cashier’s check, proof of insurance and your purchase and sale contract.
Buyers usually must attend this meeting in person, whereas sellers can sometimes sign their paperwork ahead of time.
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