Closing – It is perhaps the least understood aspect of the home buying and selling process. Many people get frustrated at the entire process because, quite honestly, there’s no standard as to how long closing on a house can take.

There are so many factors that go into it from home appraisals and inspections to loan underwriting and title inspection delays.

An experienced real estate agent has been through hundreds of closings and can walk a buyer or seller through the process, but it can certainly be an anxiety-filled journey for most.

Hopefully, after reading this article you’ll have a better understanding of the process so you’ll be prepared for the inevitable delays that come with closing on a property

How Long Does it Take to Close on a Property?

Short answer: anywhere from 30 to 60 days.

Why so much variability? Well, there are a lot of factors to take into consideration. For example, during the busy seasons (spring and summertime), closings tend to take a bit longer than average due to high volume.

Conversely, if you’re closing during the wintertime when things are a bi quieter, assuming everything goes smoothly you may close in as little as 30 days.

The source of delays can be innumerable. As a buyer, maybe you spent countless hours viewing homes with your real estate agent and finally had an offer accepted. Great, you’re thinking, I can finally relax! Not so fast.

Maybe your lender keeps on requesting additional documentation during the underwriting process, which can lead to delays in securing your mortgage.

As a seller, you may have spent months preparing your home for a sale only to learn that perhaps there are some costly and unexpected repairs needed after the home inspection. Maybe the offer needs to be renegotiated to cover the cost of those repairs.

Coordinating the schedules of lawyers, title companies, agents, appraisers and home inspectors is time consuming and can lead to delays if you’re not working with an experienced agent who can help you navigate this process.

As reported by Ellie Mae the average time to close on a propoerty takes 47 days, but again, this time period varies according to many of the aforementioned factors.

What are some of the most common sources of delay when closing?

Mother Nature

Obvious one here, right? If there’s a snow storm, hurricane, earthquake, tornado or other natural disaster, then there could be a considerable delay. If there’s been some damage to the property, then things may be even worse as there may have to be another inspection or appraisal, delaying things even further.

Appraisals

Speaking of appraisals, these are probably the worst offenders when it comes to closing delays. In most cases, people will rely on a loan from the bank, in the form of a traditional mortgage.

The bank (lender) will want an appraisal done to ensure that the purchase price is in line with the appraisal. This is to ensure that that if the borrower should ever default on the loan, the bank can recoup their money by auctioning off the house at a fair market appraised value.

Inspections

Yet another offender when it comes to closing delays. Inspections are a necessary evil as they protect the buyer from buying the equivalent of a lemon in car terms. Obviously a piece of property is a far bigger investment so the consequences of buying a house that has major repair issues are far greater.

But the seller can do a pre listing inspection to ensure that everything is up to snuff. A seller should inspect the foundation, floors, check for mold, leaks in the roof, inspect the HVAC systems etc…This will ensure that there are no surprises when the buyer orders a home inspection.

If major repairs are found in a home inspection, the parties may have to renegotiate the terms of the sale, leading to even more delays.

Home Owners Association Approvals

Buying a condo or coop. There could be even more delays. Though a lender may approve you, you may have to be approved by the board or association of the coop or condo.

Coops often don’t even have to let you know when or why they approve or deny you, which can often be a stressful (and annoying) part of the buying process.

Title

The title and deed are documents that prove ownership of a piece of property. It is therefore extremely important that titles are inspected and verified with a fined tooth comb – which is part of the reason why title insurance is required.

In short, inspecting issues associated with titles such as broken chains of title, liens, and code violations takes time and can lead to even more closing delays.

Lender & Mortgage Approval

Finally, if you’re a buyer, don’t fumble at the goal line! You’ve taken the time to get pre approved and the bank is going through their underwriting process to officially approve your loan.

Now is not the time to max out your credit card, buy a new car, change jobs or do anything to hurt your credit score or drastically affect your financial situation.

Want to buy that new car or changes jobs? Wait! In many cases, waiting 30-60 days until after closing is the best option for most people.

Conclusion

The key thing to remember is to plan everything well ahead of time. If a lender, inspector or appraiser says it will take 30 fays to close, give yourself 45 days. Just in case.

Missing the closing date isn’t ideal but you can always renegotiate and change the terms of the contract to adjust to the new date.

However, the key is to have everything done in advance so that you don’t have to as this may require a buyer to forfeit the down payment or a seller to back out of the deal. No one wants that outcome.

An experienced realtor who has been through hundreds of closings and can help you navigate the inevitable issues that may arise during the closing process.

Contact one of our partner realtors today to ensure that your closing goes smoothly and you get the keys to your new home right on time!