On average, closing a real estate transaction takes about 30-45 days. It can take more or less time, depending on several factors such as inspection results, insurance matters, title and lien issues, and the buyer’s financial situation. To name a few.
Closing a real estate transaction is a lengthy process with many steps.
- Contract And Deposit: During this process, the Buyer and Seller will settle on an agreement for the price of the house, contingencies, and closing date. An Earnest Money is deposited per the contract. The signed purchase agreement or contract is then reviewed by the agent and their transaction coordinator (TC) for completion. To ensure the contract is fully-executed, TC ensures all required signatures are shown and pertinent information is completed before forwarding the documents to appropriate parties for processing.
- Open Escrow: This step is usually requested by the agent or TC. An escrow account is open, and the work begins to close the transaction as per the signed agreement.
- Inspection: This process takes 5 to 15 days. Depending on the type of loan the buyer is applying for, either the buyer or seller can order the inspection. A report of the inspection will be sent to the buyer for review. And, if necessary, both seller and buyer may negotiate for potential repairs.
- Appraisal: This part may not be necessary for a cash deal. However, the buyer’s lender requires that an appraisal is complete as part of the loan approval process. An appraisal takes between 5 to 7 days, or longer, depending on the type of loan the buyer is acquiring.
- Getting A Mortgage: Getting a mortgage can take 30-45 days. This step involves a lot of paperwork where the buyer completes the loan documents in detail, including updated credit reports. Traditionally, the buyer may have received a preliminary loan pre-approval letter. Once the purchase agreement is signed, the lender begins creating, reviewing, and processing the “loan commitment” paperwork.
- Title Clearance: The title clearance can take between 15 to 30 days. This step ensures that no one else can claim property after closing. This process involves reviewing the title report to ensure no outstanding liens, such as junior liens for second or third mortgages and HOA (Home Owner Association) liens against the property before closing. All liens must be paid and released at closing.
- Contingencies: All contingencies such as follow-up inspections and other agreed-upon requirements must be satisfied. A final walkthrough may be necessary to ensure all work has been done as agreed.
- Funding and Closing: The buyer’s lender communicates to escrow when the approved loan documents are available and ready for “clear-to-close.” Funds are released to escrow to be distributed to all parties involved. Escrow also handles scheduling both parties for signing, transferring of title, recording the new deed at the County, and funding the deal.
The entire process may take up to 45 days or longer. Some tasks such as appraisal must be a high priority to ensure the process is not disrupted. Escrow may begin working on the title and escrow issues concurrently with the lending process during the closing process.
When The Deal Must Close, Contact Us Today!