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How Long Does It Take to Close on a Property?

Updated: Aug 13, 2021

As mentioned in our previous blogs, closing can be a long process, it takes time. It sounds easy when you get that contract accepted, but it can get very complex when the documents are due or the verification process has to happen. Like flipping houses, closing on a home is not always smooth sailing. Regardless if you are already clear to close, abrupt circumstances can arise and string out the closing process.


Additionally, the average time to close varies on the loan types or how the buyer will purchase the property. Let's dwell on the latter… Buyers are capable of purchasing either via cash or mortgage. Hence, let's go through each point.


Time to Close via Cash

Needless to say, when you purchase a house and pay in cash, the closing time is much faster than getting financed. For one, you'll get rid of the mortgage application and approval process. You won't have to go through each step of how a typical closing goes; you only have to make your funds ready, transfer them, legally change ownership, take the keys, and voila, you can now move in!


Time to Close on a Mortgage

Meanwhile, closing on a property is quite long if you opt to purchase on a mortgage. Typically, it takes 30-60 days, way longer than the days spent when you pay in cash. However, closing time varies on the types of mortgage loans. Generally, the government-backed mortgage takes longer than conventional loans. Moreover, apart from the average time to close, several factors associated with the market conditions also affect the process relative to the mortgage. Thus, taking more time to close than expected.


Furthermore, apart from the two given methods of acquiring a property, having a better understanding of the closing process will save you from agony. To get you in the loop, here are a step-by-step house closing process:


Application (1 day)

Everything starts with an application. With real estate, before you acquire a property (mortgage), part of the pre-approval process is to submit an application that typically takes 1 day. You will be asked to provide verifiable information to support your application, thus, to steer clear from a longer process, make sure to keep an eye on all details as omissions will cause delays.


Disclosure (under 1 week)

This part of the process is completed by the lender that typically takes a few days. And an accurate breakdown of the monthly payments, fees, and other closing costs must support the loan terms.


Documentation (under 1 week)

This step is highly dependent on how you comply with what your lender will need from you. To expedite the process, you will need to provide your lender with accurate information regarding your income and assets. Therefore, establishing good communication and transparency will save you from uphill work as your lender will guide you in accomplishing the required documents.


Appraisal (1 – 2 weeks)

Part of acquiring a property is assessing its value. And your lender is responsible for requesting the appraisal of the property.


Underwriting (1 – 3 days)

All documents are subject to evaluation.


Conditional approval (1 – 2 weeks)

This phase technically will require additional documentation even after going through the underwriting stage. To help you with these documents, you will have to communicate with your lender and have them ready to move forward.


Cleared to close (3 days)

Prior to the closing date, you have to review all documents before signing to ensure that all information is accurate in compliance with the terms and guidelines. You will be given enough time to go through each document after receiving your final clearance and disclosure.


Closing and funding (1 day)

On the closing day, it will only get you an hour or so to tie up loose ends. All you need to do during this phase is to sign all the legal documents.


Summary

The above-mentioned steps and guidelines are the standard closing process. Situationally, the process varies from factor to factor. The bottom line here is that closings are out of control regardless if you already set the final date or not; the process may slow down the transaction depending on some unanticipated conditions.


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