The Home Closing Process & How Long It Takes

theproagentHome Buying Tips

You’ve just bought a home, congratulations! But now comes the hard part, waiting for the closing day so you can officially move in. If you’re a first time home buyer, it’s good to be aware of the steps that need to be completed in the home closing process to make sure everything’s above board.

Here’s a rundown of what you need to know and what can cause delays. The important thing is to stay calm throughout this process!

How Long Does it Take to Close on a Home?

After finding the home of your dreams and weeks of negotiations with the seller, all you want to do is get the keys to your new home so you can move in. However, since buying a house is a legal transaction, you’ll need to hold tight until all the following steps are completed:

Step 1 - Starting the process

Once you’ve made an offer and the seller accepts it, the purchase agreement is signed by both parties. The purchase agreement is delivered to the title or escrow company along with an earnest money check to be held in escrow. Earnest money is a deposit that is a sign of good faith you mean business.

Your file starts to be processed. Orders are opened for a title search, along with other information needed such as property tax, inspections/reports, homeowner/maintenance fees, insurances and other legal papers.

Step 2 - Title search and examination

The title company will search the public records for the deed to the property. They’ll search other records as well to make sure that there are no issues, like bankruptcy or court debts, that will prevent a clear transfer of the property to its new owner. Any problems need to be resolved before closing day. A report is compiled and sent to you, the seller and any other parties involved.

Step 3 - Preparation of documents and seller’s requests

Your lender will submit instructions to the closer for the legal documents required to the process your loan. The closer will review these requirements, as well as instructions from other parties, and make a list of the costs and charges owing. Once your loan documentation is signed off by the lender’s underwriter, and your mortgage is approved, they’ll schedule the closing date and inform all parties.

Step 4 - Closing the transaction

You, the buyer, your real estate agents and attorneys attend a closing day meeting at a set location, date and time. Closing is where you hand over your cashier’s check to close the deal and sign all the loan and closing documents. You’ll then receive your keys from the seller’s agent.

Step 5 - Post-closing

After the closing day, your closer will arrange payment for any prior lenders and any other parties who haven’t been paid, such as home inspectors or insurance companies. They’ll complete the documents for recording the transaction in the county where your property is located, as well prepare and send you and your lender the title insurance policies.

What Can Hold Up the Process?

Delays can occur at any point in the process, but most commonly these are experienced with home inspections, issues with repairs and hold-ups with the buyer’s lender. Even if buyer and seller agree to an earlier closing date if the lender isn’t ready to approve the loan, then the closing day will have to be rescheduled.

If you have a preapproved mortgage, this can speed up the process and help you close sooner. Special first time home buyer programs may also take longer as they require more than one underwriting process.

In general, you should expect the home closing process from signing the purchase agreement, to closing day to take 30 to 60 days.