Buying a house is exciting, but it can sometimes feel like the snap of your fingers or maybe even like it takes forever to get from the offer to the closing table.
On average, it takes 30 – 45 days to close on a home, and that’s in a perfect situation. Sometimes you may close faster or slower, but keep 30 – 45 days in mind when signing a sales contract.
Here’s a quick rundown of the typical timeline of closing on a home, from a buyer's perspective on the loan component:
Start the process by getting pre-approved for a mortgage loan with a lender. This tells you how much you can afford, on what terms and the conditions you must satisfy.
A pre-approval letter also gets your foot in more doors with sellers. Most sellers only want to work with pre-approved buyers so they know you're serious and there is less likely a chance of loan issues arising during escrow, that can put the deal at risk.
Find a Home
Once pre-approved, you can look at homes with your realtor. Pre-approvals usually last 30 – 60 days, so it works best if you can find a home within that time. However, it is very easy to update your loan pre approval if it expires. One you tour homes with your realtor and are interested in submitting an offer on it, to the seller, the buyer will sign sign a sales contract which the seller can agree to or you begin negotiating the price and terms.
Once both parties agree to terms, and the sales contract is mutually executed, this starts the "open escrow" clock.
Submit your Contract and Order the Title and Appraisal
After signing a the sales contract (aka your offer to purchase), you’ll submit your sales contract to the loan underwriter, a title search of the home is ordered, a home inspection, as well as an appraisal on the property. In the meantime, you’ll provide any missing documentation or updates the lender needs to finish underwriting your qualifying factors.
Get the Clear to Close
Your goal in underwriting is to get the clear to close. This happens after the appraisal, title search, and your qualifying factors pass the underwriter’s requirements. Then, with the clear to close, you’re ready to head to the closing table.
Receive your Closing Disclosure
Lenders must send you the Closing Disclosure, before the closing, typically three business days before you close. This allows you time to review your loan terms, costs, and interest rate to ensure everything looks how the lender initially promised.
If everything looks good, you get your cashier’s check or bank wire to close the loan and get ready to become a homeowner.
Closing the Loan
The last step is to close the loan. You’ll attend the closing with your title escrow contact, your realtor, your lender, and possible the sellers. You’ll sign documents and disclosures, exchange funds, and receive the keys to your new home.
Typically it takes 30 to 45 days to close on a house, but there can be delays. The key to avoiding them is to get pre-approved for your loan and satisfy any conditions the underwriter needs. Once you find a house, the only conditions you’ll have to focus on are those about the house, many of which are outside your control.