How Long Does it Take to Close on a Home?
If you’re ready to buy your first home, it’s best that you know the process before diving in.
First things first, the best thing to do is sit down one-on-one with your trusted real estate professional and go over the market in your neighborhood, any seller contingencies of the homes you’re interested in, and your mortgage pre-approval. What does this conversation do for you? It will put you in position to be a strong buyer on the market and close quickly on the home of your dreams.
Every home sale is different, and the period it takes for a sale to close can depend on both the buyer and the seller. Generally, if you are purchasing a short sale of foreclosure, the closing date may be extended due to the fact that the home is owned by a large bank and needs several moving parts to come together to finally close. On the other hand, if you’re interested in purchasing a home that is listed by an agent or is FBSO, the sale can take as little as a few days if everyone is prepared less any contingencies.
As you guessed, the most common reason for a delayed closing is related to buyer financing. The leading issue: getting a loan approved. Buyers who obtain a pre-approval letter are able to avoid this time drain and move forward with a quicker close. Remember that larger banks can hold up approvals and sales due to their internal process as a mortgage may begin with one person and end with another who could be located hundreds of miles away. It is recommended, especially when purchasing your first home that you go with a smaller or local mortgage-only lender. Cash buyers are generally the buyers who can get a sale to close within days because they avoid the entire mortgage process and greatly appeal to home sellers.
Another major clause that can slow down a sale is contingencies. Contingencies occur when a buyer needs to sell their existing home and/or a seller needs to buy a new home. Because of these contingencies, the expected closing date can be further out than previously expected during the time of offer (although many agents will let their clients know of contingencies before an offer is placed).
Remember that before you find your new home it would be in your best interest to have your pre-approval letter ready from a local lender, your previous home sold or your rental lease close to end, and a trusted real estate professional at your side to help the home sale close without a hitch from your end as the seller.