Closing on a Home

Buying a house is exciting, but it can take a while, or a very short time in some markets, to get from the offer to the closing table.

On average, it takes 30 – 45 days to get to the closing table, and that is in a perfect situation. Sometimes you may close faster or slower, but keep 30 – 45 days in mind when signing a sales contract.

The Process to Close on a House

The house closing process is complex. Not only must you find the house you want to buy and have the seller agree to sell you the home, but you must sort out your financing. Here’s a quick rundown of the typical timeline.

• Find an Agent

You will want to find a reputable buyer’s agent who can help you through the buying process. Talk to friends and family about who they used and check out reviews online. You will want to find someone who knows the market, has recent sales, and has a personality that you can mesh with. This is a big decision and you want to make sure that you trust the person by your side.

• Get Pre-Approved

Start the process by getting pre-approved with a lender. This tells you how much you can afford and what terms and conditions you must satisfy for the lender to actually give you the funds.

A pre-approval letter also gets your foot in the door with more sellers. It’s important to note that most sellers only want to work with pre-approved buyers.

*In competitive markets it is a great idea to get pre-underwritten. This means the lender has actually reviewed all of your documentation BEFORE you get an offer accepted. This way you can get past any hurdles that might come up before you have your dream home on the line.

• Find a Home

Once you have an agent and are pre-approved, you can look at homes. Pre-approvals usually last 30 – 60 days, so it works best if you can find a home within that time, but sometimes it takes longer and that is just fine!

Once you locate a home that you would want to live in, you’ll sign a sales contract and negotiate the price and terms with the help of your real estate agent and lender. The sales contract starts the clock, which is why getting pre-approved is essential. After that, you’ll have the majority of your personal underwriting review completed.

• Submit your Contract and Order the Title and Appraisal

After the seller accepts your offer and signs your purchase contract, you’ll submit a copy of your sales contract to the underwriter, and they’ll order an appraisal on the property. Your agent will also submit the contract to the Title company so they can order the preliminary title report which shows what liens are currently being held against the property.

While this happens, you’ll provide any missing documentation or updates the lender needs to finish underwriting your loan.

• 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, send the remainder of your down payment and sign your closing documents.

• Receive your Closing Disclosure

Lenders must send you the Closing Disclosure before the closing. By law, they must send it at least three business days before you close (Saturday counts, but not Sunday). 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 at the Title and Escrow Company with your closing agent, or a mobile notary will be sent to your home to complete the signing there. You’ll sign documents and disclosures, exchange funds, and receive the keys to your new home.

• Recording

Once you and the seller have both signed your closing documents, you have wired your final funds for the downpayment and closing costs, and the lender has sent their funds for your loan to the escrow company, the Title company will release it to record. This means the city will officially recognize the transfer of the home from the seller to you and you can get the keys to your new home!

As you can see there are a lot of steps to take from touring a home to officially getting your keys. So it is important to choose the right team of agents and loan officers to help you along the way. We are here to help answer any of your questions so don’t be afraid to reach out! :)

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