What happens during the home closing process and what does that mean to you as a buyer or seller?
First of all, how long does the closing process actually take? Unless a home is being purchased with cash, it takes an average of 30 to 40 days to close. If a home is being bought with cash, then the closing process may happen much faster.
Ultimately, the lender will dictate how quickly the transaction will close. It’s essential that a buyer is pre-approved before they make an offer to a seller. A pre-approval does a couple of things. First, as a buyer, it strengthens your offer. The pre-approval shows that a lender has checked your credit report, verified your employment, and looked at your bank accounts. From the seller’s perspective, accepting a pre-qualified offer gives you more security and peace of mind because the buyer is more likely to close.
You should also know that real estate closings are usually handled by a real estate attorney. Before a house can close, all of the terms of the agreement have to be met. What does that mean? In a purchase contract, you may have a due diligence period, a home inspection, a termite inspection, or other obligations that need to be met before you can close on the house. If there are any lender-required repairs or negotiated repairs after the inspection, those must be completed before you close on the home.
The due diligence period is basically a window of time that allows the buyer to confirm that they want to move forward with the purchase of the house. During this time, all of the terms will be negotiated before you move forward with closing.
Now, there can be delays during the closing process. For example, if the buyer incurs new debt or the appraisal comes in low, then closing will be delayed. If a lien or judgment on the title is discovered, that can also delay closing. A delay in closing must be agreed upon by the buyer and the seller before you can move forward with the closing.
If you have any questions about this topic or have another topic in mind you’d like to see us discuss in a future video, feel free to reach out to us. We’d be glad to help.