From Real Estate Contract to Loan Closing – How Long Does it Take?
So, you’ve found the house of your dreams. You’ve worked hard to save up, you’ve already gotten preapproved for credit on your home loan, and you’re anxious to move in. But how long does the entire process take – from the moment you sign the real estate contract to loan closing?
It’s important to note that depending on the state that you live in, the steps may be in a slightly different order.
Step 1: Get a Home Inspection
Many real estate purchase offers contain contingencies on the condition of the home and the outcome of a home inspection. This objective assessment of the house will give you a chance to renegotiate the contract or walk away without penalty if the inspection shows significant issues.
Both the buyer and seller get the report. You may ask the seller to fix anything on the property before closing on the purchase.
While the actual home inspection may take only a few hours, it may take a few days to schedule the inspection as well as a few more days to receive the report.
Step 2: Secure Your Loan
Before looking at homes, a well-prepared homebuyer has already made contact with a lender to receive their preapproval or their Loan Estimate form. At this point, you want your lender to start processing the loan with your real estate contract in hand.
Take a day to visit your lender so they can begin the underwriting process to officially approve or deny your loan application. You’ll need to bring all relevant documents, such as proof of income, tax returns, as well as statements of assets and debts.
Step 3: Get a Home Appraisal
Part of the underwriting process involves a home appraisal. An independent appraiser will provide an objective estimate of the value of the house. It tells the lender that you are a receiving a fair market price, and the lender knows exactly what kind of property they are investing in.
Similar to a home inspection, the appraisal itself may take a few minutes to several hours, depending on the size and complexity of the property. However, it may take a few days to arrange the appraisal visit as well as a few days to a few weeks to receive the report.
Step 4: Last Steps
While most of the hard work on your part is done, you’ll need to follow-up on all the paperwork. For example, your lender is supposed to arrange for a title company to verify that the seller has the legal right to sell your house and if the property has any liens.
Don’t forget that you’ll need home insurance for your new property. It’s a good idea to start getting quotes about two weeks before your closing date.
Additionally, three days before your closing date, you’ll receive your Closing Disclosure. This form finalizes your Loan Estimates with all the costs and fees of your loan. You’ll need to examine this form for any errors carefully. If the document needs to be reissued, your closing date will be delayed.
Step 5: Closing
On closing day, you will sign all the paperwork to buy the home, including your loan documents. It will take a few days to release the funds to the seller. As soon as the paperwork is processed and the money is delivered, you are ready to move in!
With all these steps, it’ll likely take the average homebuyer 14 to 60 days to move into his or her new home, from contract to close. Unfortunately, any complications or hiccups during the process can drag out the time period even longer.
Homebuyers can ensure a smooth process by diligently preparing every step of the home buying process. You’ll be in your new house in no time!