According to a report from mortgage technology company Ellie Mae, it took an average of 49.9 days to close on a home in 2021. That can feel like an eternity when you’re eager to get into your new house, but real estate deals take time. This breakdown of the process and tips to navigate it can help you avoid slowdowns and other issues.
How long does closing take?
The closing process officially begins once the seller accepts a buyer’s offer. It ends on closing day when they sign all the paperwork and the property officially changes hands.
The length of a closing depends on what kind of financing the buyer is using to purchase the home. In general, closing takes longer if the buyer is getting a mortgage than it does with a cash deal. That’s because there are lots of parties involved in the lending process. A lender will want to take a close look at the buyer’s financial situation to fully approve their mortgage. It will also want to get the home appraised, conduct a title search and more — all of which take time.
The type of mortgage being granted also plays a role. According to the Ellie Mae data, conventional loans move slightly faster than FHA and VA loans:
- Conventional loans: 48 days
- FHA loans: 54 days
- VA loans: 57 days
A cash deal, by comparison, can speed things up considerably. Closing an all-cash sale can take just a few weeks. If you’re really pressed for time, you might be able to close on a cash deal in just days.
Closing on a refinance is usually faster than a purchase.
How long does the closing day itself take?
On closing day, you’ll typically sit down with all parties involved — including sellers, lenders and real estate attorneys — and fill out a pile of paperwork. It involves a lot of reading fine print, initialing documents, writing checks and signing on the dotted line. If all goes smoothly, expect the process to take at least two hours.
The home closing process
Closing on a new home is a process. Steps a buyer must complete before getting the keys include:
- Hiring an attorney
- Opening an escrow account
- Running a title search
- Having the home inspected
- Negotiating closing costs
- Setting a date
- Doing a final walk-through
- Attending the closing
The title search should be run early in the closing process. Similarly, getting an inspection as soon as possible will give you time to deal with any unexpected issues that might pop up. It may take a month to close even after finishing these tasks.
The final walk-through typically happens the day before or the day of closing, giving the buyer one last chance to make sure the home is in the expected condition.
What might cause delays?
Once the seller accepts your offer, there are a few things that can delay closing.
One of the most common issues is appraisal — specifically, whether the home appraises for the full purchase price (or more). Lenders want to make sure the home is worth enough to secure the mortgage. If it appraises for less than the amount of the loan, the buyer might have to pay extra to bridge the gap.
Similarly, if a lender finds an issue with the buyer’s financial situation, it might deny their mortgage application. This can actually cause the deal to fall through. But if it doesn’t, finding a new lender will definitely slow things down.
Less common are title issues. The title search may find that there is a lien on the home, or that the seller doesn’t otherwise have a clear title to the property. That will need to be resolved before the transaction can be completed.
Home inspections can also turn up issues that delay closing. If a major problem is found, the buyer might want to back out of the purchase or ask the seller to make repairs before closing.
Advantages to closing quickly
There are a number of benefits to closing on a home quickly. The most basic reasons are that the seller gets their money sooner, and the buyer gets their new home sooner. The process can be stressful, and getting it over fast lets you move on with your life that much faster.
But there are other, finance-related benefits as well. For buyers, one of them is related to mortgage rate locks. Lenders often let you lock in your loan interest rate, but those rate locks don’t last forever — they typically expire after a set period of time. It’s important to close before the rate lock expires, or else you could wind up with a much higher interest rate. For sellers, the faster they sell the property, the sooner they can stop paying the mortgage and upkeep. This can be especially important if they have already purchased a new home and are carrying both mortgages for the time being.
Tips for keeping to a fast timeline
If you’re looking to close on a home quickly, here are some tips that will help you move things along.
Getting preapproved for a mortgage helps you know your budget and shows sellers that you’re serious about buying, which may help make your offer stand out. It also can help you close more quickly, because your lender will already have much of the information it needs to make a final lending decision.
Find a trusted lender
Try to work with a mortgage lender that you trust and have an established relationship with. This makes problems less likely — and also makes the lender more likely to work with you if anything does come up.
Schedule a home inspection ASAP
The sooner you have the home inspected, the sooner you can address issues that might delay closing. The more time you have to negotiate repairs or credits with the seller, the better.
Avoid any major life changes
If possible, avoid changing jobs, getting married or making any other big life changes during the homebuying process. These might require your lender to reassess your mortgage application, which can lead to delays. While you can’t predict everything, of course, it’s smart to do what you can to avoid major shakeups.
Closing on a home is an involved process, but being prepared can help make things move along more quickly and smoothly. Try to schedule inspections, appraisals, title searches and the like as early in the process as possible to give yourself time to deal with any unexpected issues that pop up.