This is a very common question! There is no exact answer, since there are quite a few variables that go into closing. For example, I’ve have had clients find the perfect house and close in 10 days, and I’ve had clients search for 5+ months and close 45 days later. Lets brake it down.
How Long is Escrow?
If you’re planning to take out a loan, the approval process takes a few weeks. In this time, the lender will order an appraisal and gather all necessary financial documents from the buyer to then submit to the underwriter. The underwriter has the final say of whether the loan is approved or not. This time also allows the buyer to complete and review any and all disclosures and inspection reports.
As part of the closing process, it’s absolutely essential to find the right loan officer who can meet the timelines and of course, offer the best interest rate. I have worked with many loan officers and have found the most difficult files have been with lenders who do not communicate. Just like with any relationship, communication is everything!
Steps to Buying Quick
- Know the difference between your wants & needs
- Find a great real estate agent who understands pricing
- Get pre-approved prior to looking at homes
Factors That Will Delay Closing
There are numerous situations that could pop up and delay the close of escrow. No property is considered sold until escrow closes! As a Realtor, I can’t predict what is going to happen, but I can help prepare you. Here are a few situations that could arise that may delay closing on time:
Good ole Southern California… home of the termites. Almost every home in SoCal will encounter termites at one point. When deciding to buy or sell a home, you will likely have to negotiate termite repairs, which can push around your close date. Some loans actually require a termite inspection and clearance prior to funding the loan. As a heads up, if you live in a community with an HOA that covers termite damage, the HOA may not understand or care about your timelines.
When putting down 20% or less on a home, lenders will commonly require that the home appraises for the price listed in the Purchase Agreement. If an appraisal comes in lower than the purchase price, the Lender will only lend the amount that the home appraised for. This is a common recipe for homes falling out of escrow if the Buyer & Seller cannot come to an agreement.
Getting a pre-approval is the start of any Buyer’s journey! Although, having a pre-approval doesn’t mean you’re all squared away with getting a loan. Any change in your financials while in the middle of buying a home could result in loss of qualification. Some of these deal breaking changes may include: job loss, large purchase or change in credit score.
When buying a house, it is HIGHLY recommended to get a home inspection. This inspection will point out anything that is wrong with the home, from appliances to major systems to potential water damage. Home inspections point out the things we may not have seen the first, or second, or third time around. The inspector will provide the Buyer with a report of all their findings and generally will highlight any concerns. The Buyer then has the choice to ask the Seller to make repairs based on the inspectors concerns. If the Seller agrees, the Seller must complete the necessary repairs prior to closing escrow. If the Seller lags on the repairs, or straight up just doesn’t do them after agreeing to, this can delay the closing of escrow.
This isn’t here to scare you! I do want to make sure for anyone thinking about buying or even selling a home, that you’re prepared! 😊