This is a common question from home buyers and sellers alike. The reason it’s so common is that the answer is, “it depends.” In general, from signed contract to the closing table can take 30 to 90 days. In order to answer the question more specifically of how long does it take to close on a house, we have to define what “closing” is and look at what could possibly make the closing take longer.
What is closing on a house?
Closing on a house is the actual process of signing the new deed to the home. If you bought the home with traditional financing then you’ll be signing the deed to the home as well as a deed or note that gives the bank ownership of the home while it’s being financed.
This might seem a bit elementary. However, first time home buyers buying homes for sale in Davenport FL often confuse “signing the contract” with closing. From the time you sign the contract to the closing, there are several hurdles that could cause delays and even cause the deal to fall through.
In addition, many homebuyers think that if closing can happen in 30 days that’s how long the home shopping process takes. Unfortunately, that’s inaccurate as well. It’s estimated that the average home buyer takes roughly 6 months to search for a Florida home, find the one they want, negotiate the right price, get financing, get inspections, appraisals, and more. This brings us to the reason closing on a home can take longer.
4 Major Factors In Why Closings Can Take Longer
Financing is the number one reason closings take longer. The less obvious reason that financing causes delays are that most consumers think they should find the home and then get financing. Most people would never think to go to the grocery store, pick out items, then go back home and figure out if they have enough to pay for them all, and yet that’s what most people do. When home buyers approach home buying this way it can cause delays and potentially cause them to lose the home they want.
The more common delays related to financing are tied to picking the wrong lender. Davenport real estate agents like us have preferred lenders, not because they pay us anything but because we know they won’t take advantage of you and they can close on time. Closing on time means from the time I find the perfect house for a client to the time they move in is not more than 45 days.
This is such a problem mainly because national lenders don’t know each state’s laws and customs. A lender based in California may think that your home in Florida should take just as long to close as it does in California (6 months), so they drag their feet on getting the paperwork done. One popular lender has so notorious of causing delays it makes their name an oxymoron.
While lenders are to blame for 80% of the delays when it comes to closing your home, there is another group to blame for the other 20%. You. Okay, maybe not you in particular, but in general, people cause a lot of unneeded delays. A lender may request bank statements, so you wait until the weekend or your off day to tackle getting that to them. By doing that you just delayed the loan by 7 days! That could be the difference between moving in as scheduled and having to sign a temporary occupancy agreement!
The inspection process is particularly precarious for buyers and sellers. Typically, a buyer will hire a professional to inspect a home and this process only takes a few hours. I think it’s important to remember that you hire an inspector to find defects but that’s not all they do.
When the inspector comes back with a 70-page report about the home it’s important to note that the inspector wants you to feel like you’re getting value. In addition, to all the problems they found, they usually include things that might be problems in the future and things that are not problems but they felt you should know about them. However, in the tense atmosphere of negotiations both sides end up feeling defensive about this report. This is where the delays can happen, in the back and forth of negotiations..
Typically appraisals are only a problem if:
- They come in lower than the purchase price
- There was another delay that caused this appraisal to be scheduled later than usual.
In particular, if the appraisal comes in low, both parties can decide to fight it and that can cause delays.
In general, people not coming to an agreement in a timely fashion is what causes delays. However, sometimes life, lenders or the world throws circumstances that just delay the closing. Here are a few things that have delayed closings in the past…
- Home buyer didn't get a full approval that included HOA fees.
- The lender wants one more paystub
- Out of state lender requests something that isn’t needed to close, like a survey
- Home buyer loses their job
- Home buyer buys a car
- Natural disaster forces closings
- And many, many more.
The question of how long does it take to close on a house really depends on a few things. However, if you want to close quickly then you will need to choose a local lender that is known for closing quickly, get them your information quickly, and moving quickly through the negotiation process.