Investment Tips

Ultimate Timeline for Closing on a House for Buyers

2 years 9 months ago I 0 minutes read I 111 Views

Renee Tulliani

As a buyer, you might want to rush into closing your home, or might want to prolong closing in order to secure a better deal, however, if you do foray away from the optimal timeline then chances are you might face some serious hiccups along the way. Thus you might want to reevaluate your expected timelines based on what we’re about to tell you and stick closely to them.
Congrats on finding your dream home, you’ve met the seller and negotiated and agreed on a price, now the tricky part of closing the deal begins, so buckle up!
 
<h2 class="MsoNormal" style="text-align: justify;">Week 1: Opening Escrow, Title and Professional Inspection</h2>
 
Let’s break this down. Once you and the seller have agreed upon a price, you need to proceed forward in opening an <a href="https://www.escrow.com/what-is-an-escrow-account#:~:text=An%20escrow%20account%20is%20an,have%20fulfilled%20the%20escrow%20agreement.">Escrow account</a>. What’s escrow you ask? Well, escrow refers to a third party that holds onto all monetary payments, including the down payment that you’ll make, and important documents until all <a href="https://www.upcounsel.com/contract-stipulation#:~:text=Payment-,Contract%20stipulation%20refers%20to%20a%20demand%20for,be%20included%20in%20an%20agreement.&text=Whenever%20you%20draft%20a%20legal,of%20restriction%20on%20the%20contract.">contractual stipulations</a> are obliged. In doing so, the rights of both the buyer and the seller are protected for a fair and just transaction. 
 
Second, you need to arrange for a professional inspector to review and evaluate the current state of the property. As a buyer, such a professional inspection enables you to uncover and be made aware of any defects within the property and the nature and extent of said faults that might not have been previously explicitly stated by the seller. You can thereafter proceed forward to move towards a post-inspection negotiation based on the professional examination of the inspector. You can also incorporate any corrective measures to be undertaken by the seller into the contract if you choose to do so. Be wary that this inspection needs to be completed within the first week or else you might not be able to invoke the <a href="https://www.investopedia.com/articles/personal-finance/102913/contingency-clauses-home-purchase-contracts.asp#:~:text=An%20inspection%20contingency%20(also%20called,of%20a%20professional%20home%20inspector.">inspection contingency</a>, inherent in most real estate transactions that allow for a buyer to pull out if major flaws are discovered within the property during the inspection. So act timely so that you can act wisely. 
 
Thirdly you’ll need to employ a title company that will investigate whether there are any other parties who lay legal claim to the home you’re about to purchase, besides the immediate seller. This pre-emptive step is to safeguard you and your property from any legal ownership related disputes now, or in the future.   
 
<h2 class="MsoNormal" style="text-align: justify;">Week 2: Finalize the purchase agreement</h2>
 
Take this week to negotiate and finalize the purchase agreement based on the inspection results. The seller might undertake his/her own professional inspection too if they feel they’ve been unfairly inspected. Thus discuss the issue thoroughly, negotiate and conclude within the week. If any concessions need to be made or repairs need to be undertaken by the seller pre-sale completion then have them stipulated in the transaction contract so as to ensure their timely execution.
 
<h2 class="MsoNormal" style="text-align: justify;">Week 3 - 6: Mortgage Approval </h2>
 
Moving onto the mortgage process, which is the most time taking step while closing on a home; a mortgage company will order an appraisal of the property you’re set on procuring. This step involves a lot of waiting as a professional appraiser evaluates the property price on the basis of which the mortgage company will thereafter engage in the lending procedure. If the appraisal price is less than the price you’ve concluded via your own negotiation with the seller then you’ll either have to re-negotiate and match the appraised price or pay the difference from your own pocket. If you genuinely feel that the professional appraisal undertaken on behalf of the mortgage company is unrealistically low, then you can submit an appeal for a re-evaluation and present the necessary documentation and information that support your claim. 
 
After the appraisal, the mortgage company initiates approval processes internally. This can take anywhere from 2 to 6 weeks or longer. Further variation in the timeline can arise depending on your personal credit score, financial circumstances and market conditions. A mortgage broker can however aid you in accelerating this process for a fee. Once your mortgage is approved, it generally valid for 6 months after which you’ll have to re-engage the mortgage approval process from scratch. If an explicit closing date is stipulated in the transactional contract then even if your mortgage is approved early, you’ll still have to wait for the closing date to arrive to conclude the transaction.
 
<h2 class="MsoNormal" style="text-align: justify;">Week 7 Onwards: Closing</h2>
 
After all necessary obligatory steps have been completed and all contractual stipulations met, you’ll meet the seller at the closing table along with a representative from the lender's office, Title Company or attorney’s office, depending on which state you’re in. After signing all the final paperwork, the deed to the house and keys will be handed over to you and escrow will proceed onto releasing the down payment. And voila, welcome to your new home sweet home!
 
Although closing a home might seem like an overwhelming experience, however, we at <a href="https://yourdealty.com/buy">Dealty </a>not only help you find your dream home but also provide you with the necessary resources and tools that allow you to easily navigate throughout the transaction process. Our motto is to help you “keep calm and carry on”.  Visit us at <a href="https://yourdealty.com/">Dealty </a>today!

Renee Tulliani

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