Closing on a house is incredibly exciting but it’s important to know the timeline. This is especially true for first-time closers because there are some important dates that one should be aware of. Of course, there are some variables and flexibility within the timeline of closing on a house because of the dance the seller and buyer will play, but having a sense of what is respectable and not is important.
Let’s go through a rough timeline that most normally represents what it is like to close on a house. In general, once an offer has been accepted there is a 30-45 day window to make all the preparations and close on the house.
The first step that puts everything into motion is the offer. The offer will start the closing timeline but this step itself can take some time to get through. Once you decide that you like a home and have your agent go through it with you, you can put down an initial offer.
It’s important to note that most of the time, that initial offer will be countered and that is what starts the pre-process of closing on a house timeline. So after an initial offer is made on what we can consider as day 1 off the process, the sellers will review it and make a counter-offer.
Likely, this part of the process alone will take a few days because when a buyer puts in their offer they put it in high knowing that the seller is going to renegotiate an offer. This is with the exception that the housing market is hot and that the house is in high-demand where buyers are putting in offers over the amount. In that case, they may take a few days to say there was a better offer.
However, likely they will come up with a higher number than your offer that is closer to the selling price but slightly short to help seal the deal. You can expect 2-3 days for them to get back to you after discussions.
What is important to note is the final offer should include the agreed price, a closing date, and move-in date.
Something that will go in the same timeline as your offer will be opening up the escrow account. Once you are serious about a house the owners will likely want to see you put down your earnest. This is somewhat of a deposit and likely will come from the escrow account you opened in those first 1-3 days.
If the deal goes through but you decide to back out, the earnest money will go to the seller. However, if something majorly goes wrong, that earnest will be redundant back to the seller. It is a part of the pre-closing process.
Immediately after agreeing on a price, hopefully, day 3-4, you will want to schedule a home inspection. While this is optional of course it is really important to do so because if any major problems are lying within the house it gives you justifiable cause to back out at an appropriate time and get the earnest money back.
Getting someone out for a home inspection is not a difficult thing to do but you will want to make sure it is a quality contractor and home inspector that knows what to look for. The ideal goal is to have them come out in those first few days since closing on the offer because they may want to take some time looking at the house.
Depending on how thorough of a job you want them to do will depend on how long the home inspection will take. Normally, it is not more than a day or even more than a few hours as they are looking for structural issues, plumbing, electrical, mold, and all that stuff you want to make sure is gone or non-existent before you get there.
If this can be done in the first week you will be in good shape.
Even though you have agreed on the final offer that you will give towards the house there are sometimes some hiccups with the home inspection. This is why the final purchase agreement is not signed until after the home inspection is completed.
If the home inspection is done within a week then the purchase agreement can be signed within 7-10 days. What happens in these 7-10 days is important. If the house is perfectly inspected and there are no issues, then you probably lean towards the 7 because there is nothing to renegotiate.
However, if there is some damage but not enough to scare the buyer away, then renegotiating the price or in general, the agreement comes into play. Sometimes a buyer will ask for certain demands such as the plumbing to be fixed before the moving date. In other cases, though instead of asking for them to fix it they will just negotiate a lower price that equates to the amount of money it will take for the new buyer to fix it themselves.
In the week after getting through the final agreement then you will need to get the appraisal. This is different than the home inspection because you lender for your mortgage has to approve the amount of money the house is worth by doing their own inspection.
This can take 10-20 days because you have to allow for scheduling after doing the initial mortgage paperwork and then this is where there can be a few bumps along the way. If things go smoothly they will say the house is worth what you say it is and give you the loan.
If it is not, then you need to decide what your best option is. You may need to renegotiate the offer again, make up the difference, or walk away from the house. Expect this part of the process to the one that takes up the most time.
Something that also needs to happen early on around those 10-15 days is getting title insurance. This is when an insurance company will go through the title of the house to make sure there aren’t multiple mortgagees on the property and that the title is clean. This cna be a setback for anyone trying to buy the house if there is a title complication.
This step is better to get done as early as possible as it will affect your loan applications and possibly deter you from buying a house. Likely, your mortgage lender can work on the appraisal, finalizing the documents between you and them, as well as inspect for title issues all at the same general time.
This is when the order can be somewhat flexible within the week as they are all things that need to get done but don’t necessarily rely on a particular order in which they are done.
The next 10-15 (day 30-45) days are when you will finalize your approved loan after the appraisal has been submitted and sign the rest of the papers if you should decide to go through with the house. Now, depending on how many renegotiations you did and how many things they need to fix or not for the close date and moving date will depend on the number of days.
In situations where there is major work that needs to be done this 45-day rule can extend because of any complications. Having said that, normally any complications over 45 days from the original accepted offer will lead to backouts and the earnest being refunded.
This is what the general closing timeline looks like for anyone who is buying a house. While there are exceptions to this it is important to understand how soon things need to happen because they are usually contingent on one another to get through the process.
If a seller is moving too slow to negotiate it is OK to speak up. It’s also worth noting that if you are moving too slow and don’t have your ducks in a row as a buyer, a better offer could come along.
In general, it is also important to note that order matters. While somethings can be done simultaneously such as setting up escrow and making an offer, some things will need to be followed in a step-by-step process because they rely on each other. You can’t change up the timeline in terms of finalizing the loans before having your appraisal done. That is depending on another.
Having said all that, this is the general timeline you can follow for closing on a house.