Buying a house is a kind of juggling act; many things have to happen at the right time and in the right order before the sale of a house can be finalized. Anyone who is planning to move into a new home needs to have a clear idea about how long it will take to close, but the time can be hard to predict. According to a Bluffton realtor, the following are some of the factors that can affect how long it takes to close a house.
Average Time to Close
The average time between signing the initial contract and closing on houses for sale near Bluffton is somewhere between 30 and 50 days. Homes purchased with government loans, such as an FHA mortgage, tend to close more quickly than homes purchased through private lenders. Regardless of the loan type, however, the following things have to happen between signing and closing:
- The buyer applies for financing.
- The buyer has the home inspected and requests repairs, if needed.
- The seller makes repairs, and the buyer re-inspects the work.
- The lender has the house appraised.
- The lender approves the loan.
- The closing attorney is hired.
- The house is inspected for termites.
- The buyer purchases insurance.
- The buyer arranges for a cashier’s check for the down payment.
In a best-case scenario, these tasks can be accomplished throughout 4 to 6 weeks; however, if any one of these steps is delayed, the closing date may be postponed for even longer.
Factors That Can Delay a Closing
There are many reasons why a closing might get delayed, and some are beyond the buyer’s control. However, some of the most common hitches can be avoided if the buyer is proactive. The following are some frequent causes of delay in the closing process.
Problems With Financing
Problems related to financing are by far the most common cause of a delayed closing. For example, if the buyer doesn’t get pre-approved for a loan in advance, it may take longer than expected to get approved. Even with pre-approval, a lender will need to complete due diligence, which can take 30 days or more.
Surprises in the approval process, such as new debt that shows up on a credit report, can cause the buyer to be rejected altogether. Sometimes the approval process is delayed because buyers are slow to submit paperwork and documentation, like pay stubs and tax returns.
Problems With the Appraisal
Before a loan can be approved, the lender will need to have the home appraised. An appraisal is a valuation of the property based on its condition, its location, and recent sales of nearby real estate listings. The lender uses the appraisal to avoid lending more than the property is worth. When an appraisal comes in below the agreed-upon price, the buyer and seller will have to renegotiate the price or cancel the sale.
Problems With Contingencies
Often, real-estate contracts include contingency clauses that stipulate certain conditions that must be met for the sale to go through. Contracts are typically contingent on appraisals and home inspections. Another common contingency is the sale of the buyer’s current home. If that closing is canceled or delayed, the closing for the new house will also be affected.
Problems With the Title
Another issue that can cause an unexpected delay in closing is a lien on a title. A creditor can place a lien on a property if the homeowner owes a debt, and the lien prevents the property from being sold until the debt is paid. In some cases, a lien may be placed on a title without the homeowner’s knowledge. If the homeowner believes the lien is in error, he or she may have to take the creditor to court to clear the title.
While some of these issues are beyond the buyer’s control, a smart home buyer can often take steps to avoid some of these delays. For example, getting pre-approval on a loan and working with an experienced loan officer can often expedite the loan approval process. Accepting a price reduction rather than waiting for repairs to be made after a home inspection can also help to ensure that the closing stays on schedule. Contact Weichert Realtors for more information about the home-buying process.
