The home buying process can take a long time and be quite difficult. Even if you find your dream home you’ll spend time submitting an offer, negotiating a price, waiting for inspections and reports, and then finally comes closing day.
Nationwide homes are on the market for 81 days, and closing averages 45 days. This means the total length of time it takes to sell your home is about four months. For a buyer though the total home buying process can vary quite a bit and so can the costs.
If you can find a home quick and put in a strong offer you can reduce your closing time substantially below those 45 days. This may be advantageous in hot markets, but it can come with significant risks. An expert, local realtor will be informed on whether it is a buyer’s or a seller’s market, and guide you on how to put forward a strong offer.
What Does the Closing Process Entail?
The closing process starts with an agreement on price and then your offer is accepted and a purchase agreement is signed. The end price you pay may not be exactly what you offered and instead could change a bit based on your contingencies and other factors through the closing process.
The purchase agreement outlines what inspections need to be conducted to assess necessary repairs or renovations that may not have been disclosed. Meanwhile, the title company is reviewing the title for any issues of ownership, and an escrow account has been opened with your deposit.
Once inspections are complete and repairs made, if necessary, it may be possible to negotiate the final purchase price. For example, if you wait and do the repairs yourself a reduction in purchase price may be reasonable.
Many home buyers also get final approval on their loan or any other type of financing for the home purchase during closing. If you have already been pre-approved or pre-qualified this should be a simple step. A final appraisal will help determine the final conditions of your mortgage and on closing day you will sign a closing disclosure outlining the final terms.
On closing day you should also be entitled to a final walkthrough to review the condition of the home and be sure the previous owner is fully moved out. Once you have done this you can confidently sign all the necessary documents, and accept the keys to your new home.
How You Can Shorten the Time It Takes to Close
The steps necessary to close on a home can’t be skipped, but the time it takes to complete them can be shortened. In a competitive market being able to reduce the amount of time to close can significantly strengthen your offer.
The biggest way to reduce the amount of days to close primarily comes from the strength of your financial position. If you can submit an all cash offer, you can significantly reduce the time it takes to close. This eliminates the need for financing, which means no need to wait on mortgage approval or an appraisal.
If you still rely on financing you can still speed up the closing process. Get pre-approved for a loan and a letter certifying you have funds available. This shows the seller they do not need to worry about a loan falling through, and coupled with a 20% or more down payment can potentially get your close down to 14 days.
Other ways to speed up the time it takes to close pose further risk to you. If you have few or no contingencies you eliminate the need to wait on inspections or other property reports. This also means you will assume the risk and costs of doing any necessary repairs after close.
If you are willing to accept the property as is, with furniture, appliances, or other items still in the house you will significantly shorten the move out process and allow the seller to literally walk away. This takes more work on your end, but in many auction and foreclosures sales you will likely be stuck doing a certain amount of this anyways.
How to Get Started With Your Home Purchase
When you are ready to purchase your home connect with an experienced, local real estate agent. They will best know the local market, help you uncover deals, and know what requirements and disclosures you should be mindful of.
Wherever you are looking to purchase your home, local regulations, taxes, disclosure requirements, and market conditions will greatly impact the amount of time it takes to close on your home purchase. Working with a trusted real estate agent will help you get all your ducks in a row, so you are prepared to close on your home.
A Clever Partner Agent will be willing to guide you through the entire home search and closing process to help you strengthen your offer, save you money, and shorten closing costs as much as possible.