We get asked this question all the time! It really depends on you and your timeline. We have had clients find the perfect house and close in 10 days, and we’ve had clients search for 5+ months and close 45 days later.
How Long is Escrow?
If you’re getting a loan, escrow is generally 30-45 days. This gives the lender enough time to gather & submit any additional documents to the underwriter. This also allows you, the buyer, to complete and review any and all disclosures and inspections.
As part of the closing process, it’s absolutely essential to find the right loan officer who can meet the timelines and of course, offer you the best interest rate. We have worked with hundreds of loan officers and have found the most difficult files have been with lenders who do not communicate. Just like with any relationship, communication is everything!
Steps to Buying Quick
- Know the difference between your wants & needs
- Find a great real estate agent who understand pricing & loan officer
- Get pre-approved prior to looking at homes
Factors That Will Delay Closing
Unfortunately, there are numerous situations that could arise and delay the close of escrow. A buyer or a seller of a property can never be absolutely sure a deal is done until all contingencies are removed, which the default in the contract is day 21. We can’t predict what is going to happen, but we can help prepare you. Here are a few situations that could arise:
Beautiful Southern California, home of the termites. Almost every home in SoCal will encounter termites at one point or another. When you go to buy or sell a home, you will likely have to negotiate termite repairs, which can push around your close date. Some loans even require a termite inspection and clearance prior to funding the loan. If you live in a community with an HOA that covers termite damage, the HOA may not understand or care about your timelines.
When you finance 20% or less, the purchase of your new home heavily relies on it appraising for the price you offered or more. If an appraisal comes in too low, the seller will have to reduce the asking price or the buyer will have to pay cash for the difference. So for example, if the buyer and the seller agreed to $500,000, but the bank’s appraisal comes back at $480,000, then the bank will only lend $480,000. Sometimes this can cause a deal to fall out.
One of the most common scenarios we come across is when buyers can’t qualify for their loan. Although a buyer may be pre-approved with a loan officer, the underwriter has the final say. Some other financial delays may include: increase in rates, job loss, or change in buyers credit score.
Any home you buy, you should get a home inspection. This inspection will point out anything that is wrong with the home, from appliances to major systems to potential water damage. When you ask for repairs to be made and the seller agrees, these repairs must be finished prior to closing escrow. When you do your final walk through of the home, if you find something was not repaired, this may delay closing on time.