Sellers have plenty of reasons to close a deal quickly. Some sellers need to downsize and protect their remaining funds. Other sellers are in the process of buying a new home. A seller may need to sell their current home to get enough money to buy their next home.
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Typical Timeline to Close a House Sale
Each house sale is different, but each real estate transaction has similarities. You can expect the following timeline for a typical house sale.
- Home Inspection: The buyer will hire a home inspector to check for problems. At this stage, the buyer likes your home but wants to make sure it doesn’t have structural issues. Some home inspectors will report minor issues, which will help the buyer move forward. If the home inspector reports significant problems, the buyer may ask the seller to cover repairs.
- Appraisal Of Property: If the buyer is happy with the home inspection, they will hire an appraiser to assess the property. The appraiser will assign a valuation that lets you know if you’re overpaying or getting a bargain. The appraiser will scrutinize the property for a few hours before reaching a conclusion. The appraisal process can take 1-2 weeks. The buyer may negotiate a lower price if the appraised value is lower than the asking price. This conflict can lead to a disagreement and the deal falling through.
- Mortgage Underwriting: Most buyers need a mortgage to purchase your house. They’ll approach a bank and ask for a home loan. Most deals fall through because the bank does not approve the buyer’s mortgage request. You can skip this step and the stress if the buyer provides a cash offer.
- Signing Of Documents: Both parties meet to negotiate and sign documents at the closing. These legally binding documents help officiate the transaction. Both parties will sign the promissory note, mortgage note, deed of trust, and other documents.
- Payment Of Fees: Both parties must pay closing costs before the property swaps hands. Parties may attempt to pass closing costs to the other. Buyers get more leverage in a buyer’s market, while sellers can ask for more concessions during a seller’s market. Regardless of how you split the closing costs, making these payments is necessary before moving to the final step.
- Transfer Of Ownership: At this point, the property legally shifts from the seller to the buyer. The buyer can move into the property on the move-in date. This date may be a few weeks after the closing date to give the seller enough time to pack their belongings or buy a home of their own.
Average Time to Close the Sale on a House
Each real estate transaction is different, but Ellie Mae stated that the process usually lasts 6-7 weeks. Ellie Mae has data on a third of all mortgage applications.
Popular Mortgage Lenders
Learn how Angel Oak mortgage lender can offer you home loan solutions tailored to meet your specific financing needs.
Submit an online application form to inquire about Angel Oak Mortgage Solutions financing options.
In this review, learn more about Zero Mortgage's flexible home loan solutions and how to buy a home or refinance your mortgage with them.
Buy a home or refinance your existing mortgage with Zero Mortgage.
American Advisors Group is a leading provider of reverse mortgage solutions nationwide to retirees and older Americans.
Older homeowners can get peace of mind and added financial security with a reverse mortgage from AAG.
Common Reasons for Delays in Closing a House Sale
Not all house sales go smoothly, and you can encounter delays along the way. We’ll share some common reasons for delays so you’re prepared for them.
- Missing Paperwork: The closing process involves plenty of paperwork, and someone may forget the necessary documents. A buyer may forget to bring important documents to their meeting with a mortgage lender. The buyer will then have to meet the lender at another time, stalling the process for both parties.
- Problems In Financing: Most buyers rely on loans to finance a home. If the buyer can’t secure financing, the deal will fall through. You have to trust the buyer to have a good credit score and qualify for a large enough loan amount. You can ask buyers about their ability to finance the property and if they got prequalified or preapproved. While both are helpful, a preapproval carries more weight.
- Big Life Changes: Significant events can cause a buyer or seller to back out of the deal or think it over. If the buyer suddenly loses their job, mortgage payments become more intimidating. Buyers won’t want to put themselves in a position to struggle with mortgage payments and risk defaulting. In addition, a seller may have a change of heart during the closing process because of an event between the accepted offer and the closing date. Rising mortgage rates can scare away some buyers.
- Title Issues: Any unresolved liens or judgments on your home will delay the process. These issues will come up during the closing process if they are unresolved. Liens, illegal deeds, and public records errors are some of the title issues that can block a deal.
- Appraisal Hold-ups: The appraiser may determine the home is overvalued. The buyer may approach you with a low appraisal and ask for a lower price. The mortgage lender may reject the buyer’s loan request if the home purchase price isn’t close enough to the appraised home value. Some deals fall apart during this stage.
- Inspection Issues: Large purchases such as homes require extra scrutiny. Homebuyers hire an inspector for due diligence. Some buyers will ask you to cover the repairs if an inspection brings significant issues to light. Others may ask you to make the repairs before finalizing the deal. You don’t have to fulfill the buyer’s requests, but they can come up.
- Large Deposits And Withdrawals: A large deposit or withdrawal can raise concerns from an underwriter. The lender wants to make sure the buyer can afford the loan before approving the application. Lenders prefer to see consistent deposits and withdrawals instead of a large deposit or withdrawal leading to the loan application. The inconsistent activity can cast doubts and lead to a rejected application. The seller must hope the buyer can get the necessary financing.
- Insurance Problems: The seller has to catch up with insurance and applicable HOA payments before a successful closing. Stay in the loop with your insurance costs and make sure you are up to date.
- Debts And Liens On Property: These issues can block a deal from taking place. Make sure you get these resolved before sitting with the buyer on the close date.
