Buying a house for the first time is filled with excitement. As closing day approaches the suspense can be stressful.
On the one hand, you’re thrilled to have your own home, but on the other hand, you’re worried about the new financial responsibility.
You’ve already gone through the hard part of getting pre-approved, making an offer on a house, going through the inspections, and having received your mortgage commitment.
The easy part should be signing the closing papers. One of the more common questions home buyers will ask a real estate agent is “how long does a closing take?”
The time it takes to sign closing papers is fairly straightforward. Most closings take around forty-five minutes to an hour for a buyer to put their signature on all the paperwork.
If you have questions for the closing attorney about what you’re signing, the time for closing day could take longer.
What Happens Before Closing Day?
Before closing day can be scheduled quite a few things need to happen first. Let’s take a look at the closing timeline.
When you’ve never purchased a home before the process of closing on a property can be confusing.
The average time for closing on a home runs between 45-60 days. Potential buyers and sellers ask real estate agents all the time how long it takes to close on a house.
Making An Offer on a House
The first in the process of closing on a house is finding one you love. Once you make an offer, there is usually a response within 24 hours. Your offer can either be accepted or the owner could counteroffer.
The current real estate market could dictate how long it takes for a response. In extreme seller’s markets, there could be a “best and final” offer directive given by the listing agent.
Bidding wars on houses are not uncommon in hot markets. They are characterized by low inventory and multiple offers. When you are the winner, count your blessings. Many buyers are getting locked out from purchasing a home. To them, a closing seems eons away.
Home Inspections Are Scheduled
When you are the winning bidder, home inspections will be scheduled unless you have waived them. Some buyers are removing the home inspection contingency in an effort to make their offer more appealing.
The typical home inspection contingency period is 7-10 days. When problems are discovered by the home inspector, there could be further negotiations needed, depending of the severity of the issue.
When estimates from contractors are needed to remedy the problem, you might need up to another week to finish the contingency period. In some cases, a seller may offer a concession in order to move things along.
Apply For a Mortgage
Some buyers will wait for the results of the inspection before applying for a mortgage. Others will take the gamble and get the ball rolling on their financing before knowing the inspection outcome.
Buyers will either meet the mortgage lender in person or could do it virtually.
A Real Estate Appraisal is Ordered
Unless you have waived the house appraisal, which also happens in hot seller’s markets, it will be a few weeks after applying for the loan.
The real estate appraisal will be ordered by the mortgage lender providing the loan. A licensed appraiser typically visits the property in order to create an appraisal. They will look at many variables to provide a fair market value to the lender.
Usually, the appraisal results will be sent back to the lending institution within a week of visiting the property.
The lender will use the appraisal to determine whether the property has ample equity. Sometimes there is an appraisal gap and either the seller will need to reduce the price or the buyer will have to come up with additional down payment funds.
Most of the time there are no appraisal issues.
The Buyer Gets Their Mortgage Commitment
The mortgage company will re-examine the buyer’s finances after the appraisal to make sure nothing has changed. The buyer’s credit score will be checked and their income and employment will be verified.
Once the lender has checked that everything is in order, the buyer will receive final approval for the loan. This step is called “clear to close.” Closing day will now be a matter of waiting until everyone is ready.
Title Search is Completed and Cleared
One of the more vital things that need to be completed before a closing can be scheduled is a title search. A real estate attorney or title company will do an extensive search to make sure there are no encumbrances against the title.
Examples would be liens, unpaid taxes, a forged deed, zoning violations, property encroachments, and many others. Lenders need to make sure that before closing is scheduled there is clear title on the property.
There are also a few other minor things that will happen on the buyer’s part such as getting a home insurance policy and possibly title insurance.
How Long Does Closing Day Take?
How long does it take to sign closing papers? As previously mentioned, closings usually take around an hour. However, it is possible they could be closed in a matter of minutes.
For example, if you were paying cash for the home, the bulk of the paperwork at the closing would be eliminated. Most of the documents being signed pertain to the mortgage agreement.
If there was an issue that popped up on the closing day, it’s possible the closing could take longer to remedy the issue.
It is smart to take off the day from work so you are not stressed about the closing day time frame. You could also get a chatty closing attorney who makes the closing time take longer than necessary.
The Closing is Not Complete Until The Deed is Recorded
The real estate transaction won’t be completed until the funds have been transferred and the deed has been recorded at the local registry of deeds.
The transfer of funds can take anywhere from ten minutes to a few hours, depending on the time of day or any kind of glitch. If it is past wiring time or there is a problem with the transfer, the money might not be moved until the next business day.
You can save yourself any unnecessary stress by scheduling your closing earlier in the day. An early closing will allow you to get all of your paperwork done and head home sooner.
If the property is not recorded on the day of your closing, you might not be able to gain access to the home. Many real estate attorneys will not allow a buyer to take possession until the deed has been officially recorded.
Where is The Closing and Who Goes?
The closing is typically held at either the lender’s closing attorney’s office or the title company. With mutual agreement from the parties, it could be held elsewhere that is more convenient for the buyer.
Years ago, closings were more regularly attended by the seller and their real estate agent. That is no longer the case today. Sellers usually give a power of attorney to their lawyer to attend the closing. The listing agent rarely attends the closing anymore, since their client isn’t present.
The buyer and buyer’s agent are typically meeting with the closing attorney to sign all the documents.
How Long Do House Closings Take For a Seller?
Closing on a house for a seller is significantly shorter than a buyer’s. There are only a few documents to be signed on the seller’s side. The seller’s attorney typically signs them under POA.
The average seller is done with their part of the closing within 5-15 minutes.
The seller will often pre-sign their documents with their attorney. The proceeds from the sale are often transferred via wire, so they won’t even be present during the close.
The house keys and door openers are usually left in the house and the buyer’s agent will hold one key to give to the buyer once the deed is recorded.
How Long Does a Closing Take For a Buyer?
The reason why a closing takes so much longer for a buyer is due to the significant amount of papers that are signed.
Not only do they have to sign the deed and transfer, they must also sign all the paperwork from the lender. This is why it can take a buyer, on average, an hour to sign their closing documents.
Not only must the mortgage and deed by signed, but all the additional paperwork from the lender.
Closing Documents Home Buyers Will Sign
The following are the agreements buyers will need to sign at the closing:
- The Deed
- Mortgage
- Bill of Sales
- Tax Declarations
- Promissory Note
- Mortgage Agreement
- Loan Application
- Loan Estimate
- Closing Disclosure
- HOA documents if one exists
- Signature Affidavit
Does House Closings Ever Happen Remotely?
Yes, they do! More and more the buyer and seller will not meet at a closing table. Instead, there will be a remote or online closing.
Technology is taking over every aspect of our lives, and one day it will probably take over the process of buying a home as well.
This is now almost common – for either the buyer or the seller to not be present at closing.
It is possible depending on local laws that either the buyer or seller can take advantage of the Remote Online Notarization Act.
This act gives the Realtor acting on their behalf the power to complete this specific transaction. The power is limited and can only be used for this specific purpose.
Final Thoughts on Closing Day Time Frame
Closing day is the last hurrah on what hopefully wasn’t too stressful of a process. As a buyer, it is essential to ask questions when you’re unsure about something.
Take your time with the closing documents and don’t sign something unless you understand it.
Make sure that all of the paperwork you have signed or received from the lender is accurate. Compare it to what is stated in the loan document to make sure everything is correct.
Finally, make sure you leave with copies of all the documents you have signed. Congrats and best of luck – you now are the proud owner of your first home!
About the Author: The above Real Estate information on how long does a closing take was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for 35+ Years.
Are you thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
Thank you for the breakdown on how long closing day takes.