You listed your house for sale, have accepted an offer to sell your house, and now you want to know how long it will take to complete the sale. You probably have many questions and want to Demystify The Home Selling Closing Process. That is what we will do here, so keep reading to get your questions answered and Demystify The Home Selling Closing Process.
The timing of the home selling closing process depends a lot on the lender the buyer has selected. If the buyer is paying cash, then the closing process can be very fast, a few days is possible. When the buyer is getting a loan to purchase the property, it can take much longer. The timeframe really depends on the lender and how quickly they respond, receive the appraisal, process initial underwriting, and final underwriting. This is why it is crucial for buyers to work with a lender that has a good reputation for being responsive and working with an urgency.
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The closing agent can be an escrow officer, real estate attorney, or title company. The closing agent is selected during negotiation of the purchase and sale agreement. Here in Washington, most transactions are closed with an escrow officer.
Closing Process - First Steps
Once you have accepted an offer, you will send the paperwork to the closing agent that has been selected. This includes the Purchase and Sale Agreement and all addendums, including contingencies.
In the meantime, the buyer will deposit earnest money with the closing agent and the funds will be held in escrow. The closing agent will issue a receipt to show when they received the funds.
Closing Process - Next Steps
If the buyer is going to do an inspection, that will happen next. The buyer must respond within the timeframe stated in the agreement. After the inspection has been agreed upon by both seller and buyer, the buyer can then notify the lender to order the appraisal. It can take up to 10 days or more for the lender to receive the appraisal back from the appraiser.
If there are any repairs the seller needs to make according to the agreement, then they must make the repairs, show the buyer proof of the repairs (usually receipts and pictures), and the buyer must agree that the contingency has been met.
The lender may also require additional documentation from the buyer such as proof of funds and proof of new homeowner's insurance policy.
Closing Process - Final Steps
Once the lender has completed their final underwriting and approved the loan, the lender will send loan docs to the closing agent. And they will let the closing agent know when they will transfer the funds to the closing agent.
The buyer will typically do a walk through within a few days of closing to ensure the property is in the condition that was agreed upon.
The closing agent will contact both parties to schedule a time to sign the final documents and collect any funds due from the buyer or seller.
The last few steps are for the closing agent to transfer the funds to the appropriate parties and record the transaction with the county. The closing agent will then send recording numbers to all parties letting them know the transaction has been closed and recorded.
Closing Process - Timing
With a cash buyer, the closing can be as fast as 7 days or less. When the buyer is getting a loan, the closing process can be around 45 days or more. If you are in a short sale situation, then your current lender will have to approve the transaction, and the closing process can take 6 months or more. Any contingencies can also impact how long the closing process takes.
Recently there were changes to the closing process due to TILA-RESPA Integrated Disclosure (TRID), which will add up to 2 weeks or more to the closing timeframe. Click Here to learn more about the changes.
Before signing a purchase and sale agreement, read the contingencies to figure out the timeline and whether or not it will work for you and your situation.
Your real estate professional can make a huge difference in whether or not the sale of your house closes on schedule. They will remain in contact with the closing agent and lender to ensure both parties have all the documentation they require. Your real estate professional can give you a heads-up about what can potentially cause a delay and help you work through it to close the transaction as scheduled. Your real estate professional can Demystify The House Selling Closing Process for you.
Keller Williams NWRE LLC
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