Somehow in the way the real estate industry works, it makes no sense how home closings operate. You’d think when you get that home loan, and funds transfer over, that you can walk right into escrow within seconds. Thats not the way it works, sadly…. However, it’s a process (a thankful process), and as long as you’re in the know, it’s all like riding a real estate train as you sit and enjoy tea while staring out into the view of the window (we’ve heard it’s quite fun, actually).
Typically the Home Closing Process Can Take as Little as 30 Days or as Many as 45 Days — But It’s Completely Normal
The first thing you need to do is know that you’re not doing anything wrong. No, your payment wasn’t returned. You’re not in trouble. Everything’s fine. Just remind yourself that the house doesn’t close when you want it to, whether you’re the buyer or the seller —
It closes when the lender says it will.
Surprisingly, while the lender calls the shots, the coach behind all the plays happens to be the escrow officer, the title company, a real estate lawyer, or someone designated as an actual closer. All in all, every state has a different process, but recognize that there is a time frame to follow.
Now don’t get stressed and overwhelmed, but here’s just an example of some of the conditions required of an actual closing in California —
- Executed Purchase Agreement & Addendum
- Earnest Money Deposit
- Home Inspection or Waiver
- Seller Obligations (Pest Inspection Report, Roof Certification, Home Warranty, Etc.)
- Contingency Releases & Buyer Inspections
- Final Walk-Through or Waiver
- Property Appraisal
- Loan Approval (Ex: Evident Deposit of Homeowner Insurance Policy)
- Signed Escrow Instructions
- Signed & Notarized Deed Conveying Title
- Signed & Notarized Deed of Trust & Executed Promissory Note
- Loan Document Signatures
- Buyer’s Deposit
- Down Payment & Closing Cost Deposit
Again…. Don’t stress. It looks like a lot. Once it gets going, it goes fast.
You Can Help Yourself Out With Loan Pre-approval Over Pre-qualification
As if there was a difference (there is). Getting that home loan pre-approved makes everything move faster, verifying certain items even before you sign on the dotted line. You might qualify — but if you’re not making sure you have the reserves and enough funds to prove you can make those mortgage payments, you most likely won’t get approved. But just in case you know you will get approved, get that out of the way before the closing process, and you’ll see the entire agreement move that much faster.
Just how much faster? Let’s say the lender has verified your employment, bank account(s), and credit report; with all of that in place, underwriters can get the paperwork done along with appraisal as soon as two weeks. Maybe even one week.
In other words…. You have some control over how fast this process goes. So it’s in your best interest to get those items squared away first.
Bear in Mind the Real Fact That Oftentimes There Will Be Delays
Simply prepare yourself. Take sedatives if you need to. Because a lot of things can happen that’ll delay the entire closing process, and it helps to have a list of things that might happen:
- Additional Debt Discovered on Credit Report
- Errors on the Buyer’s Credit Report
- New Liens or Judgments Filed Against Buyer/Seller
- Title “Clouds”
- Marital Status Change
- Required Updated Bank Statements
- Missing Insurance Information
- Expired Loan/Program Commitment
- Fee Changes in the Loan Estimate
Just to name a few. No worries, though. Some things you can change and help move forward. Other things are beyond your control. One of those things you can control is a provision on the contract that makes the closing process contingent upon loan approval. If that provision doesn’t exist, you as the buyer could basically lose that earnest money deposit as the loan won’t be approved, and the transaction won’t close.
But With the H.O.P.E. Program’s Help, One Thing’s for Sure:
Your fears are, well, waived. It can be scary. But rest assured: being in the know is the best thing to keep your peace of mind as you go through this scary closing process. All it takes is one time to get through it. Like a haunted house. Then pretty soon you’ll know that all the fear is just animatronics, smoke, and mirrors. Before you know it, you’ll be unlocking the door of your new house in no time thanks to the H.O.P.E. Program!