Key takeaways
- The amount of time it takes to close can vary depending on what kind of mortgage loan you have.
- Cash deals will close much faster, as there is no loan approval process or underwriting to wait for.
- Keeping an eye on your credit score and working with an agent who knows the local market can help avoid delays and keep the process moving smoothly.
Once your offer has been accepted and you go into contract on a new home purchase, it can still be a while before the house is actually yours. According to recent data from ICE Mortgage Technology, it takes an average of 44 days to close on a home. That can feel like an eternity when you’re eager to get settled into your new house, but real estate deals take time. Follow along with this breakdown of the process, along with tips on how to navigate it, to avoid slowdowns and other issues.
How long does closing take?
The amount of time a home spends on the market before selling varies widely depending on your local market. But the national average number of days on market in August 2023, according to the National Association of Realtors, was 20 days. Once the seller accepts a buyer’s offer and the home goes into contract, the closing process officially begins. It ends on closing day, when all the paperwork is signed, funds exchanged, and the property officially changes hands.
So, how long does it take to close on a house? It depends, in part, on what kind of financing the buyer is using to purchase the home. There are lots of parties involved in the mortgage lending process. A lender will want to take a close look at the buyer’s financial situation to fully approve their loan. It will also want to get the home appraised, conduct a title search and more — all of which take time.
The type of mortgage being granted also plays a role. According to the ICE Mortgage data, conventional loans move slightly faster (43 days) than FHA loans (45 days), for example. Tack on the 20 days on market before that point, and the home sale would take around two months to complete, from listing to closing.
An all-cash deal, by comparison, speeds things up considerably because there is no need to wait on financing. And if you’re really pressed for time, you might be able to close on a cash deal with a homebuying company in just days.
How long does the closing day itself take?
On closing day, you’ll typically sit down with all parties involved — including sellers, lenders and real estate attorneys — to fill out a pile of paperwork and pay your closing costs. It involves a lot of reading fine print, initialing documents, writing checks and signing on the dotted line. If all goes smoothly, expect the process to take at least two hours.
The home closing process
Closing on a new home is a process. Steps a buyer must complete before getting the keys often include:
- Hiring an attorney
- Opening an escrow account
- Running a title search
- Having the home inspected and appraised
- Negotiating closing costs
- Setting a date
- Doing a final walk-through
- Attending the closing
The title search should be run early in the closing process. Similarly, getting a home inspection as soon as possible will give you time to deal with any unexpected issues that might pop up. It may take a month to close even after finishing these tasks.
The final walk-through typically happens the day before or the day of closing, giving the buyer one last chance to make sure the home is being delivered in the expected condition.
What might cause delays?
Once the seller accepts your offer, there are a few things that can delay the home closing.
One of the most common issues is the home appraisal — specifically, whether the home appraises for the full purchase price (or more). Lenders want to make sure the home is worth enough to secure the mortgage. If it appraises for less than the amount of the loan, the buyer might have to pay extra to bridge the gap.
Similarly, if a lender finds an issue with the buyer’s financial situation, it might deny their mortgage application. This can actually cause the deal to fall through. But if it doesn’t, finding a new lender will definitely slow things down.
Less common are title issues. The title search may find that there is a lien on the home, for example, or that the seller doesn’t otherwise have a clear title to the property. That will need to be resolved before the ownership can be transferred.
Home inspections can also turn up issues that delay closing. If a major problem is found, the buyer might ask the seller to make repairs before closing — or might even want to back out of the purchase altogether.
Advantages to closing quickly
There are a number of benefits to closing on a home quickly, primarily so that the seller gets their money sooner, and the buyer gets their new home sooner. The process can be stressful, and getting through it lets you move on with your life that much faster.
But there are other, finance-related benefits as well. For buyers, one of them is related to mortgage rate locks. Lenders often let you lock in your loan interest rate, but those rate locks don’t last forever — they typically expire after a set period of time. It’s important to close before the rate lock expires, or else you could wind up with a much higher interest rate.
For sellers, the faster they sell their property, the sooner they can stop paying the mortgage and upkeep. This can be especially important if they have already purchased a new home and are carrying both mortgages for the time being.
Tips for keeping to a fast timeline
If you’re looking to close on a new home quickly, here are some tips to help keep things moving along.
- Get preapproved: Getting preapproved for a mortgage helps you define your budget and shows sellers that you’re serious and qualified to buy, which may help make your offer stand out. If you use the same lender for your official mortgage application, it may also help you close more quickly, because the lender will already have much of the information it needs to make a final lending decision.
- Find a trusted agent: Working with a local real estate agent you like and trust makes problems less likely — and easier to handle if you do run into them. And someone who knows the local market well can navigate the process with expertise.
- Find a trusted lender: Shop around in advance to find a mortgage lender that offers you the best rates and terms.
- Schedule a home inspection ASAP: The sooner you have the home inspected after going into contract, the sooner you can address any issues that might delay closing. The more time you have to negotiate repairs or credits with the seller, the better.
- Keep an eye on your credit score: Be vigilant about your credit score until your close is complete, to ensure the lender has no reason to reassess your mortgage application. If possible, avoid changing jobs, getting married or divorced, or making any other big life changes too — these can affect your creditworthiness and might make your lender reconsider, which can lead to delays (or worse).
FAQs
It is technically possible to close on a home in 30 days, or even less, particularly if you are paying all-cash rather than getting a mortgage or dealing with a homebuying company or iBuyer. But in general, according to data from ICE Mortgage Technology it takes about 44 days to close on a home.
Closing on a home late in the month is useful, because it can help reduce your closing costs by limiting the amount of prepaid interest you have to pay at closing. Season is another consideration, according to Tyler Forte, co-founder and CEO of Felix Homes in Nashville. In general, he says, the housing market is slower in the winter. “Lenders and real estate professionals are less busy during this season, so the closing process does not take as much time.”
The average length of time to close on a home varies, but recent data from ICE Mortgage Technology shows that it takes about 44 days. If you add the 20 days it typically takes for a home to go into contract, per the National Association of Realtors, the total is approximately two months from listing to closing.
