In this guide, we'll walk you through the entire process of selling your house for cash, from deciding whether it’s the right choice to understanding the steps involved and weighing the pros and cons.
Buying a home, whether it's for yourself or your family, is a significant milestone. However, just like any other milestone, it takes time, effort, and dedication to close a house. A whole process comes with buying a house, but it'll be all worth it when you finally get a home you can say is yours.
In this article, we'll explore the steps involved in closing, how long each phase typically takes and tips for preparing for your closing day.
Generally, it takes about 45 days to close on a house; however, certain factors can delay or hasten the process entirely. Here are a few factors that can affect your house-buying process:
Appraisals pertain to your house's estimated value, typically done by licensed appraisals based on several factors such as condition, location, and size.
When buying a home, the bank requires an appraisal—at your cost—to safeguard its investment. Essentially, they want to ensure the property is worth at least what you pay.
That way, the bank can recoup its losses if foreclosure ever becomes an issue. If the appraisal comes in lower than expected, the seller might need to lower their price, or you'll have to cover the difference in cash.
House inspections before closing a house are a common practice among sellers, with most of them offering home inspection contingencies that allow buyers to back out from the offer if they find any significant defects in the house without paying any penalties or fees.
However, if, despite all the defects, you decide to move forward with the offer, your closing timeline might get delayed for a few days because you'll have to negotiate with the seller about the house's repairs.
Consider asking the seller to credit your repair costs at closing to hasten things up. That way, you'll have the funds to handle it on your terms after you've got the keys.
Certain areas are more susceptible to natural hazards than others. So, your potential home is located in a hazardous area; in that case, you'll likely receive a document showing a list of natural hazards that may affect your home during escrow.
But there's more: if your home is located in a high-risk area, you might find yourself paying for additional hazard insurance.
So, you don't want to be caught off guard. In that case, it's best to research the area by asking your local real estate agent or even the city's planning department about any potential natural hazards you might encounter in the area.
There is a cloud on title if a claim can affect the ownership of the property you want to buy.
In other words, if there’s an unresolved dispute or claim against your home, the closing may take longer than a month or two since you'll have to wait until the cloud is cleared before your home purchase can proceed.
Title insurance protects you from claims such as third-party ownership disputes, forgery, fraud, or any outstanding liens or judgments. So, to avoid dealing with a cloud on title, it's best to conduct a thorough title search to ensure no one else has a legal hold on the house you wish to buy.
The entire closing process involves several steps, from accepting the offer to finally receiving the key and title of your new home. Here are the steps to help you understand the real estate closing process.
The closing process begins the moment you accept the offer. From here, the house enters escrow, where all funds remain with a third party until the sale is complete. You will likely submit a deposit during this part to ensure your commitment to the transaction.
If you use a mortgage to buy your house, you must first submit your mortgage application to the lender. The lender will then look at your financial statements, credit score, and other documents that will help determine whether the lender will go forward with your application.
If you're financing the purchase with a mortgage, this is one of the lengthiest parts of the closing process. Once your offer is accepted, you must submit your mortgage application to the lender.
From here, the lender will review your financial documents, check your credit score, and ensure the property meets the requirements through an appraisal. Therefore, a loan approval process may take anywhere between 30-45 days.
After the lender accepts your loan application, the next step is to schedule a home inspection and appraisal to check whether the property is well-maintained and devoid of severe defects. Any defects found on the property can prolong the whole process.
Meanwhile, an appraisal will be ordered by the lender to confirm the market value of the home.
Once both inspections and appraisals have been completed, the loan enters the underwriting stage, where lenders review all necessary paperwork to ensure no irregularities exist before finally approving the loan.
After reviewing all the necessary documents, a title company or lawyer will then perform a title search to ascertain that there are no lawful claims against the property or any encumbrances on its title.
A couple of days before closing, the lender sends you a closing disclosure with all the loan terms, fees, and closing costs included. You will then be given at least three days to review the document before the actual date of closing.
At the same time, you'll be scheduled to have a final walkthrough of the property to ensure everything is in the agreed-upon condition.
Closing day is when everyone signs and reviews the final paperwork. Here, you'll sign all the remaining documents, pay the seller, and finally, you'll be given the keys to the house. Normally, the entire process takes only a few hours, but if there are some last-minute issues, it might take a little longer.
House closing can be overwhelming and stressful. One way to lessen that stress is by preparing and researching beforehand. Here's a quick guide on how you can prepare for a closing on your home.
Suppose you're planning on financing your house purchase through a mortgage. In that case, you should prepare all the necessary documents to submit to your lender, such as tax returns, financial statements, proof of income, etc.
So, please don't wait for the lender to ask for these documents. Take initiative and gather these documents beforehand and submit them to your lender as soon as possible to avoid delays.
It will be okay if you find any defects in your soon-to-be home during the house inspection. Instead, think of an action plan beforehand, so you won't have to waste time thinking about how to solve the problem.
If necessary, be prepared to make concessions or negotiate with the seller to keep the process moving.
Your closing disclosure outlines your loan's financial details, including interest rates, fees, and the total amount you'll pay at closing.
Go through the contract diligently to ensure everything is what you agreed upon. Don’t be afraid to notify your lender if you find any mistakes on the document so that they can be sorted out before the day of closing.
Before you finalize everything, it's essential to have a final walkthrough to check out, with your own eyes, if the repairs you requested during the initial inspection were made. If you notice any issues, address them to the seller or your real estate agent before closing.
Before closing the deal, you must sort out your finances first. So, before closing the deal, make sure there is enough money in your bank account to cover your closing cost, downpayment, and other fees you agreed upon on closing day.
Buying a house can feel like a whirlwind. It requires time, effort, and lots of paperwork. Several factors go into the house closing, but preparation always makes things easier and better. By preparing for future possibilities, you can streamline the process and close your new home as quickly as possible.
However, if you still need to figure out where to start, it might be time to turn to Camarotti Homes. With our wide array of homes, you’ll be able to find your dream home at a glance. Through our streamlined process, you don't have to worry much about the closing process, as we’ll help you every step of the way.
Contact Camarotti Homes today and get the keys to your dream home today.
No effort needed, no hidden fees. Receive cash and a fresh start in just 7 days.
