A successful closing has many moving parts, and the process can take up to two months, with the current average sitting at 49 days for conventional mortgages.
However, in today’s volatile market, sellers are dealing with an avalanche of offers, and many are going through a stressful homebuying experience while trying to sell. Some may have to relocate quickly for a job or have an urgent need for cash in hand.
The enticement of a quick closing is important right now because it helps your offer stand out from the crowd, especially if you’re competing with cash buyers. If you’re ready to close as quickly as possible and start enjoying the perks of being a homeowner, here are some of our top tips to make that happen.
The most crucial thing you can do to speed up your closing is to be prepared. Have your earnest money and down payment ready to go before you make a serious offer. Depositing your earnest money in escrow within 24 hours of offer acceptance shows you mean business.
Getting pre-approved for your mortgage loan also helps things move faster. Many sellers won’t even consider prospective buyers who don’t already have a pre-approval letter from their lender.
Proper documentation is key to getting approved for a home loan, and having your paperwork in order in advance will make the underwriting process much easier. Here’s what you need to have on hand before you apply:
- Identification such as a valid driver’s license and Social Security card
- Bank statements
- At least two years of federal tax returns
- Employment records and pay stubs
- Credit reports
- Documentation for child support, alimony, a previous foreclosure, or any other unique situations
- Your down payment funds
One of the most harrowing parts of the closing period is having to wait on other people. Putting your ducks in a row ahead of time will go a long way towards making things happen faster.
Protect Your Investment
You should also assemble your pro real estate team as soon as possible. A qualified and licensed agent with comprehensive local knowledge, a respected attorney, an insightful lender, a highly-rated title company, and a trusted third-party escrow officer will all play vital roles in your successful closing.
While you may be tempted to forgo a home inspection to make the closing process shorter, don’t do it. Your team can recommend trusted home inspectors in your area, and it’s wise to go ahead and schedule this as soon as possible.
Getting a thorough inspection can save you money, time, and headaches in the long run. Many real estate agents suggest putting a home inspection contingency into the purchase contract. While this can sometimes derail plans for a quick closing, it will also keep you from buying a house with a host of expensive hidden issues.
Your lender will also typically require an appraisal of the home as a condition of underwriting your loan application. While sometimes the appraisal fee is wrapped into your closing costs, it can also be required in advance, so be prepared to make that payment quickly.
The seller has most likely had an appraisal performed so they set an appropriate asking price. If your appraisal comes back higher than your offer, you’re under no obligation to reveal that to the seller. It’s actually best if you don’t — your sale isn’t final until you sign the paperwork, and angering the seller can delay or even wreck your closing completely.
Be Responsive and Proactive
Another way to shave time off your closing process is to stay available for any questions or requests from your lender or seller.
With new technology and changes since the pandemic, many items related to your loan application are in digital format, and therefore you can quickly submit them via email instead of having to fax or deliver papers by hand like in the old days.
Shopping around for your homeowner’s insurance is one more thing you can do to close faster. You can start requesting quotes as soon as you put your offer in.
Stay in touch with the seller in order to set up your final walk-through. This is a critical element of the closing process, and your last chance to make sure the home is in good condition and you’re really ready to purchase it.
You should set aside at least 30 minutes for the walk-through, and perhaps longer. Real estate professionals recommend that you feel free to examine every square inch of your potential property and check for things like:
- Working light fixtures and outlets
- Running water or leaks
- Functioning included appliances
- Flushing toilets
- Wonky doors
- Problems with the walls or flooring
- Ceiling fans
- Garbage disposals
- Heat and AC
- Hot tub or pool filter and pump issues
Some buyers bring the supplies to test dishwashers and laundry equipment, and a small hand-held plug-in appliance, such as a hair dryer, for testing the outlets.
Sign and Go
By having your paperwork in order, doing your due diligence, and being prepared, you can slash your closing time and therefore make your offer more appealing to beleaguered sellers who just want to move on.
Your talented real estate team will be there to assist you every step of the way. From skilled agents to attorneys and escrow officers, Landtrust offers a full spectrum of services for your buying or selling needs, for both residential and commercial properties.
If you’re ready to buy a new home, we’re here to help — contact us today!