Exactly how long does it take to buy a house? When it comes to selling, buying or closing on a home, one of the major headaches can be time. Recent US real estate statistics have highlighted that the average householder spends around four months on house hunting, looking at approximately twenty properties before closing a deal. The actual time it takes to buy a house is generally around six to eight weeks if financing. Naturally, as part of the closing process it’s absolutely essential to find the best mortgage terms as well as an attorney who will assist with any legal issues concerning buying a home. Selling a home, buying a home or closing on a home involves many factors that can depend significantly on the location. To reduce the timescale, buyers and sellers of real estate in will benefit from the following:
- Knowing exactly what they want in a house
- Working out how much they can afford
- Asking a realistic price for a property
- Choosing a recommended real estate agent
- Acquiring a suitable mortgage lender
- Hiring an attorney who is dedicated to finalizing the closing process as quickly as possible
Do some homework
To get an approximation for the closing process, do some homework and shop around for a professional Realtor®. Ask friends, neighbors and work colleagues as well as financial advisers for positive referrals to attorneys. It’s worth remembering that financial closing costs are paid by both the buyer and seller. In some cases, the seller has to pay for certain expenses while the buyer pays for others. To minimize closing expenses, a reputable real estate agent can help negotiate buying or selling costs on their clients’ behalf. However, it’s worth pointing out that some fees are set by US law and cannot be negotiated, so do bear this in mind when thinking about the ins and outs of the closing process.
What could delay the closing process of buying or selling a property?
Unfortunately, there are numerous reasons that could affect and delay the closing process of buying or selling a home. A buyer or a seller of a property cannot be absolutely sure a deal is done until the “t’s” are crossed and the “i’s” dotted. In some parts of the country the term “escrow” is used. The term escrow is the 30 – 60 days between a contract on a property being accepted and the keys handed over. In North Carolina and states surrounding, we simply consider that the “under contract” time. They basically mean the same thing. During this time there may be many hurdles to overcome for both the buyer and the seller which could cause delays putting them back to square one. Here are some of the most common problems that buyers or sellers could encounter through this period and what can be done if possible to prevent them.
Termite or Pest inspection – the vast majority of mortgage lenders in the US insist on having a pest inspection carried out on the property to make sure there is no serious damage. Insects, termites and carpenter ants can quickly eat through wood leaving it infested and unstable. The cost of pest inspections to the property buyer is usually around $100 or less. This will protect the lender’s interest within the property so if pests are detected, the deal could fall through. It’s also in the best interests of the buyer to have a termite inspection carried out. After all, buying a property however large or small, is a major investment. If the problems are deemed to be too severe and the seller won’t pay to remedy them, then the buyer has the option to walk away as long as the purchase agreement has the correct contingencies. Also, keep in mind that in North Carolina, a buyer may cancel the contract at any time within the “due diligence” period. See what is a due diligence deposit for more details.
An appraisal – a lender will have a property appraised in order to protect their investment. The Mortgage Institution in Nevada will want to make sure the home is worth at least what the buyer is paying for it so losses can be recouped if anything untoward happens. The rule of thumb is if an appraisal comes in too low, the seller will have to reduce the asking price or the buyer will have to pay cash for the difference. When this situation arises get a more favorable second opinion from a different appraiser and realtor.
Getting cold feet or the buyer or seller backs out – an established Realtor® will make sure there is a contract in place outlining justifiable reasons for the buyer backing out of the deal without a penalty. This could include not waiving a contingency or not meeting a deadline. If the buyer decides after the due diligence period that they don’t want to go through with the purchase, maybe because they have found a better property, the earnest money will be lost. This will compensate the seller for the time their home was off the market. Alternatively, if the seller decides to back out because he or she has a change of heart or a better offer was made for the property, the buyer has the legal right to collect damages from the seller. The seller may also be responsible to pay the real estate agents’ commission in full as the listing agreement states for the listing agent to produce a ready, willing and able buyer. Generally speaking, it is much more difficult for a seller to back out of a contract than for a buyer.
Be sure to get approved for finance – real estate experts have highlighted that one of the main reasons for property deals falling through is that buyers do not get Pre-approved for finance. Making an offer for a property without getting financial Pre-approval can be a major mistake. Most sellers in North Carolina won’t even entertain an offer until they have received a Pre-approval letter from the buyer’s lender. Generally speaking, the buyer getting “pre-approved” can save a great deal of headaches and keep deals from falling apart. However, things can and do happen leading to the closing process being at risk especially if the buyer has lied or left something out on their loans application form. Additionally, if interest rates increase sharply, a buyer loses their job or their credit score goes down their property offer could be in jeopardy.
A home isn’t insurable – if the seller has made a major insurance claim in the past on their property such as water damage, fire or mold, this should show up on insurance records. Some insurance companies may refuse to insure a property if it is too much of a risk. At the end of the day, if a home is not insurable a buyer won’t be able to make an offer unless they are paying cash. Let’s face it, it’s not a good idea to buy an uninsurable home so seek the advice of an experienced realtor if any problems like this come to light.
The closing process
Once an offer on a home has been accepted, the inspections are complete and finance is in order, the next move to focus on is the closing process. Professional realtors can prepare buyers and sellers regarding what to expect throughout closing. Settlement day involves the formal and legal requirements of transferring ownership of a property from the seller to the buyer. Regulations can vary from one state to another, however the following two aspects are usually the same.
A contract should allow the buyer to schedule a walk-through of the property 24 hours before closing. This is intended to ensure that the seller has completely vacated the property and the home is in the condition which has been described in the contract. Any outstanding repairs should have been completed and everything is in place for new occupancy. If the walk-through does reveal any problems, it can delay the closing process or the buyer can ask the seller for money to address the issues.
It is also important to note that in North Carolina, a closing is not complete at the closing table. Legally and officially, the deal is not complete until (1) all monies are in and accounted for (2) the deed has been recorded and (3) the title has been updated to ensure that nothing changed on title from the time of the original title search until the deed was recorded. Once those things are completed, the money may be delivered to the seller and the keys may be delivered to the buyer.
If you are considering buying or selling a home, Alford Realty Group would be happy to help! Call us today at 704-408-2834. Allow us to guide you through all of this and much more. We take the stress off so you can focus on the other important things in your life.