By Grant Edrington – Updated July 28th, 2023
Closing on a new home is a major life milestone and a major reward for all of the steps taken on your homebuying journey. The time it takes to close can vary. In some instances, it can take as little as one week and as much as 60 days (if not more), although the time to close usually takes between 30 to 45 after the seller accepts your offer. The closing process consists of two distinct periods: escrow and closing day.
The escrow period refers to the timeframe between signing the contract with the seller and the actual closing day. During this period, funds and necessary documents are held by a neutral third party, such as an escrow agent. It’s also the time when you secure your financing, finalize the sale agreement, and when the home inspection, appraisal, and title search happen. 1,2
On closing day, you’ll sign all the required paperwork, receive the keys, and officially become the owner of the home.
We’ll help you better understand the closing process. Here’s what you’ll learn:
- How Long Does Closing Day Take?
- What Closing Papers Will I Need to Sign?
- Average Timeline for Each Step of Closing
- What Can Cause Delays in Closing a Home?
- Does Closing a Home With Cash Speed Up the Timeline?
- Get Support on Your Journey to Homeownership With Divvy
- Closing on a Home FAQs
How Long Does Closing Day Take?
Closing day — the day you go to the closing agent and sign your final paperwork to buy the home — typically takes between one to two hours if everything goes smoothly. But you’ll want to leave plenty of time in your schedule in case it takes longer.
During your closing appointment, you’ll sign documents (such as a mortgage or promissory note, affidavits, and deed of trust – to name a few) and pay your down payment. Your lender will also wire the balance of the sale price at this time.
The title or escrow agent will usually facilitate the closing appointment, but in some states, the closing attorney manages this. You’ll want your real estate agent and/or attorney to be present, as well. Be sure to bring your ID, a cashier’s check, proof of insurance, and your purchase and sale contract.
Buyers usually must attend this meeting in person, whereas sellers can sometimes sign their paperwork ahead of time. 1, 2
Need info about the closing process for Divvy specifically? Check out our help article about Divvy’s closing process and delays.
What Closing Papers Will I Need to Sign?
On closing day, you can expect to sign various important documents. These may include: 2, 3
- Loan estimate and closing disclosure
- Loan application
- Mortgage note (or promissory note)
- Deed of trust/mortgage (an agreement that the mortgage lender will hold the property’s title until the home buyer repays the loan in full)
- Deed (a legal document that shows ownership of property transferring from one party to another)
- Title (determines the right of ownership and rights to sell a property)
- Affidavits(a written and notarized legal document that states the condition of a property)
- Initial escrow disclosure
- Transfer tax declaration (if applicable)
- Certificate of occupancy (if newly constructed home)
- Homeowners insurance policy
- Other lender-specific or state-specific documents
Average Timeline for Each Step of Closing
The timeline for closing on a home can vary, but here is a general overview of the stages involved and the average time it usually takes for each step: 1, 2, 3
|Offer and acceptance||The buyer makes an offer, and the seller accepts it.||1 to 3 days, if the seller accepts an initial offer.|
Further negotiations can extend this timeline.
|Escrow account||An escrow account is opened to hold earnest money. Earnest money is a percentage (usually 1% to 3%) of a sale price of a home held in reserve to protect the seller if the buyer backs out.||Within 3 days after an agreement has been accepted|
|Home inspection||The buyer arranges a professional home inspection to assess the condition of the property.||7 to 10 days to schedule and complete|
|Appraisal||The lender orders an appraisal to determine the value of the property.||2 to 4 weeks to complete|
|Financing and loan approval||The buyer secures financing and goes through the loan approval process.||Typically takes 30 to 45 days, depending on the lender and complexity of the loan|
|Title search and insurance||A title search is conducted to ensure there are no liens or claims against the property.||2 to 3 weeks|
|Final walkthrough||The buyer does a final walkthrough of the property to ensure it is in the expected condition before closing. This step is usually done within a few days leading up to the closing.||1 day|
|Closing preparation||The necessary paperwork and documents are prepared for the closing.||1 to 2 weeks|
|Closing day||The buyer and seller meet to sign the final paperwork, transfer funds, and officially complete the transaction.||1 to 2 hours|
It’s important to note that these timeframes are general estimates, and the actual timeline can vary depending on various factors, like the complexity of the transaction and the responsiveness of the parties involved.
Are you thinking of buying your first home? Here are some first-time homebuyer programs that can offer financial support.
What Can Cause Delays in Closing a Home?
Delays in closing on a home can occur for various reasons, and it’s important to be aware of them to anticipate potential issues. Here are some common causes of closing delays: 4
Difficulties in securing financing, like changes in the buyer’s financial situation, issues with the loan application, or delays in receiving loan approval, can prolong the closing process.
If the appraisal comes in lower than the agreed-upon sale price, it can lead to negotiations between the buyer and seller to adjust the price or seek a second appraisal, which can extend the closing timeline. When this happens, the buyer’s lender will not lend more than the appraised value based on loan guidelines.
Home Inspection Findings
Discovering significant issues during the home inspection may require further negotiations for repairs or credits, leading to delays in closing until the necessary agreements are reached.
Problems with the property’s title, like unresolved liens, boundary disputes, or legal complications, may need to be resolved before the closing can proceed, causing delays.
Document and Paperwork Errors
Errors or missing documentation in the closing paperwork, including the contract, title documents, or financial statements, can require correction or document replacement, which can delay closing.
Buyer’s Financing Contingencies
If the buyer’s financing is contingent upon certain conditions, like the sale of their current home, it can create a chain of dependencies and delays if any of those conditions are not met in a timely manner.
The seller’s readiness to move, complications with their own purchase or relocation, or issues with clearing the property for transfer can cause delays in closing.
It’s important to note that these are just some examples, and each situation may have its own unique factors that can contribute to closing delays. Working closely with your real estate agent, lender, and other professionals involved can help address potential issues and keep the closing process on track.
Does Closing a Home With Cash Speed Up the Timeline?
Paying for a home in cash can significantly speed up the closing timeline. When there is no need for financing, the buyer avoids the time-consuming process of loan approval, underwriting, and appraisal. Plus, there’s no requirement for the involvement of a lender, which eliminates potential delays related to lender requirements and documentation.
However, it’s important to note that even with a cash offer, certain steps like title search, inspections, and transfer of ownership still need to be completed, which may introduce some timeline considerations. 5
Get Support on Your Journey to Homeownership With Divvy
Divvy offers a unique rent-to-own program that provides support throughout the journey to homeownership, including during the closing process. With Divvy, you have the opportunity to rent a home with the goal of eventually owning it. A portion of your monthly payment may go toward your savings for your homeownership goals, such as a down payment.
One of the perks of closing on a home through Divvy is that we purchase homes with all cash, often making the closing process faster and more efficient. The average Divvy customer goes from offer to close in just 19 days.
Want to learn more about Divvy’s rent-to-own program? Find out how it works.
Closing on a Home FAQs
How fast can you close on a home?
The speed of closing on a home can vary, but it typically ranges from one week (although that timeframe is quite rare) to between 30 and 60 days after the seller accepts the purchase offer, depending on factors like financing, inspections, and negotiations. 1, 2, 3
Why can closing take up to 30 days or more?
Closing can take around 30 days or more due to various factors involved in the process, including loan approval, appraisal, title search, and coordination between multiple parties. 1, 2, 3
Is 90 days too long for closing?
While 90 days may seem long for closing, it can be a reasonable timeframe depending on the complexity of the transaction, financing requirements, and any additional contingencies or negotiations involved. 1, 2
How long does it take for an underwriter to clear to close?
The time for an underwriter to clear to close can vary, but it usually takes around one to two weeks after the loan file is complete and submitted for underwriting review. However, the timeline can be affected by the lender’s workload, complexity of the file, and any additional documentation or conditions required.6
Where does closing take place?
Depending on your state, closing can take place in the office of the title company, the lender’s office, or the escrow company. In some circumstances, you can also do closing remotely, using a secure electronic document service and videoconferencing.7, 8
Grant is a member of the marketing team and focuses on connecting aspiring homeowners in our metros with Divvy. He's worked on marketing teams spanning all parts of the homeownership journey, including home loans, power tools and home improvement, siding and flooring, and now Divvy. Grant graduated from Villanova University and became a homeowner in 2021.