19/06/2024 10:06 AM


Be life confident

A Timeline for Closing on a Home in 6 Steps

  • The timeline between making an offer and closing on a home is typically about 45 days.
  • The seller accepts your offer and takes the house off the market when you make an earnest money deposit.
  • You’ll schedule an inspection while the lender takes care of the appraisal and title search.
  • This article is part of “The Road to Home” series focused on helping first-time homebuyers navigate the daunting and exhilarating process of purchasing a home.

Making an offer is one of the most exciting parts of buying a home, but it’s not the end of the line. You, the seller, and your mortgage lender still have to take several steps before you can close on the house and receive the keys.

1. The seller responds to your offer

The seller should get back to you within a few days, and there are three potential responses: an acceptance, rejection, or counteroffer. 

The seller might ask for more money, a larger earnest money deposit, or a specific date for the buyer to take ownership. If you aren’t happy with the seller’s counteroffer, you can respond with your own counter-proposals until you reach an agreement.

Christian Ross, managing broker for Engel & Völkers Atlanta, says any counteroffer negotiations should take one or two days, but it could be longer if there’s a lot of back-and-forths. When the seller accepts your offer and everyone signs the documents, then you have a binding contract.

2. Make an earnest money deposit

You’ll make an earnest money deposit, also called a good faith deposit, after signing the contract.

An earnest money deposit is like a security deposit. You put an agreed-upon amount — usually 1% to 2% of the home purchase price — into an escrow account, and the seller will take the house off the market.

If all goes according to plan and you end up closing on the house, your earnest money deposit will go toward your total down payment. For example, you put 2% toward the earnest money deposit, then pay 3% at closing for a 5% down payment in total.

Under certain circumstances, you may be able to keep your deposit if you decide not to close. Your contract likely has home-buying contingencies or standards that must be met for you to close on the home. An appraisal contingency might state that you can legally pull out of the contract if the appraisal shows that the home is worth less than the purchase price. In this case, you would walk away with your deposit.

However, if you decide not to buy for a reason not covered in the contract, you might lose your earnest money.

3. Schedule a home inspection

After making the earnest money deposit, you are responsible for scheduling a home inspection. An inspector does a full assessment of the home’s condition, from the roof to the HVAC system, to the foundation, and everything in between. They’ll tell you about any issues so you can decide whether you still want to move forward in the homebuying process.

Some people may waive the inspection, particularly in a competitive market, to make their offers more attractive to the seller. This is a valid but risky option. An inspection may reveal large-scale problems that would cost you time and money.

Ross says that large firms typically get to your home within a couple of days. They should submit the report the same day or morning after their walk-through.

“Inspections are usually three hours,” Ross says. “If you can, go at least for the last 30 minutes or hour, just so you can get an idea of what they think are the challenges with the property or things that they want you to be mindful of.”

4. A professional appraises the home

An appraisal is different from an inspection. Appraisers determine the value of a property by looking at the location, size, and safety issues. While an inspection is mainly for your benefit, an appraisal helps the lender know how much the home is worth.

The lender sets up an appraisal around the same time that you schedule an inspection. However, it will probably take longer for an appraiser to get to your house.

“As soon as you go under contract, because appraisals are so backed up, your lender is already scheduling your appraisal,” Ross says. “As soon as you’re putting your earnest money down, the lender’s going to ask for payment for the appraisal.”

Ross says four days is the quickest an appraiser can complete their report after the appraisal, but it will probably take several days longer.

While you’re scheduling an inspection and waiting on the appraisal, the lender contacts a title company to complete a title search. 

A title search is the process of looking at historical records of the seller and their property to ensure the seller has the legal right to transfer the home to you. For example, if the owner hasn’t been paying property taxes or homeowner’s association dues, they need to resolve the problem before you can close.

6. Close on the home

Once you’ve settled any issues revealed by the inspection, appraisal, or title search, the lender approves you to close on the home. 

You’ll usually sign closing documents in person, although some lenders allow you to close digitally. The process should take a couple of hours. You’ll bring cash for the remainder of your down payment and any closing costs. You’ll receive a closing disclosure three days before closing, which will include the amount of money to bring.

How long does it take to close on a house?

The amount of time it takes to buy a house can vary quite a lot depending on how competitive the market is.

“From the offer to closing — in a typical market — I would say it takes 45 days,” says Ross.

In a highly competitive market, however, it could take much longer because you might have to make multiple offers before one is accepted. From the time you make your first of several offers, Ross says it could be as long as five or six months before you finally close on one.

Buying a home can be a long, multi-step process, and the waiting period between the time you make an offer and when you take ownership can cause quite a bit of stress and anxiety. Understanding the process involved and your role in it can relieve a lot of that. Then you can better enjoy the sense of pride and accomplishment that accompanies becoming a homeowner.