There is any number of reasons that real estate consumers seek a quick close – from the need for speed to start a new job in a new city to the need to beat a lease’s expiration.
Today, the nationwide average closing time on a home purchase is 48 days, according to Ellie Mae’s Origination Insight Report (this number fluctuates monthly). If you need to close quicker than that, pay heed to the following tips.
1. Pay cash for the home
When you pay cash for a home you do away with the loan contingency in the purchase agreement, thereby substantially reducing the time it takes to close on a home.
Although many cash buyers hire their own appraiser to determine if the home is truly worth what they’ve agreed to pay for it, since there isn’t a lender involved, the appraisal – something that tends to slow down the process -- isn’t mandatory.
A “clean” cash purchase – one with few contract contingencies – can close in as few as seven to 10 days.
2. If you need a loan, see a lender before house hunting
If you’ll be using a loan to purchase the home, get the approval process out of the way before even looking at homes. Since the loan process takes up the most time in a typical purchase, the further you are into the loan process, the quicker you can close.
For a quick close, ask for a full loan approval instead of a pre-approval. This way, if the underwriter asks for additional supporting documents you can take your time supplying them, without worrying about holding up the transaction.
3. Don’t purchase a distressed property
If you’re looking for a quick close you need to keep the transaction lean and mean. The fewer people involved, the quicker it will go.
Distressed homes – foreclosures and short sales – are notoriously slow in closing. This is mainly because of the additional people that are involved in the transaction. From the lender’s facilitator to its loss mitigation department – with a lender as the seller, every aspect of the transaction takes longer.
4. Submit a clean purchase agreement
Experienced real estate agents know how to submit an offer that, if accepted by the seller, will advance quickly to closing. This means doing away with anything that is time-consuming.
Ensure that the title report is ordered immediately. Liens or other clouds on the home’s chain of title take time to investigate and remove. If the title report is ordered as soon as the transaction opens you’ll have time to deal with any problems that may come up without slowing the process.
Speak with your agent about other aspects of the contract that can be tweaked to get a quick close.