As the housing market continues to trend higher and inventory becomes more scarce, the time it takes for a home to be bought and sold is also shrinking. Technology is clearly contributing to the speed of transactions, but considering the number of things that must be completed before a property can be bought can be over whelming.
- Deposit of earnest money.
- Title search and title policy.
- Home inspection or waiver.
- Fully executed purchase agreement and addendums.
- Completion of buyer inspections, including release of contingencies, if demanded.
- Appraisal of property by lender’s appraiser.
- Buyer’s final walk-through inspection or waiver.
- Lender’s loan approval and satisfaction of loan conditions by buyer such as depositing evidence of a homeowner insurance policy.
- Seller’s and buyer’s signed escrow instructions.
- Seller’s signed and notarized deed conveying title.
- Buyer’s signed and notarized deed of trust and executed promissory note.
- Buyer’s signatures on all loan documents and deposit of buyer’s funds from lender.
- Deposit of balance of buyer’s down payment and buyer’s closing costs.
According to a recent analysis, homebuyers are now buying their homes 11 days faster than they were in 2018. The period it takes to close on a new purchase transaction, according to this report, has fallen from 74 days in 2017 to just 40 days in 2019.
Also, credit scores have significantly improved over the last few years, which has a corresponding benefit of causing the transaction to close faster. This same report revealed that borrowers with good credit scores (760+) averaged a closing time of just 38 days in 2019. This compares with those borrowers with lower credit scores (-720) taking 45 days.