Average Time Home Buyers Take to Close on a Property in Today's Market

As you might expect, the real estate market fluctuates quite a lot when it comes to calculating how long it will take to close on a home. First-time buyers and real estate mavens alike wonder when their new home will finally close. However, there’s no need to worry. We’ve gathered all the essential information you’ll need to know about closing on North Loop Minneapolis condos or homes for sale.

The typical guideline that real estate agents give their clients when waiting for a home to close is to expect the process to take between 30-60 days. However, these figures can vary, especially when the real estate market is in a seller’s or buyer’s market.

 

Bidding wars often crop up when demand is high, as it is in Minneapolis. This can skew the closing time to be upwards of two or three weeks longer, depending on the motivations of the buyers and sellers. Overall, the major factors that contribute to extended closing times include the type of loan you’re taking out and the health of the market in your chosen city.

The closing period for a home begins when a seller accepts your offer, and both parties have signed the appropriate purchase contracts. In 2022, the average time to close is currently set at about 50 days, according to ICE Mortgage Technology’s most recent data.

 

Generally speaking, you can speed up the closing process by making an all-cash offer. In these cases, many buyers have experienced their closing dates cut in half, but every sale is different, and it’s always a good policy to keep the 50-day timeline in mind as an average. According to Ellie Mae, standard mortgage loans led to a closing time of 49 days in 2021, while Federal Housing Administration loans (FHA loans) carried a slightly longer closing period of 52 days.

It bears repeating that the average time to close on a property broadly depends on the health of the real estate market in your city and your financial health. Homes can stay on the market for as long as 30 days. Once you add 30-45 days for closing, you arrive at a good yardstick for measuring closing time.

 

The closing process can change considerably on a case-by-case basis. This is because there are lots of moving parts that have to occur before the sale is finalized. These include:

 

There are several reasons why your personal closing date could get extended beyond the typical timeline. Delays can occur if you have difficulty providing a deposit or if unpaid debts or incomplete applications happen to slow down the closing process. Adding up all these variables means that it can be challenging to predict the closing period for your next home, whether it be a North Loop Minneapolis home for sale or one in another market.

The best way to estimate the length of your closing time is to look at each step of the process individually. Below, we’ll do a quick run-through of what you can expect during this exciting time.

 

1. Signing the application: 1 day. This step generally takes one day to complete, and most home buyers can finish it when filling out their mortgage preapproval. You’ll need to include your name, social security number, address, current income, and the amount of funds you’re requesting for your home loan.

2. Disclosure: <1 week. Completed by your lender, this process is usually complete in under one week. The lender will give you the loan terms and provide you with all the information about your monthly payments and any fees or costs you might expect.

3. Signing documents: <1 week. It will take anywhere between a few days and a week to provide your lender with all the documents necessary to close the deal. You’ll want to give them data about your income and any assets you own — including rental properties.

 

 

4. Home appraisal: 1-2 weeks. This process will likely take the longest while you wait for the home to close. Expect anywhere between one to two weeks. Again, your lender will probably initiate the appraisal and send a professional to the property to assess its current value.

5. Underwriting: 2-3 days. Another two to three days will elapse as your lender assigns underwriters to research your financial health. From there, they will ensure that you are eligible for your loan and that your credit history and additional financial details are in good standing.

6. Conditional approval: 1-2 weeks. This one-to-two-week stage occurs after the underwriters have cleared you for your loan. During conditional approval, you may have to check with your lender and agent to ensure that you have supplied the seller and relevant parties with everything they need.

7. Final clearance to close: 3 days. Expect to wait an additional three days while a mandatory period passes before you can finally sign your name to purchase the property.

8. Closing: 1 day. The last step in the process should only take a day as you and the sellers convene with your agents to do a final review of the terms of the sale. After that, the county will formally list you and your family as homeowners and store your mortgage in their records.

There you have it: our complete guide to estimating how long it might take for a home buyer to close on a property in today’s market. If you have any questions or comments about the closing process for North Loop Minneapolis condos or real estate, reach out to Shane Spencer for more information today! Shane has more than 15 years of experience across multiple fields, including real estate and interior design, and he’s excellent at bringing together his many skills to help you find success on your real estate journey. Reach out today to learn more!