Whether You’re Buying or Selling a House, Here’s How the Closing Process Works
Closing on a house can feel like a finish line, but it’s really the start of a whole new process. In fact, when buyers and sellers get to closing, several things have to happen — and they all have to go right — for the deal to successfully close and for buyers to become the official new owners.
To help you understand the process, we’ve answered some questions and shared a step-by-step guide on closing below, addressing:
- How the closing process works
- How long it takes to close on a house in Texas
- How to expedite the closing process as a buyer or seller
How Closing Works for Buyers & Sellers: 7 Steps
Closing on a house generally includes the following steps. Keep in mind that some buyers or sellers may choose to bypass some of these steps. Regardless, however, closing usually starts as soon as buyers and sellers agree to the terms of the purchase. That can be when the offer is accepted or after some negotiation to work out the terms of the deal.
From there, here’s what happens next:
- The escrow account is opened: A neutral third party will open escrow for the buyer and seller. All funds and critical documents are held in escrow until closing is finished.
- The title search gets underway: Title searches can find any defects, disputes, or legal issues associated with a property. That could include anything from liens and easement issues to court judgments, boundary disputes, and so much more. With the title search, lenders may also require title insurance as a shield against potential liabilities or defects linked to a property.
- The home inspection occurs: Buyers who want a home inspection can get one at this stage in the closing process to see if there are any underlying issues with the home. Home inspections can reveal all sorts of potential problems, like foundation, plumbing, electrical, and/or roof issues (among others). Sometimes, buyers opt out of the home inspection. In other cases, buyers may want to renegotiate the terms of the purchase, based on the findings of the home inspection.
- Buyers take out a mortgage loan (if needed): Whether or not buyers got preapproval from a lender, now’s the time to officially take out the mortgage loan. With preapproval, the process can go faster. If buyers don’t need to take out a mortgage because they can pay cash, this step can be skipped in the closing process.
- The appraisal is done: Some lenders require an appraisal as a term of the mortgage. In other cases, buyers may want an appraisal as a contingency of the purchase (to verify that they’re buying the house for what it’s worth). Either way, an appraisal can occur at this phase of the closing process. If it does, the costs for this will usually be folded into the mortgage loan costs.
- Closing costs are paid: Buyers and sellers may be responsible for their own closing costs — or either party may have agreed to cover the other’s closing costs. Who covers what should be included in the purchase agreement, and these costs will have to be paid for the deal to close. Mortgage loan fees, homeowners’ insurance, title insurance, private mortgage insurance, and more can all be part of closing costs.
- The seller gets paid, and any final documents are signed: Closing disclosures, proof of homeowner’s insurance, and final signatures on loan documents can all be part of Closing Day. Once that happens and the seller gets the funds, the buyer will be the official new owner of the home.
Keep in mind that the closing process can look different from deal to deal because:
- Different buyers and sellers may make different choices during the process: Getting preapprovals, choosing to have the home inspection, and other choices can affect how the closing process moves forward and how long it takes to wrap it up.
- Contingencies can add extra layers to the process: Buyers and/or sellers may need to do some extra things before closing can move forward when has added contingencies to the purchase agreement. That could mean, for instance, that sellers have to make certain fixes before the deal proceeds because the home inspection turned up certain problems.
How Long Does It Take to Close on a House in Texas?
The average closing takes about 30 to 50 days. That said, the closing process can:
- Be expedited when buyers and sellers agree to close faster: If everything is in order, closing in Texas could happen in as fast a week to 10 days.
- Take longer: If the buyer or seller needs the closing process to last longer (because they’re trying to time another deal or move), they may want to extend it to a couple of months.
No matter how fast or long you need closing to be, you’ll be better off with a Realtors® in your corner.
How to Expedite Closing as a Buyer or Seller
The right knowledge and a little help can go a long way toward streamlining the closing process and helping you make the best deal on your next real estate transaction in Texas. So can the experienced Realtors® at New Home Gurus of Gurus Realty.
In fact, whether you’re buying or selling a house, we can guide, advise, and support you through the process, helping with contingencies, offers, negotiations, and closing. Plus, we’ll split our commission with you at closing.
Homebuyers and sellers who work with New Home Gurus can get back an average of $4,500 to $12,000 at closing.
How Much Cash Can You Get After Closing?
Call (281) 668-8124 or Contact Us to Find Out Now
We are standing by, ready to answer your questions and explain the details of our commission-sharing program.