The journey to buying a home in Texas is filled with several steps, and submitting an offer to closing on the purchase may take you several days or weeks to complete. If you’re a first-time homebuyer, you may be wondering how long it takes to get your potential home’s keys in hand successfully.
It takes homebuyers an average of 47 days to close on their prospective home purchases. Loan type, contingencies, market type, appraisal disparities, among other personal factors, may influence a home closing timeline.
In the following sections, you will learn more about the average closing timelines and what to expect when looking to close on your new home in Texas.
Understanding the Home Closing Process & Timeline
Closing is the final phase of the home buying process. It usually starts from the period when the seller accepts an offer through to when ownership of a property is transferred to the buyer. The closing process may take between 4 to 8 weeks from the time the seller accepts the buyers’ offer (Source: EllieMae).
Typical Closing Timeline by Loan Type
Each loan type—conventional, FHA, VA, refinance loans—have different requirements and guidelines, which may affect your overall closing time.
Below is a breakdown of the average closing timelines of several mortgage programs:
|Loan Types||Time to Close (in Days)|
Refinance loans tend to close faster than most purchase loans across the three discussed loan types above. The primary reason for this is the expedited process allowed by streamline refinancing.
The Home Closing Process in Texas: Step-by-Step
The closing process or escrow starts once the seller accepts your offer and ends when you move in. Below is the typical home closing process in Texas:
A few days after the seller accepts your offer, you will need to deposit your earnest money to a third-party, which is usually a title or escrow company. Your earnest money is typically 1-3% of the home purchase price made towards your closing cost.
If the sale goes through, you’ll receive the money back in the form of a credit, but you may lose out on your deposit if you back out from the deal.
If you didn’t waive the home inspection contingency, you need to hire a home inspector to carry out a comprehensive inspection of the home. Doing a home inspection will help you identify the true state of the house.
Also, you may be able to discover repair issues that will help you negotiate better or back out of the deal in time. If you have a home inspection contingency in place, you can easily get out of the purchase with your full earnest money amount.
Home inspections generally take a few hours, but the report may be available within a week.
If you’re not financing your new home purchase in cash, you’re most likely getting a mortgage. If you’re getting a home loan, your lender will need to do an appraisal of the property.
Your lender will hire an appraiser to find out if the home is worth the amount you are asking for as a loan. If the purchase price is higher than the home value, your lender may refuse to approve the loan or request that you put down more money.
Home Title Check
When you close on a home, the seller transfers the title of the home to you. A transfer of the home title makes you the legal owner of the house. During the closing process, you will need to do a title check to verify that there are no other parties or issues linked to the home title.
While the inspection and appraisal are going on, your mortgage lender will be underwriting your loan. This involves verifying your documents, income, debt, assets, and employment to determine if you will be able to afford the loan amount.
Obtain Home Insurance
Lenders will require that you obtain a homeowner’s insurance to protect you in the event of damages to the house in the future. This is usually a condition for home loan approval, and you will need to present it on the closing day. The average cost of homeowner’s insurance in Texas is around $3,429.
Receive Closing Disclosure
Once your loan application is reviewed and approved by your lender, you will be issued a closure disclosure three days before the closing day. The closing disclosure will contain a summary of the approved loan amount and the cost of the loan.
You will need to visit the property to do a final walkthrough. Your final walkthrough will help you determine if all the repairs requested have been completed or if everything is in order about the state of the house.
This is the final day of your home buying journey. Most of the time, it is also the day you close on your mortgage. As a buyer, you will have to deal with a lot of paperwork and document signing activities.
On the closing day, the closing agent will present the seller with the sale proceeds and handover a copy of the deed to you. Generally, the closing activity takes place at the title company office.
Generally speaking, expect closing to take around a month; however, this timeline can be shorter or longer, depending on the time it takes to undergo each step of the closing process. For example, if a home inspection reveals that significant repairs need to be made, the time it takes for those repairs will add to your final timeline.
In conclusion, buying a home in Texas is a relatively long endeavor and requires total commitment to each step of the process. Each home closing timeline isn’t the same, but working with a reputable real estate agent and mortgage officer is the secret to a faster and stress-free closing period.