How long does it take to close a house in Phoenix when buying or selling a home?
When it comes to selling a home, buying or closing on a home, one of the major headaches can be time. 2016 National Association of Realtor Profile of Home Buyers and Sellers have highlighted that the average buyer typically searched for 10 weeks and looked at a median of 10 homes before closing a deal. You may ask: “How long does it take to close a house in Phoenix?”
Naturally, as part of the closing process it is the buyer’s lender to determine the length of time required to process the loan and close. Which means the lender plays an important role that cannot be overlooked.
Suggested: Flow Chart of Real Estate Transaction on Arizona
A buyer and seller can agree a closing date in the purchase contract, but if the lender is unable perform during that time window, it does not really matter which date is selected, because it’s not going to close on the date the buyer and seller specify. It will close when the lender is ready to close. Be sure to check with your lender before making an offer to make sure that the lender is able to perform with the closing date to avoid any delay.
What could delay the closing process of buying or selling a property?
Other than lender unable to perform, there are numerous reasons that could affect and delay the closing process of buying or selling a home. A buyer or a seller of a property cannot be absolutely sure a deal is done both parties sign the closing documents and the property is recorded with the county.
Suggested: What is the Timeline when Buying a Home in Arizona?
The term escrow is the 30 or number of days agreed between seller and buyer in a purchase on a property being accepted and the keys handed over. During this time there may be many hurdles to overcome for both the buyer and the seller which could cause delays or putting them back to square one. Here are some of the most common problems that buyers or sellers could encounter through this period and what can be done if possible to prevent them.
Termite or Pest inspection
Most mortgage lenders in the US requires to have a pest inspection carried out on the property to make sure there is no serious damage. Termites and carpenter ants can quickly eat through wood leaving it infested and unstable. The cost of pest inspections to the property buyer is usually around $100 or less. This will protect the lender’s interest within the property. It’s also in the best interests of the buyer to have a termite inspection carried out. After all, buying a property however large or small, is a major investment.
Suggested: What is a Contingency when Buying a Home in Arizona?
Appraisal
Lender will have a property appraised in order to protect their investment. The lender want to make sure the home is worth at least what the buyer is paying for it so losses can be recouped if anything untoward happens. The rule of thumb is if an appraisal comes in too low, the seller will have to reduce the asking price or the buyer will have to pay cash for the difference. When this situation arises get a second opinion from a different appraiser.
Suggested: What is an appraisal when buying a house in Arizona?
Getting cold feet or the seller backs out
An established Realtor® will make sure there is a contract in place outlining justifiable reasons for the buyer or seller backing out of the deal without a penalty. This could include not waiving a contingency or not meeting a deadline. If the buyer decides after waiving the contingency that they don’t want to go through with the purchase, maybe because they have found a better property, the earnest money will be lost. This will compensate the seller for the time their home was off the market. Alternatively if the seller decides to back out because he or she has a change of heart or a better offer was made for the property, the buyer has the legal right to collect damages from the seller.
Financing
Real estate experts have highlighted that one of the main reasons for property deals fall through is that buyers do not get pre-approved for finance. Making an offer for a property without getting financial pre-approval can be a major mistake. It’s surprising how many buyers do not acquire a written loan commitment from a bank or a mortgage lender before presenting an offer. In the same vein, sellers should not accept offers from potential buyers who have not been approved for finance from the relevant sources. This can lead to the closing process being at risk especially if the buyer is not qualified for mortgage. If interest rates increase sharply, a buyer loses their job or their credit score goes down their property offer could be in jeopardy.
Home isn’t insurable
If home seller has made a major insurance claim in the past on their property such as water damage or mold, this should show up on insurance records. Some insurance companies may refuse to insure a property if it is too much of a risk. At the end of the day, if a home is not insurable a buyer won’t be able to make an offer unless they are paying cash, as lender requires home insurance.
How to avoid delay in closing
To reduce the times frame, buyers can speed up the process by:
- Knowing exactly what they want in a house
- Working out how much they can afford
- Asking a realistic price for a property
- Choosing a recommended real estate agent
- Acquiring a suitable mortgage lender
- Hiring an escrow officer who is dedicated to finalizing the closing process as quickly as possible
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
Phoenix AZ East Valley New Listings Homes for Sale
Search and view your dream home your way
You can now be alerted as soon as a Phoenix property matching your criteria hits the market. Be one of the first to see new listings. Simply type in everything you want in a house and save your search here to be notified.
