Buying & Selling Houses

How Long Does It Really Take to Close on a Property? [With Video!]

Expertise: Real Estate Investing Basics, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Landlording & Rental Properties, Business Management, Personal Development, Flipping Houses, Commercial Real Estate
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As a real estate investor it is super important that you understand the process of closing the sale of a property. Whether you are buying a single-family home or multifamily property, you need to understand and navigate the process of closing on that property.

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Just like in sports, you always want to be on the offense during this process instead of the defense. You need to understand what to expect during this process so you can set yourself for success and actually get to closing!

Getting to Closing

Contrary to those proclaiming that they’ll close on an offer right away, this isn’t possible. The truth is, it takes a while to close real estate deals. Today we’re diving into how long it really takes to buy a house (or any type of property, really).

These are generally the steps that are taken when it comes to closing. But depending on your schedule and if you’re willing to take some risks, you’re able to skip some steps. But for the purpose of this article, I’m just going to take you through all the steps of getting to closing.

1. Offer and Acceptance

This means that you made the offer and it got accepted. But you aren’t under contract until you have a signed agreement of sale from both parties and the deposit has been received. And by received I mean a third party representing the seller—like their attorney or real estate broker. Once this is done, the clock starts ticking.

2. Inspection Period

This is where you go into the property and verify it reflects what the seller told you about it. This is you doing your due diligence to ensure what you’re buying really is what you intended to buy. The inspection period plays into all types of investing: multifamily, commercial, single-family, etc. You want to make sure the property is in good condition, reflects the listing, is zoned properly, and so on.

The inspection involves a physical inspection, but also any other due diligence you need to do. If for any reason the property doesn’t meet your expectations, you can renegotiate or cancel the contract. This period lasts 15-45 days, with the norm being 30 days.

Related: What Investors Should Know About the Home Inspection Process

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3. Title Search

This step occurs concurrently to step No. 2. A title search when a title company verifies that whoever claims to own the house actually does. This search will also make sure the deed is clean and doesn’t have any liens or encumbrances, as well as making sure the deed holders paid their taxes and so on.

All kinds of things come up in a title report, which shows how clean the title is. It will show a title commitment to you, the buyer. Remember that this stage is done by a third party (title company) where they do all kinds of investigating. This stage takes typically 30 days.

4. Bank Underwriting You

This stage is where the bank reviews your financials, tax returns, bank statements, etc. This is the bank approving you as a borrower. If you’re buying a single-family home that you’re going to occupy, this can also be called getting pre-qualified.

If you’re buying a rental property and not an FHA-mortgaged home, the bank is unlikely to begin this process until you’re under contract. They won’t want to spend their time on you until they know you’ve landed a deal.

This process can take anywhere from 45-90 days. It all depends on the bank and their process. In most cases, the bank won’t outright tell you it could take 90 days, but be prepared for it.

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5. Bank Underwriting the Deal aka Appraisal

This is where you get loan approval. This doesn’t necessarily cost you a lot of money since it’s an application fee. But if you’re buying a commercial building, it will cost you more. Depending on the bank, they may do environmental impact studies (such as a Phase 1 Analysis). They may also send out an inspector to do a thorough inspection. (FYI, this will cost you.)

Usually, this process takes about 30 days. What some investors do in this stage (if they want to close the deal fast) is underwrite the deal before they’re pre-approved by the bank. This can then tighten the timeline.

Note: If you’re buying a small multifamily property, some investors don’t like to do this step (since money is coming out of their pocket) until the due diligence period is over, instead of letting the steps overlap. 

Related: 7 Simple Steps to Get Approved for a Conventional Real Estate Loan

6. Cure Period

This phase has a lot to do with what has taken place in the earlier steps. Maybe the property didn't appraise for what you thought, the bank found you owe a contractor $10,000 for work done two years ago, or the property isn't zoned correctly—whatever it may be. This stage uncovers things that need to be cured, hence the name.

This period needs to factor in all the potential issues with the property, the seller, or you. The cure period can affect any of these steps at any time. Depending on the issue, it could increase the timeframe for closing.

In Conclusion…

After all is said and done, the timeline to close on a property amounts to 60-90+ days. I’ve seen a lot less and a lot more. As of this writing, I’m undergoing a deal that has so far taken eight months to close. There were environmental issues and the is bank taking its sweet time.

Though the norm is 60-90+ days, be prepared for it to take longer. Or, I’ve given you ways to condense this timeline if you wish. But now you know the reality of closing a real estate deal.

What are other surprises that can come up during this process, and how do you navigate all of this? 

Share with a comment below!

Matt Faircloth, co-founder and president of the DeRosa Group, is a seasoned real estate investor. The DeRosa Group, based in historic Trenton, New Jersey, is a developer and owner of commercial and residential property with a mission to “transform lives through real estate." Matt, along with his wife Liz, started investing in real estate in 2004 with the purchase of a duplex outside of Philadelphia with a $30,000 private loan. They founded DeRosa Group in 2005 and have since grown the company to owning and managing over 370 units of residential and commercial assets throughout the east coast. DeRosa has completed over $30 million in real estate transactions involving private capital including fix and flips, single family home rentals, mixed use buildings, apartment buildings, office buildings, and tax lien investments. Matt Faircloth is the author of Raising Private Capital, has been featured on the BiggerPockets Podcast, and regularly contributes to BiggerPockets’s Facebook Live sessions and educational webinars.

    Nickie Harden
    Replied 23 days ago
    great knowledge thank you
    Grant R. from Warsaw, IN
    Replied 21 days ago
    Good advice. A ton of banks in my area (including locations of national chains) verbally say "...less than 30 days." In reality, most of them take closer to 40 days on the fast side. Thanks for sharing the info with the community!
    Kimberley P. Investor from Huntington Beach, California
    Replied 8 days ago
    This is not accurate everywhere. I’ve been a real estate investor in California for 15+ years. It is not unusual at all to close escrow in 30 days where a bank is involved or 5-7 days where no bank is involved. I guess we just do things faster here.