Real Estate Law – Closing Times
Very often clients would ask me the time frame involved in closing on a real estate transaction and it varies tremendously but the general rule of thumb on a house closing anywhere from two to three months. The reason I say that because most contracts will if they have mortgage contingency clause in there that contemplates a buyer seeking financing to help them pay for a percentage of the house they’re buying that process usually takes forty five days, sometimes sixty days, sometimes thirty days it depends. The longest part of that mortgage application process is not so much submit the application and having the bank do their credit check and employment application, it involves the actual appraisal of the house then that’s part of your application process and you pay for the appraisal fee which is part of your closing cost but it takes a bank generally two to three weeks to have that appraisal done for the time they request the appraisal to the time the appraisal goes to the house, to the time the appraisal writes a report, to that time the appraisal report goes to the underwriting department of bank so it’s a two to three process and generally from that point of time there is a couple weeks until a commitment is actually issue.
So now you are in that five to six week range which is forty five days so forty five days is a month and a half and then it takes about two weeks to three weeks for the title search to be conducted and a title report issued including a new survey if necessary and all the updated searches of the municipal agencies and departments taxes. So now you’re up to two months two and a half months and if everything is clear you can schedule a closing based on everyone’s schedule you have to clear a spot if they coordinate closing with a bank attorney you have to coordinate with a sales attorney, with me the buyers attorney so sometimes it takes a week or two to schedule a closes so now you’re into that two to three month range so that’s how long it generally takes and the contract will state what the estimated date for the closing is so usually it’s between that two to three months period.
Now clients would often ask how could I speed that up, the only way that you can speed that up is if you can stay on top of the bank and push the bank to conduct their process in an expeditious fashion and the title search can be expedited to as well so that things can be done on a buyer’s end and I will say that earliest would be thirty days but now you also have to verify and make sure that the seller’s able to vacate within that period of time because it’s a chain reaction now the seller’s being forced to relocate, do they have another place that they can move to, are they using your money to buy something else and if so is that transaction in place and is the seller ready to vacate. So it’s a chain reaction, that we don’t know we deal on with a case to case basis but you can expedite things but not by that much but generally speaking it’s a two to three month process for a house closing.
Now co-ops and condominiums take a little bit longer because there is another layer involved in those transactions which is getting the co-op boards approval or sometimes the condo board have to issue certain types of approvals and with co-op which is very common in New York City you have to actually go through an application process just like a loan application process and then if you meet their criteria, the co-op boards criteria financially they schedule for an interview and the interview only occur once a month when they have this type of meetings so depending on the time frameworks when that meeting occurs, dictates how much longer the process is going to take if the approval is granted after the interview well then you’re free to set-up the closing and you can go from there within a week after that. If the co-op doesn’t approve you well then you’re back to square one because a contract in a co-op situation usually provides that if the co-op doesn’t approved you, you can’t buy the apartments and seller is required to return your down payment.