There’s nothing more exciting than signing a contract to buy your new home! But once the contract is settled, the transaction has to get to the closing table. This is when the real work – and the stress – kicks in. There are move-in dates to meet, deadlines to accommodate, and contingencies to overcome. It can be a real mess if you don’t know what you are doing, or you aren’t represented by a talented Realtor.
If everything goes well, you should close on your new home within about 45 days. But that doesn’t mean it has to take 45 days. In fact, there are things you can do as the buyer to speed up the process, and help the closing go as smoothly as possible.
The secret sauce is this: organization and preparation are the keys for a speedy closing. The homebuyer and the seller must be proactive, and remain proactive, throughout the entire process, especially if all parties are working against deadlines. Check out these other 5 factors that will help you speed up the time it take to get to the closing table as a home buyer.
1) Confidence In Your Credit (Buyers)
You should know where you stand in regard to your credit score well before beginning the home buyer’s journey. This is absolutely vital, because a higher credit score makes you more creditworthy, and saves you in interest with better loan terms over the long haul. Be 100% confident in your credit score about six months prior to beginning the home buying process.
Some tips to raise your credit score, by the way: pay off credit cards, but keep them open; and, try to see if you can pay your rent by credit card (and then pay it off in the same month).
2) Make An Offer with Your Pre-Approval
Going through the pre-approval process is a much more thorough review of your credit history, but having that letter will strengthen your offer. A homebuyer who is pre-approved in comparison with being pre-qualified will help speed up the closing process because there will be no surprises during final underwriting, which often leads to delays.
From a financing standpoint, it’s also worth mentioning that you should be working with a trusted mortgage broker who can go to bat for you if and when the banks or lender has some issue with your credit. A mortgage broker is like an adviser, shopping around the best rates and terms for you, and, they walk you through the lending process, soup to nuts. We always strongly advise working with a mortgage broker.
3) Create A Realistic Home Wish List
Although it is important to look for a home that meets all of your needs and expectations, narrow your home wish list down to what you truly want. Being able to keep an open mind is vital for successful home buyers. One of the most common issues that slow down the closing process is re-negotiations, and “mind-changing”.
So, know what you want, but trust your Realtor to guide you in what is realistic and what is not, and be prepared to make concessions. Don’t sweat the small stuff once you’ve signed your offer. If a $1,000, or $2,000 issue comes up, just handle it quickly – don’t let the dollars scare you. Remember, you’re closing on a house worth $275,000, $350,000, or $475,000. I’ll say it again: Don’t sweat the small stuff.
4) Keep an Eye Out for Homes Lingering on the Market
Homes that have been lingering on the market could be a sign that the owner is motivated to sell, or it could mean that they are holding out for a unrealistic price. You can’t do anything about a stubborn seller, but if they are motivated to sell, that creates some opportunity for you to get to the closing table quicker.
For example, you could fold into your offer a quicker close, like a 30-day close. You can work with your mortgage broker to offer this, so long as you are pre-approved. Also, if you have a motivated seller, you may want to consider offering to make a larger down payment, offer more earnest money, or offer some lending contingencies. Your Realtor should know how to do all of this.
5) Organize Your Paperwork Ahead of Time
Here’s what you’ll need to close on your new home – at least three months of bank statements, pay stubs, and letters of explanation for any out of the ordinary expenses or financial gifts being applied toward your down payment. Your mortgage broker can help you organize all of this before you make your offer.
This information will be needed to finalize the closing transaction anyway, so having it ready to go from the moment you make your offer will help expedite the closing process.
Here’s a final tip – get things to your mortgage broker or lender the instant they ask for it. Don’t let requests linger for hours or days, just because you are busy at work or home. Make fulfilling these requests your absolute top priority on a day-to-day basis throughout the entire 30-45 day closing timetable.
Many times, lenders are asking for things that prevent them from doing anything else on your file until they have it in hand. That means for every hour you delay a request, that’s an hour you are delaying yourself and the other party from the closing table.