This regularly scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist. Enjoy!
Question: I’m getting ready to buy my first home and wondering how long things will take during the process. Can you explain some basic timelines I should be aware of?
Answer: Timelines vary by regional markets quite a bit due to different customs, contract structure, or local/state governance. Below, I’ll offer a quick answer to common timeline questions I get as it relates to real estate in the greater D.C. Metro area.
How long does it take to close/settle on a home after an offer is accepted?
- The median contract-to-close period in Arlington has been ~30 days since 2018, down from ~36-38 days a decade ago. Most sellers want to close as quickly as possible, so buyers who can close faster have an advantage. Be sure to talk to your lender about how long they need to close before signing off on your offer. Some bigger, national banks and credit unions often need 35-40+ days to close. Many of our local lenders can comfortably close in as little as three weeks (sometimes even faster).
How long does a seller (or buyer) have to respond to an offer/counteroffer?
- Our contracts do not stipulate a response deadline so any deadline for a response must be written into the contract or otherwise communicated by the party who wishes to set a deadline. Technically, an offer/counteroffer can go on forever if it is never responded to or withdrawn.
When is the Earnest Money Deposit (EMD) due?
- It is common for the EMD (usually 1-3% or more of the sale price) to be due to the EMD holder (usually the Title Co.) within 3-5 days of going under contract. With such a quick turn-around for a substantial amount of cash, make sure those funds are in an account that you can quickly and easily transfer (wire or check) money out of. For a reminder on what the EMD is, here’s an article I wrote earlier this year.
How long do you have to complete a home inspection and decide whether or not to move forward with the purchase?
- The game has changed lately for home inspections, which I wrote about earlier this year, but for buyers who can secure a post-contract inspection contingency, they usually have as little as two days to as many as ten days from going under contract to complete the home inspection and decide whether or not to move forward or submit their requests for repair or credit. The timing and type of inspection contingency are all negotiable terms and factor heavily into the strength of offer.
How long does the mortgage financing process take?
- As noted earlier, this varies by the type of lender you choose to work with and can range from as little as 10-14 days to 45+ days. Here’s an article I wrote earlier this year highlighting the importance of choosing the right lender.
How long does it take to have an appraisal done?
- In most cases, when you finance the purchase of your home through a lender, they require a third-party appraisal before approving the loan. In short, they need to make sure that the market value of a home, per the appraisal, is equal to or greater than the purchase price of the home (here’s the most relevant article I have, but I’ll do a deeper dive into appraisals soon). Most lenders will order the appraisal within a week of you going under contract and it usually takes a week or two for the appraiser to visit the home and submit the report, so the total time to get appraisal results back is usually 1-3 weeks depending on when it’s ordered and if it’s a rush order.
How long does the Attorney Review take?
- An Attorney Review period is common in other jurisdictions (New York/New Jersey), but not here so there is no legal review period built into our contracts. It is rare that an attorney outside of the Title Company is involved in the transaction.
How long does it take to sign paperwork at closing/settlement?
- For sellers, it often takes just 10-15 minutes and for buyers it usually takes 45-60+ minutes, depending on the size of the loan package and questions you have for the title attorney while signing.
When can you start moving into the house after closing?
- You can walk through the front door and start moving in immediately following the closing, unless otherwise stipulated in the contract.
How long can a seller rent a home back from a buyer?
- If a home is being purchased using a mortgage for a primary residence, the law states that a buyer must intend on moving into the home as their primary residence within 60 days, so the longest time a seller can rent-back (link to an article I wrote in 2019 on rent-backs) in that scenario is 60 days. If the buyer is paying cash or buying the home as an investment property, there are no restrictions on how long a seller can remain in the home after closing.
How long does the home search process last?
- This is the question everybody wants to know but there’s no good answer for. I have worked with buyers who plan on buying a home 6-12+ months from starting their search and end up finding a home they love in the first week and have worked with buyers who want to buy right away and end up spending two years searching for the right home. If I had to estimate, I would say that most buyers find a home within 6-12 weeks of starting their search.
Remember that these timelines are not fixed and vary widely by jurisdiction/market across the country and a heavily dependent on the negotiations/circumstances of the buyer and seller on a specific transaction. Use these timelines as general guidance on the customs and common practices in the greater D.C. Metro area.
If you’d like to discuss buying, selling, investing or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at 703-539-2529.
Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. 703)-390-9460.