Question About Closing and Home Inspection for New Construction

Hi all, I have gotten a lot of good info from these forums and have recently put a deposit on a new home.  I was curious to know when escrow generally closes for new construction.  Does the 30 day escrow start when the house is complete or do you plan it so you start escrow when the builder gives you the 60 day window when the house will be done?  I?m just curious because I was wondering if the home appraisal would need to be done after the house is complete for accuracy or is it done while in final phases of construction?

Any help for what I should expect later in the process would be appreciated!

Good evening Garmin,

Lots of questions and I'll try to 'splain.
No. There is too much, let me sum up.

Escrow opens when all parties have signed the purchase agreement and (your) funds have been received. Congratulations, it sounds like you're in escrow!

It typically takes ~6 months for builders to complete new construction homes. So depending upon when they started building your home, it should be about 6 months from that point.

The home appraisal is ordered by your lender near the very end of the purchase.

Hope this helps!
-IR2

Here's a quick summary of the new home process...

- Get loan pre-approved by the builder's lender (aka gatekeeper) to get one the wait list
- Pick you lot and drop off a check with the builder to reserve it
- Within 2-4 days the builder will have you sign the purchase agreement (either in person or via docusign)
- Builder will send the executed purchase agreement to the corporate office for sign off and then over to escrow
- Escrow then deposits your check and opens escrow (part of your down payment)
- You select upgrades through the various upgrade stages at the builder's design center where you'll provide additional deposits for the upgrades (part of your down payment)
- Within 45-60 days of closing you'll want to shop around for a loan and select your lender
- You'll have a chance to do walk-throughs where you can have a home inspector do home inspections (pre-dry wall, post-dry wall, final walk-through)
- Builder will give you a firm closing date once you are within 30-45 days of closing
- Appraisal will be completed within a few weeks of closing
- Escrow will contact you to sign loan documents (if you are financing the purchase) and will provide you the estimated closing statement which will tell you how much you will need to wire over to escrow to close on the purchase
- You will close on the purchase the day that the lender funds the loan and be able to pick up the keys from the builder that day by 4-5pm

USCTrojanCPA said:

Here's a quick summary of the new home process...

- Appraisal will be completed within a few weeks of closing
- Escrow will contact you to sign loan documents (if you are financing the purchase) and will provide you the estimated closing statement which will tell you how much you will need to wire over to escrow to close on the purchase
- You will close on the purchase the day that the lender funds the loan and be able to pick up the keys from the builder that day by 4-5pm

Click to expand...

Great information.  Thank you both!  Everything has gone exactly as stated here, my only question: Is the home appraisal done after the home is completely finished?  All upgrades installed, water running, etc?  I understand the appraiser needs all the information for an accurate appraisal and at the same time, the developer doesn't want a finished house to be sitting too long.  Or is it that the appraisal is one of the last things done and if it comes back adequate, the loan can fund pretty quickly where closing can occur on time?

Thanks again for your help!

Garmin said:

USCTrojanCPA said:

Here's a quick summary of the new home process...

- Appraisal will be completed within a few weeks of closing
- Escrow will contact you to sign loan documents (if you are financing the purchase) and will provide you the estimated closing statement which will tell you how much you will need to wire over to escrow to close on the purchase
- You will close on the purchase the day that the lender funds the loan and be able to pick up the keys from the builder that day by 4-5pm

Click to expand...

Great information.  Thank you both!  Everything has gone exactly as stated here, my only question: Is the home appraisal done after the home is completely finished?  All upgrades installed, water running, etc?  I understand the appraiser needs all the information for an accurate appraisal and at the same time, the developer doesn't want a finished house to be sitting too long.  Or is it that the appraisal is one of the last things done and if it comes back adequate, the loan can fund pretty quickly where closing can occur on time?

Thanks again for your help!

Click to expand...

The appraisal is done after all of the upgrades are done, including the flooring, so it'll be within about a week or two before closing so it is one of the last things done.  The appraiser don't turn on the utilities.  I've done dozens of new home purchases and none of my buyers have had an issue with the appraisal getting done on time or had the appraisal come in below the contract price.  So it's almost a formality. 

USCTrojanCPA said:

Garmin said:

USCTrojanCPA said:

Here's a quick summary of the new home process...

- Appraisal will be completed within a few weeks of closing
- Escrow will contact you to sign loan documents (if you are financing the purchase) and will provide you the estimated closing statement which will tell you how much you will need to wire over to escrow to close on the purchase
- You will close on the purchase the day that the lender funds the loan and be able to pick up the keys from the builder that day by 4-5pm

Click to expand...

Great information.  Thank you both!  Everything has gone exactly as stated here, my only question: Is the home appraisal done after the home is completely finished?  All upgrades installed, water running, etc?  I understand the appraiser needs all the information for an accurate appraisal and at the same time, the developer doesn't want a finished house to be sitting too long.  Or is it that the appraisal is one of the last things done and if it comes back adequate, the loan can fund pretty quickly where closing can occur on time?

Thanks again for your help!

Click to expand...

The appraisal is done after all of the upgrades are done, including the flooring, so it'll be within about a week or two before closing so it is one of the last things done.  The appraiser don't turn on the utilities.  I've done dozens of new home purchases and none of my buyers have had an issue with the appraisal getting done on time or had the appraisal come in below the contract price.  So it's almost a formality.

Click to expand...

Excellent.  Thank you very much!  You have just taken a huge load of stress off my back!

Garmin said:

USCTrojanCPA said:

Garmin said:

USCTrojanCPA said:

Here's a quick summary of the new home process...

- Appraisal will be completed within a few weeks of closing
- Escrow will contact you to sign loan documents (if you are financing the purchase) and will provide you the estimated closing statement which will tell you how much you will need to wire over to escrow to close on the purchase
- You will close on the purchase the day that the lender funds the loan and be able to pick up the keys from the builder that day by 4-5pm

Click to expand...

Great information.  Thank you both!  Everything has gone exactly as stated here, my only question: Is the home appraisal done after the home is completely finished?  All upgrades installed, water running, etc?  I understand the appraiser needs all the information for an accurate appraisal and at the same time, the developer doesn't want a finished house to be sitting too long.  Or is it that the appraisal is one of the last things done and if it comes back adequate, the loan can fund pretty quickly where closing can occur on time?

Thanks again for your help!

Click to expand...

The appraisal is done after all of the upgrades are done, including the flooring, so it'll be within about a week or two before closing so it is one of the last things done.  The appraiser don't turn on the utilities.  I've done dozens of new home purchases and none of my buyers have had an issue with the appraisal getting done on time or had the appraisal come in below the contract price.  So it's almost a formality.

Click to expand...

Excellent.  Thank you very much!  You have just taken a huge load of stress off my back!

Click to expand...

Happy to have helped.  Good luck on your new home purchase.