Why do real estate closings take a month on average, while automobile deals (involving comparable value, but much greater risk) take minutes?
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Real estate is not comparable in value to automobiles. Depending on the location, the median home price ($200,000 to $1,000,000) is 10x to 50x the cost of an average car ($20,000).
For that amount of money, the buyer and sellers want to make sure things are okay. You need to have inspections, mortgages, and title checks to make sure the transaction goes through on both ends. This takes many people with different schedules so the process can extend out to a month.
Automobiles usually have only one bank and a fairly established seller involved if you go through a dealer.
Homes usually have 2 banks (or at least 2 loans) involved. The seller has to settle their outstanding loans before the title will be released. Then, in most cases, the buyer has to finalize their loans and title transfers. In between, the banks will want to make sure there are no outstanding liens (on the property), property taxes cleared etc etc. Then there is property inspection and valuation. All of this is usually not needed for automobiles.
Auto loans are much less money (typical home costs about 10x what new car costs), much shorter terms (3-6 yrs, not 30), much more standardized collateral (a Honda Accord is a Honda Accord, while each home is super unique based on location, building size, style, etc) so it’s quicker for a bank to approve. There are also additional steps involved in home purchases that take time, like a home inspection and subsequent negotiations, home appraisal, title search, in addition to much more in depth analysis of buyers financials.
If you are buying in cash or only financing a relatively small amount of money it is possible to close a house in one sitting, especially when the house is brand new(relevant since most home sales are “used” properties and most car sales are “new”).
A lot of the time spent in the lead up to closing a house is spent verifying the condition of the house. You don’t want to buy a $300k house and then discover there is $25k worth of mold damage behind a wall that you didn’t know about(again, because the house is “used”). Conversely, in the case of selling a used car to a dealership, they have a staff of skilled mechanics that go over all the workings of the car in the 30-45 minutes you’re out test driving so they know what they can offer you. When *buying* a used car there is an implicit trust that the dealer is not lying about the status of the can, it’s in their best interest to not lie because if they get a reputation for lying no one will buy their used cars.
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