Owning a house is a dream of every couple starting a family. House ownership comes with a sense of pride and security. A house is not just four walls and a roof for shelter. It becomes a home and part of a family’s legacy passed down from one generation to the next.
If you are now house-hunting or about to start, you are likely asking, how long does it take to buy a house? That depends on several factors.
The home buying process begins with putting your finances in order. That involves a closer look into your income, expenses, and future spending. Once you know those numbers, you should consult with a mortgage broker or lender to get pre-approved for a home loan.
The pre-approval process will typically only take a few days, during which the mortgage broker or lender will review your credit and income. They will then let you know the highest amount of mortgage you qualify for. That amount, coupled with your down payment, will give you the price of the homes you can afford. Your search should be limited to homes near or under that maximum price point.
Another major factor affecting your home-buying timeline is the inventory of homes for sale. If you’re in a seller’s market, the inventory of homes is limited. That could mean dozens of prospective buyers putting offers in one home. That could prolong your house hunt.
In this article, we’ll go through six home-buying steps to help prospective buyers answer the question: How long does it take to buy a house?
Step 1: Get Pre-Approved for a Mortgage
A mortgage pre-approval isn’t a guarantee for a home loan. However, it does establish your
financial readiness to secure that loan. In other words, the mortgage pre-approval sets you up to find a qualifying loan company to put that loan together quickly.
What is mortgage pre-approval?
A mortgage pre-approval serves as a written confirmation from a mortgage lender that you meet the initial criteria for the mortgage amount you’ve applied for. This determination is made after thoroughly evaluating your credit history, credit scores, income, and assets. Consider a pre-approval as your early green light in the home loan process.
Why is mortgage pre-approval important?
Being armed with a mortgage pre-approval letter puts you in a different class of home buyers. It signals to all the sellers you might encounter that you’re well-equipped to secure a home loan.
That instantly sets you apart from potential buyers who lack this essential credential. That distinction becomes especially vital in competitive real estate markets.
When you get pre-approved for a mortgage from multiple lenders, it boosts your chances of getting your home offer accepted.
How to get pre-approved for a mortgage
Ensuring a smooth pre-approval process starts with careful preparation on your part. Since pre-approval is a more comprehensive evaluation than pre-qualification, aligning your finances is paramount before taking the plunge.
Start by examining your credit score. That number will significantly influence a lender’s decision for your future loan. Services like CreditWise® from Capital One or Experian’s free credit monitoring can help you gauge your credit health. While you may not see the exact score mortgage lenders use, it provides a glimpse into your credit standing.
Next, assemble the documentation that will give lenders insight into your financial profile, encompassing debt, income, assets, and various aspects of your finances. Having the following items ready is a good starting point:
- Two most recent pay stubs
- Tax returns from the last two years
- Bank statements from the past 60 days
- Employment verification documents
- Contact information for your employer
- A comprehensive list of your debts
- Statements from investment accounts, including 401(k) and IRA
- Proof of rental payments or landlord details
- Gift letters, if you receive funds for your down payment
It is vital to have all your paperwork in order before applying. A proactive approach minimizes the need for protracted back-and-forth exchanges with your lender. That will cut down on the time for how long to buy a house and streamline the pre-approval process.
Step 2: Find a Real Estate Agent
When you begin your quest to find a new home, you’ll want to build a team. Your real estate agent is one of the most important players on that team.
What does a real estate agent do?
An experienced real estate agent, whether you’re working with them as a buyer or a seller, brings a wealth of knowledge and expertise to the table. That knowledge begins with an intimate understanding of the local landscape. Beyond property values and recent sales, they should be well-versed in the finer details of neighborhoods, school districts, and more.
Your real estate agent is also your go-to source for information. Your realtor should be prepared to answer your questions, especially if you’re a first-time buyer. From explaining the nuances between “pending” and “contingent” to explaining the necessity of title insurance and disclosure forms, your real estate agent is your primary resource person.
Communication is key throughout the entire home buying process. Your real estate agent is your bridge between the two sides of the transaction. Your realtor maintains open lines of dialogue with the other party’s agent, facilitates negotiations, and keeps everyone informed about the deal’s progression.
Buying or selling a home is often an emotionally charged journey, and a compassionate agent offers encouragement, a dose of reality, or a comforting shoulder to lean on when needed. As the closing date approaches, your agent provides updates and eases anxieties that may arise.
How to choose a real estate agent
You could work with your real estate agent for several months or longer. You want to choose an agent you feel comfortable with and who you trust. Start your search by seeking referrals from friends and family.
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You can take a more hands-on approach by personally exploring your local housing market. As you tour potential neighborhoods, look for recurring agent names on real estate signs. That is especially true for signs with the coveted “sold” indicator.
Another on-the-ground tactic is attending open houses. These events allow you to assess a potential agent’s engagement with prospective buyers and provide an opportunity for personal interaction.
Step 3: Start Shopping for Homes
The actual search is a primary factor that will determine how long does the home buying process takes. Many start their home-buying journey by browsing online real estate search websites. At first glance, you might be overwhelmed by all the potential choices. There is nothing wrong with clicking “save” on all your choices. Once you have a “saved” list, it’s time for a closer look.
What to look for in a home
The first thing you’ll notice on any home is the price. Focus on the homes you can afford. Aside from the price, here are some of the elements you need to look for in a new home:
- Neighborhood – The adage “location is everything” rings true for your new home and its potential resale value down the road. Do comprehensive research about the area. Look into schools, transportation access, and proximity to shopping, restaurants, and parks. Also, consider job opportunities and flood zone risks. You want to look at everything that might influence the home’s long-term value.
- Home Size – Size, both in terms of bedrooms and bathrooms, as well as storage space, plays a pivotal role in ensuring your new home will meet your family’s needs. Equally crucial is the home’s floor plan. Is it functional? Does the square footage fit in with your lifestyle and future remodeling plans? Also, remember to examine the garage and the level of storage space it provides.
- Home Exterior – While inspecting the interior, don’t neglect the home’s exterior. A close examination of the foundation, roof, siding, and yard can reveal essential insights. This thorough evaluation will reveal necessary repairs and maintenance that will affect the home’s price.
- Home Systems – Pay attention to the home’s HVAC, electrical, and plumbing systems. These systems are the lifeblood of your daily comfort. Look beyond paint colors and focus on the functionality of these essential components.
- Signs of Damage – Look for signs of damage, both inside and outside the property. Take note of foul odors, water damage, mold, and potential electrical issues. Structural concerns can manifest as significant cracks along walls or ceilings.
- Future Renovations – Consider the potential renovation needs of the home, from minor updates like flooring and paint to more extensive projects such as kitchen remodels or room additions. These considerations will help ensure your new home aligns with your expectations.
How to Make an Offer on a Home
When you make an offer on a home, it is presented in a purchase agreement. That is a comprehensive document outlining several critical elements.
These elements include the purchase amount you’re willing to pay, any contingencies you wish to impose, a breakdown of associated fees, a proposed closing date, and a specified timeframe within which the seller must respond.
Among the various contingencies at your disposal, these are the commonly requested ones:
- Home Inspection Contingency – The home inspection contingency signifies that your offer is contingent upon the property passing a rigorous home inspection. Should any issues arise during the inspection, the buyer typically opts not to negotiate further.
- Appraisal Contingency – Once the seller accepts your offer, your mortgage lender will conduct an appraisal to determine if the proposed price aligns with the property’s market value compared to similar homes. If the appraiser finds the price to be outside an acceptable range, you retain the option to withdraw your offer.
- Home Sale Contingency – When you sell your existing home, this contingency stipulates that your offer depends on successfully selling your current property within a specified timeframe.
Step 4: Get the Home Inspected
The home inspection is a pivotal part of the home buying process and is one of the factors affecting the home buying timeline. Neglecting this crucial step could result in financial repercussions and unnecessary complications.
What is a home inspection?
You get a home inspection typically after the negotiation of a house contract. The buyer hires a licensed home inspector and coordinates an inspection appointment for a thorough assessment of the property. Some real estate agents may facilitate this process on behalf of their clients.
At the scheduled appointment, the inspector conducts a comprehensive examination of the property’s interior and exterior. Inspectors diligently search for any indications of foundation issues, water infiltration problems, mold growth, or deferred maintenance.
The inspection extends to pest-related concerns, like termite infestations. They will also examine the HVAC, plumbing, and electrical systems. In some regions, they may even conduct radon tests if necessary.
Why is a home inspection important?
A home inspection is similar to test driving a new car. It is the best way to see if your purchase meets your needs. The results of the inspection can determine the final price for the home. It will also reveal what issues you might have to take on as the new homeowner.
What to do if the home inspection finds problems
After the inspection, you’ll receive a comprehensive report detailing the home’s overall condition. If the inspector finds serious issues, you will have the opportunity to negotiate with the seller. These discussions may revolve around the seller addressing the identified problems or reducing the sale price to accommodate the necessary repairs.
In cases where the seller commits to making repairs, scheduling a follow-up inspection is advisable to ensure that the work has been carried out correctly. That way, you’ll have peace of mind as you progress in your home-buying journey.
Step 5: Get Mortgage Approval
An all-cash offer on a home means the buyer will pay for the property upfront with cash. All-cash offers are common, but most homes are still purchased with a mortgage loan.
What is mortgage approval?
One of the tips for making home buying go smoothly is to have mortgage approval from an accredited lender. When approved, the lender will pay the homeowner, and you will begin paying the lender the agreed amount for the loan.
How to get mortgage approval
After identifying a lender, you must prepare all the necessary documents they need. These include bank statements, employment contracts, tax returns, and credit reports.
Upon completion of the application, the underwriting phase starts.
The underwriter primarily assesses four key criteria:
- Your credit score and history
- The down payment amount
- Your existing monthly debts
- Your employment and income history
Other factors, including assets, may also be considered during the underwriter’s assessment. While strength in one area can sometimes offset weakness in another, specific mortgage programs adhere to strict rules that lenders cannot bend.
Step 6: Close on the House
The “closing” represents the final stage in buying a home. Also referred to as “settlement,” the closing gathers all parties involved in the mortgage loan transaction to execute the requisite documents that will solidify the deal.
What happens at closing?
Depending on your location, the closing ceremony can transpire in different formats. All parties can gather and sign the documents together. Alternatively, the process could unfold over several weeks, with each party contributing their signature separately.
Some companies offer the option of electronically signing documents even before the closing date. In certain instances, the closing can be done via mail or even online.
When do I get the keys to my new home?
You will be given the keys to your new home when you close on the house, and all the documents are signed and notarized.
Common Questions
What is the longest part of the house buying process?
The longest part of the house buying process is typically the search. That is where prospective buyers dedicate time to looking for the right property that meets their needs. This phase can vary in duration depending on market conditions, the buyer’s specific requirements, and the availability of suitable homes.
How long is the process of buying a house?
For most well-prepared buyers, it will take approximately 30-45 days to find their house, depending on marketing condition and timing, and another 30-60 days to close on the transaction. That means a typical home buyer will be in their new house within 90 days from start to finish. That timeline can vary depending on market conditions, location, financing, and the buyer’s specific requirements.
Get the Home Buying Process Started Today
If you’re in a hurry to buy a home, kickstart your search with a mortgage pre-approval. Completing this step before house hunting accelerates your progress once you find the right home.
Also, be prepared for flexibility if you need to purchase a home urgently. Real estate contracts often involve contingencies, such as buying the home after repairs are done, which can lengthen the process. Negotiations with the seller may also require time as both parties come to terms. One of the most effective tools to have in your home buying arsenal is information. The more you know about what to expect in the buying process, the better off you’ll be.
