How long does it take to buy a house? It’s a question many people ask, especially for those who hope to time their home purchase when their rental lease is up. Or when you're closing on the sale of your old home. Or any number of other time-sensitive situations. While timing a home purchase is tricky and will vary based on a variety of factors, many experts estimate that you should expect the home-buying process to take a minimum of four months. Yet there are good reasons why buying a home is no impulse purchase. To help illuminate what's going on, here's a rundown of the various stages you'll encounter to help you time your house hunt just right.
Step 1: Getting mortgage pre-approval
Your first step should be to a lender, presuming you need a mortgage tomake your home-buying dreams happen.You’ll want to speak to a mortgage broker to start the loan process early so there are no surprises.
There are a couple of reasons for this: One, unless you're really organized, it will take you a while to gather all the documents you need to show your lender, including pay stubs and tax forms.
Two, if the lender finds out that your finances are less than ideal for homeownership—because of, for instance, a poor credit score it can take months to clean up your finances so you're in better standing.If your finances are in good shape, you can get a pre-approval which is a guarantee that the bank will lend you a certain amount of money. Having this guarantee in hand is a major asset when home shopping, because it shows sellers that you can afford their home and mean business. If your financial circumstances don't change much by the time you close the deal, you can ask a lender to extend that promise for an additional 90 to 120 days or longer; you can also lock in a great interest rate, so it doesn't rise by the time you're actually buying a home.
Step 2: Finding the right home
While looking at listing online is fun and easy, things slow down once you get to the point where you're visiting houses in person. After all, you can't just pop in whenever you want; you can visit only during an open house (often only on the weekends), or schedule individual appointments at times that work for the seller. So, in the same way you’ll have to see several homes before finding the one you love. On average, people will see about 10 houses before they make an offer, but that number can be much higher. Plus, the last thing you want is to feel rushed or make a decision in haste that you will later regret
Step 3: Closing the deal
Once you've found the right house and made an offer that's been accepted (which can typically happen in a few days), the waiting game really begins. On average, it takes around 50 days to close a loan, from the time lenders pre-approve your mortgage application to the day you sign all the documents and get the keys.
This is why getting pre-approval early is so important? In fact, securing financing is the most common holdup in buying a house. Even with a pre-approval, it can still take 30 days for the lender to conducting a home appraisal to make sure it's a good investment (since after all, the lender's money is on the line).
Meanwhile, it will also take time for you to do your own investigation to make sure the home isn't hiding some glaring flaw you'll regret inheriting. You can do this by checking the sellers' property disclosure statement for any problems they're aware of, and also hiring your own home inspector to check out the house from top to bottom for any problems. All of this takes time.
So as much as people complain about how long the home-buying process takes, the bottom line is making sure you're happy once you move in. So, when in doubt start now! If you're worried you'll find your dream house too soon, there are ways to negotiate with a seller so that it all works out.
