As a first-time homebuyer, you may be wondering how long the process of buying a home actually takes. The answer to this question can vary greatly, depending on a number of factors. However, by understanding the different steps in the home-buying process, you can get a better idea of how long it may take for you to buy your dream home.
Please note that the timeframes mentioned in this article are just averages, and that certain steps in the process may take longer or shorter depending on the individual's situation.
In this article, we will outline the basic steps in the home-buying process, such as budgeting, house hunting and the closing process, as well as some of the factors that can affect how long it takes to buy a home. So, let's get started!
Stages Of Buying A Home
Buying a home should be a fun and exciting adventure, however, many people are understandably intimidated by the entire process. A key part of overcoming that intimidation is by being as prepared as possible. Reading this guide will give you an overview of the purchasing process and hopefully, help ease any worries you may have.
Making a down payment is often one of the biggest challenges that homebuyers face. The average percentage of a down payment is generally 20%. The timeline for accumulating the funds for a downpayment is exceptionally unique and varies from buyer to buyer. Some common ways to help save up for a down payment include:
- Cutting back on expenses
- Taking on extra jobs or side hustles
- Saving money from each paycheck
- Investing in a high yield savings account or CD
- Receiving a gift or loan from family or friends
Find An Agent (1-10 days)
When you're ready to buy a home, it's important to find a qualified real estate agent who can help you through the process. An experienced agent will be able to provide valuable insights and advice and will have connections to lenders, inspectors and other professionals who can help make the buying process go more smoothly.
Finding the right agent can be tricky, so it's important to do your research and interview several agents before making a decision. Ask friends and family for recommendations, or check online review sites to see what others have said about local agents.
Get Pre-Approved (5-8 days)
A pre-approval is a document from your lender that proves you are eligible for a loan to make the purchase of your home.
- Though a pre-approval is not an actual loan commitment, it is a good indicator of how much you will be able to afford.
- You will need to provide some preliminary financial documents to the lender in order to get pre-approved for a home loan. Documents typically required include:
- A recent bank statement
- Your most recent pay stubs
- Your tax returns from the past two years
- A list of your current debts and obligations
- A copy of your credit score
Go Shopping For Your Home
While house hunting can be fun, it's important to remember that it's also a serious financial venture. It's crucial to take your time in this stage and not rush into anything.
Be sure to tour several homes and compare prices, features and neighborhoods before making a decision. And don't forget to factor in your budget when browsing for a home. There is no need to get discouraged if you can't find the perfect home within your budget - just keep looking!
When looking for your new house, be sure to ask yourself some important questions to help narrow down the search. These can include:
- How many bedrooms do I need?
- Is the size of the lot important to me?
- What are my must-have features?
Again, because every situation and need will be unique, this process can take anywhere from days to weeks or even months.
Make An Offer (1-7 days)
Once you have found the perfect house, it is time to start the negotiation process. When making an offer on a home you will need to include a certain amount of information. This will include:
- The amount you are offering to purchase for
- The amount of your downpayment
- The closing or completion date
- Any conditions (home inspection, financing clause)
This may feel like a stressful step in the purchasing process, however, your real estate agent will be handling all the negotiations on your behalf. They will deal with and communicate your offer to the purchasers or their agent, taking the responsibility off of you. They will also be there to guide you through counter-offers and the like.
Get Final Mortgage Approval (3 days-3 weeks)
Once your offer has been accepted by the sellers, it is time to finalize your mortgage approval. At this time your lender will want to officially apply for your mortgage and request final documents from you. Documents typically required include:
- Photo ID
- Proof of income
- Proof of Social Security number
- Details about your down payment including its source and amount
- Information regarding the house you are wanting to buy
Once you have submitted these final documents, the lender will perform a final review to determine if they can extend a mortgage offer to you.
Get A Home Inspection (3-7 days to schedule/2-3 hours to inspect)
While not every lender will require you to get a home inspection, it is still a vital part of the purchasing process. A home inspection is an evaluation of the structural integrity and systems within your new home. This process is important to ensure that you are not buying a complete money pit, which could be quite costly in the long run.
A reputable inspector should provide you with their findings in written report form, detailing any problems they may have found during the inspection. It is wise to request a second inspection if you are unsure or uncomfortable with what you are being told.
Get A Home Appraisal (Up to 5 days to schedule/1-3 hours for appraisal/Up to 5 days for report)
Your lender will require a home appraisal before they finalize the mortgage. A home appraisal will tell the bank or mortgage company what the value of the home is appraised for, ensuring they are not overlending when giving you the loan. An appraisal is generally completed by an appraiser contracted by your lender, who will come in and assess the value of your home based on the comparables within the neighborhood.
Insurance (Up to 2 weeks)
There are 2 types of insurance that you will need to obtain when purchasing a property.
Title insurance is important because it protects you from any liens or other disputes that could come up after you buy a house. It is a type of coverage that prevents a buyer from being financially harmed if something wrong happens with the title to their property. No matter how careful buyers are, there's always the chance of some kind of issue cropping up after they purchase their home.
Home Owners Insurance
Home insurance is also a requirement to secure a loan. This will cover the lender, and yourself as a purchaser in case of a fire, flood or other incidentals. Home insurance can also provide liability coverage in case someone is injured on your property. You can choose what type of home insurance best fits your needs and budget, as well as shop around for quotes from different companies.
Now that you are getting closer to your purchase date it is time to get your finances ready. If you are pulling money from investments you will want to have everything in order so the funds are available for your closing date. If receiving a gift from family, you will want to make sure they know when you will need the money by.
Final Walk-Through (1 hour)
A final walk-through is when the purchaser has the opportunity to view the property a final time before the official closing. During this process, you will want to reexamine the home and look for any issues or damage you didn't see at the time you agreed to purchase it. If anything does arise, your realtor will be able to assist you with contacting the purchasers and rectifying the situation.
The grand finale! The final step in the home buying process is closing. All of your paperwork will now be finalized, and you will receive the keys to your new property. Since lenders are not open for business on weekends or late at night, most closings occur between 9 AM-5 PM Monday through Friday.
Even though it sounds like a lot of steps, there is generally a lot of moving parts at once. Between the scheduling of inspections, getting your finances in order and finalizing everything before closing, it's important to stay on top of your game and keep track of what still needs to be done. Having a timeline to reference can help make the process feel less daunting.
If all goes well, the purchasing process to purchase a home can take anywhere from 30 to 60 days, with the average being around 45. Of course, there are always extenuating circumstances which can affect the process, however, this should give you a rough guideline to go off of.
We hope that this article has been helpful in outlining the home buying process. We wish you the best of luck as you go through this exciting time and remind you to always consult with your realtor for more specific advice or questions.