If you have to move to a new location and start a job as soon as possible, or you’re just eager to purchase your first home, you’re probably wondering how long it will take to buy a house.
It’s a complicated question, of course, with no one clear answer; but once you understand the processes in home buying, you may come up answer that will apply to you and your family.
The Home-Buying Process
First, take an overall look at the home-buying process. Several steps are involved, and each one entails a necessary range of time:
- Financial preparation. First, you have to make sure you have enough money, and your financial standing is solid enough to land approval for a mortgage. Depending on your financial planning position, this step could be a piece of cake … or it could last months. Among other things, you’ll need to make sure your credit score is good, save up for a down payment, and preferably, secure pre-approval for a mortgage with the lending institution you intend to use.
- The search. The actual search for a home is usually the longest part of the process. You’ll start by selecting a buying agent who can help you make an intelligent decision and show you more properties than online searches can provide. Then you’ll tour an array of homes, narrow down your list of criteria, and possibly widen your search repeatedly until you find the perfect property.
- The offer. When you identify a property you desire, you make a formal offer. Once that offer is made (and assuming it’s accepted), the home-buying process accelerates. Depending on the circumstances, you will likely enter a negotiation period with the seller, which could take a few days to a few weeks.
- The home inspection. After your offer is accepted, you’ll want to order a home inspection by a contractor you trust. Together, you’ll tour the house and note any damage that should be repaired, or structural issues that might lower the value of the house. If you don’t find anything wrong, the process moves forward. If you find problems that need to be addressed, it might take a few weeks to correct them … depending on what they are. Having to negotiate with the current homeowner to handle the repairs or lower the price of the home may add a few more days to the process.
- Formal loan approval. If you’re satisfied with the home inspection and you’re ready to proceed, you’ll seek formal approval for the loan. Several types of mortgages are available, including the fixed-rate mortgage, but most of them can be approved and filed quickly, as long as your credit is in order. Usually this happens within 72 hours, and can likely be done while you’re finishing the inspection process.
- The most complicated step in buying a home is closing. If you’re paying cash, it’s relatively simple, but this represents only a tiny minority of buyers. Instead, your closing process will depend mostly on your lender and your closing agent. Depending on your location, your closing agent may be an escrow officer, a representative from the title company, or even a real estate lawyer. The closing process varies, but generally requires a deposit of the funds for the house, a deposit of the deed, an appraisal, and a final walk-through. You may need to provide additional paperwork to verify details related to your finances, and your lender may apply special requirements before it will finalize the transaction. All in all, the closing process should take 30 days or less, unless your situation involves special considerations or hiccups arise during the process.
Next, consider two of the biggest variables in this process: financial prep and your search.
The financial preparation stage depends on your level of income, your credit score, and how much money you’ve saved. Generally, you’ll need to save at least 5 percent of a home’s value for the down payment, but you may want to save 20 percent or more to secure a better rate. If you’re living paycheck to paycheck, it could take years to save that much, but it will be worth it over the long term. Similarly, if your credit score is not great, it could take months to years of on-time payments and responsible financial behavior to bring it up to an acceptable level.
The time your search will take depends almost exclusively on you. If you have lots of stipulations regarding location, price, and interior features, it may take a long time to find a structure that suits you. If you’re open to various options, you may find an acceptable home a lot sooner. The quality of the housing market in your region may also play a significant role in the range of properties, and how soon they become available.
The Merits of Patience
If you know what you’re looking for and your financials are in order, the home-buying process can be as quick as a couple of months. But there are merits to remaining patient, and taking your time:
- More options. The longer you wait, the more houses will emerge on the market, which will give you more options to choose from.
- More experience. The longer you spend searching for a home, the more experience you’ll gain in looking at houses, and evaluating price and conditions on your own.
- More time to make the decision. Buying a home is a major financial decision, and one that you’ll want to spend significant time making. Rushing the process to a conclusion you may regret could haunt you.
If you’re ready to start the process of looking for a house, Green Residential has the perfect tool for you. Search for any area, address, ZIP code, or school system, and you’ll see a list of available properties you can use to filter out early candidates and start zooming in on your dream home.
The process is much faster when you have the right tools at your disposal.