The Homebuying Timeline: How Long It Takes To Buy a House—and how to Speed Things up If you’re in a Rush
Everyone is in a hurry to buy a home right now because interest rates are climbing and could go even higher in the future. However, the process of purchasing a home cannot be rushed very easily. There are many different steps to take, and each one takes its own amount of time.
This begs the question: approximately how much time does it take to purchase a home?
From the time you start looking for a home until the time you actually close on it, the process typically takes between four and six months. Even though that seems like a long time, it could actually be shorter or longer depending on a number of different factors, such as how selective you are about where you live, how competitive the market in your area is, and a number of other things.
The process of purchasing a home in today’s market is also noticeably different from what it was even a year ago, and this may also have an impact on the timeline you have in mind. It is essential that you are aware of what to anticipate before you head in unprepared and suffer whiplash at the frenetic pace (or wonder why is this mortgage approval taking so much longer?). So before you head in unprepared, it is essential that you are aware of what to anticipate.
In order to be of assistance, we have outlined the nine primary stages that make up the homebuying process, from the very beginning to the very end, along with an estimate of how long each stage typically takes. Keep in mind that these numbers are just estimates, and that many of these steps can occur at the same time. We have also highlighted what can cause things to move more slowly, as well as what you can do to get things along more quickly if you are in a hurry.
Homebuying timeline: There are nine steps to buying a house.
1. Find a real estate agent
2. Get pre-approved for a mortgage
3. Peruse the available real estate listings.
4. Organize open house visits.
5. Make a deal with them.
6. Make an appointment for a house inspection.
7. Arrange for the residence to be appraised.
8. Ensure that your loan is accepted.
9. Finalize the transaction
1. Find a real estate agent
Average time: 1 to 2 weeks
Even though hiring a real estate agent takes almost no time at all (you meet with the agent, then sign a contract agreeing to the agent’s representation), the vast majority of real estate professionals agree that prospective homebuyers should conduct at least three interviews with different agents before selecting the one they believe will be the easiest to collaborate with.
After all, agents are not a one-size-fits-all solution; rather, they focus their efforts on particular fields and types of customers. Some people get a kick out of training first-time homeowners, while others might prefer more experienced purchasers in higher price categories. The rewards of educating first-time homebuyers can be quite rewarding.
During this time, you may also have your own preferences for an agent in terms of their personality and the manner in which they communicate.
Knowing an agent’s level of proficiency with various technological platforms is a recommendation made by Christian Wallace, who oversees real estate services for the online mortgage lender Better.
Because homes are selling so quickly, if you can’t be there on the first day but your agent can, [they can] do FaceTime or video,” adds Wallace. The reason for this is that properties are selling so quickly.” This might help you decide whether the house is worth making the trip to see in person, which can save you a significant amount of time and energy.
You will want to discover the real estate agent that is the ideal fit for you considering that the process of purchasing a property can be an emotional and even stressful experience.
2. Get pre-approved for a mortgage
Average time: 2 days to 2 weeks
A mortgage pre-approval is a document from a bank that states the maximum loan amount that you are qualified to get for a mortgage. It is not a formal promise from the lender (that comes later), but it will help you set your budget and convince sellers that you are in excellent financial condition to acquire a home. This is very important when you are trying to buy a house.
The verification of your assets by the lender is a time-consuming process that is required in order to arrive at the pre-approval figure. Having all of your paperwork ready to go is the most effective way to move this procedure along more quickly. This includes your most recent pay stubs, federal tax returns, W-2 forms, bank and other asset statements, your credit score and report, proof of employment, and a history of your residential history.
In the past, getting pre-approved for a loan before making an offer wasn’t required. However, in today’s extremely competitive market, it is almost impossible not to get pre-approved for a loan because it has become the standard practise. A letter of pre-approval demonstrates to sellers that you are serious about purchasing a home and that you have the financial resources available to complete the transaction.
The owner of Corcoran Reverie in Northwest Florida, Agent Hilary Farnum-Fasth, recommends obtaining a proof of funds letter to go along with your pre-approval letter in order to further speed up the process. You can do this by contacting Corcoran Reverie. This is a letter from the bank proving that you have sufficient liquid cash on hand to cover the down payment and any other costs associated with the transaction.
Take into consideration the fact that the majority of mortgage pre-approval letters include an expiration date of 30, 60, or 90 days. It is recommended that you negotiate for a term of ninety days so that you have a cushion in case the entire process takes longer than expected.
3. Peruse the available real estate listings.
Time range: three days to more than three months on average
Now comes the exciting part: looking through the various real estate listings. Checking a website that compiles the feeds of multiple listing services, like Realtor.com®, is the best way to ensure that you are viewing all of the listings that are currently available as well as the most recent ones. Make sure that you narrow your search by price range, location, size, number of bedrooms and bathrooms, and other amenities that are must-haves for you in order to identify the homes that are the best fit for you (e.g., a large backyard, fireplace, or home office). Check the listings every day, and create online alerts that will notify you of newly listed homes that fit your requirements as soon as they become available. Always keep in mind that time is of the importance in this incredibly cutthroat business.
You can get a really good feel for a house even before setting foot inside it thanks to the virtual tours and 3D renderings that are included in many real estate listings today. This is a tremendous time saver, and while some buyers might even be comfortable making an offer without ever having physically visited the home, the majority of buyers will utilise virtual tours as a tool to narrow down their list of potential properties to view in person. Once you have found those prospective buyers who are worthy of consideration, you should inform your real estate agent so that they may schedule showings of your home.
4. Organize open house visits.
Time range: three weeks to more than three months on average
In every state across the country, the average amount of time a home spends on the market before being purchased is just 34 days. This is significantly less time than it ever has been in the past. According to the data provided by Realtor.com, this is almost a full month less time than was available before the COVID-19 pandemic took hold. If you are house hunting in a market that favours sellers and has high demand but a limited supply of available houses, you might even see homes go under contract within a day or two of their first open house if the market is competitive.
Although she notes that “first-time buyers typically do have a longer search time for a home, and it’s because of the price point they’re typically in…. It’s a more affordable price point, [but] there’s less inventory on the market,” Jessica Lautz, vice president of demographics and behavioural insights at the National Association of Realtors®, estimates that the current average home search time is eight weeks.
It is possible that first-time homebuyers will face intense competition and be drawn into bidding wars, both of which have the potential to push up the purchase price or exclude them from contention.
“Because there is such a high demand and such a low supply, buyers may need to put in several bids and go through many transactions before actually getting into a contract,” says Heather Harrison, an agent in New York’s Westchester County. “The reason for this is because there is so much demand and so little supply.”
You can therefore increase your chances of success by being aggressive, despite the fact that there is a possibility that you will try and fail to have an offer accepted, which would put you back at the beginning and cause your timetable to become significantly longer. Have you fallen in love with a house that you saw online? Don’t put off going to see it till the weekend if you can help it. Make rapid contact with your agent and endeavour to make a personal visit to the property on the same day.
5. Make a proposal and engage in negotiations.
Time range: one day to two weeks on average
You shouldn’t have any trouble making a day-of offer on a home that you adore as long as your finances are in order and you have a document indicating that you have been pre-approved for a mortgage in your possession. Even though there is no law that specifies how long a seller has to consider an offer before accepting (or rejecting) it, the standard response time is between 24 and 48 hours.
However, a couple of days could grow into a week if the seller is reviewing various offers. This is especially true if the seller is waiting on a counteroffer from a different buyer.
You can increase the likelihood that the sellers will accept your offer by indicating that you are willing to put down a larger amount of earnest money. Earnest money is a deposit that nearly all buyers make in order to “effectively take the home off the market.” This deposit normally varies from 1% to 3% of the value of the home and is kept in an escrow account until closing. Without it, bidders have the ability to submit bids on multiple properties, placing sellers in a frantic state. After the transaction has been finalised, the earnest money is applied either toward the down payment or the costs of closing. The larger the down payment you are able to make, the more serious a buyer you appear to be to sellers. However, you shouldn’t take this action too lightly: It is possible that you will lose this deposit if the business transaction does not go as planned.
Another piece of advice is to be prepared in advance for the possibility that the seller will present you with a counteroffer. What is the highest price that you are willing to pay or the deposit that you will make? Would you be willing to sign a contract without any contingencies, such as a house inspection? In most cases, a buyer is expected to respond to a counteroffer within 72 hours, but doing so as soon as possible will definitely put you in a more favorable light and move things along more quickly.
It is likely that a contract will be signed for the property within just a few days after the seller has accepted an offer on it.
6. Make an appointment for a house inspection.
The typical range is between 3 and 10 days.
As soon as an agreement has been reached to purchase the property, you will enter what is known as the due diligence period. This is the time during which the buyer has the opportunity to make certain that everything meets their standards (and to back out of the deal if it does not).
The home inspection is the most important thing that takes place during this time. During the inspection, a qualified inspector will perform a comprehensive evaluation of the property to determine whether or not there are any problems with the home that could cost the buyer money in the future. If there are issues, the buyer has the option of negotiating a lower price or asking the seller to have the repairs completed as part of the deal, both of which will cause the due diligence period to take a significantly longer amount of time.
Some enthusiastic buyers in today’s fast-paced market are opting for an alternative that is referred to as a “walk-and-talk consultation” rather than a traditional house inspection. This might shorten the duration of time needed for due diligence to three or five days. The buyer will do a walk-through with a home inspector during such a consultation, during which the inspector will look for the most significant structural flaws that would be expensive to fix, such as a faulty foundation or an old roof that needs to be replaced. During this time, the buyer will be able to ask the inspector any questions that they have about the home.
Because doing so removes one obstacle and makes it more likely that sellers will choose their offer over those of other potential buyers, some purchasers may even contemplate dropping their home inspection contingency entirely. Despite this, the vast majority of real estate agents do not advise skipping the inspection because doing so involves taking on significant risks.
7. Arrange for the residence to be appraised.
Average time: 3 days to 3 weeks
To put it another way, an appraisal is an unbiased opinion offered by a licenced appraiser regarding the present value of a property. This is based on the appraiser going to the house and then investigating aspects such as the house’s structural issues, its size, and comparable homes in the neighbourhood. An appraisal is significant because the willingness of your lender to support the current loan terms could be affected if a home is evaluated for a price that is lower than the price that is being asked for it.
There are two methods to get around this: either put down a larger initial deposit (which will result in a smaller loan amount) or negotiate a lower purchase price with the seller. In either case, a low appraisal will make the process more time-consuming.
Because of the backlog of work for appraisers, real estate agent Hilary Farnum-Fasth has seen a delay in the process of appraising properties in the Northwest Florida market she serves. She has witnessed customers pay a premium for a rapid appraisal, which can complete the task in a matter of days and lessen the impact of this issue.
8. Ensure that your loan is accepted.
Average time: 3 days to 3 weeks
You will be in a much better position to get your actual mortgage authorized if you have already been pre-approved for a mortgage, and this second stage will go considerably more quickly because all of the necessary documentation has already been turned in (assuming your pre-approval letter is still valid).
The underwriting procedure is currently the bottleneck that causes delays. An underwriter will perform a very thorough investigation of your financial situation and credit history, in addition to examining the specifics of the property, in order to ensure that everything is in order.
Underwriting can be completed in as little as two to three days if all of your paperwork is in order and there are no major warning signs raised during the process. On the other hand, it may take longer than a week for purchasers whose assets or purchases are more complicated. Because of this, Julie Bombardo of Corcoran Premier Realty in Orlando, Florida emphasises how important it is to collaborate with a local lender.
She says, “We have a particular lender here in town, and all he has to do to get to his underwriting division is go down the elevator three floors.”
In general, the best thing that buyers can do is to respond as quickly and thoroughly as they can to any demands that come from the lender or the underwriter.
9. Finalize the transaction
Time range: two days to one week on average
You have completed the race successfully! At the point in the process known as the “home closing,” all of the parties involved in the transaction gather together to sign all of the necessary documents and formally switch ownership of the home.
In the past, it was common practice to complete and sign all of the necessary documentation in the presence of real estate agents, attorneys, and a lender’s representative. However, as of recently, in many states, closings are now able to be carried out remotely, which helps save time. “Everything is done electronically,” adds Farnum-Fasth, who is familiar with the region of Northwest Florida. Everything is handled through electronic closure businesses or through FedEx at this point.
Make sure to inquire about the possibility of a remote closing if getting your real estate transaction over with quickly is one of your top priorities.
