While every market varies, three to four months is the standard time it takes find a home and have an offer accepted. Once your offer is accepted, it takes an average of 30 to 45 days to close on the home, from filling out and submitting your mortgage loan application to arriving at the closing table. On closing day, you can expect to spend about one to two hours signing the final paperwork.
In total, the home buying process can typically last anywhere from three to six months. This is just an estimate. Some buyers find a home faster, others may experience a longer time frame. Read on to discover the steps of buying a house and how you can be best prepared to help speed up the process.
Start with the financing
Before you begin shopping for a home, it is important to get your financing in order. Start by searching for a reliable lender. Working with a trusted lender is vital—it is not as simple as finding the best possible interest rate. You want to ensure the customer service is great, too. If you can not get the financing, or if it does not go through in time, that great interest rate will not mean much if you miss out on buying the home you truly want.
Once you have a solid preapproval, it will indicate how much you can afford and determine your price range. Avoid doing anything that may jeopardize your financing during this time, like buying a car, opening new credit cards, or even changing jobs. When in doubt, contact your loan officer for guidance before taking actions that may impact your finances.
Do your research
Being well-educated on the housing market can help prevent you from having unrealistic expectations and can assist you in finding a trustworthy realtor. You should take steps to learn the type of market you are stepping into. Seller's markets result in limited homes selling within days of listing, and in a scorching market you will need to have a plan in mind so you can view homes as soon as they are available. When real estate is red hot, bidding wars will occur, so it may be wise to look into less expensive homes or other areas you may not have considered.
In a buyer's market, look into how long properties have been on the market and how much sellers are willing to negotiate. While you do not have to be a real estate expert, becoming familiar with the market and its trends makes for an easier shopping process.
The real estate agent you choose has a huge impact on your buying experience as well. Having a realtor that you can trust can make the difference in getting the home you want. More experienced agents may not be as readily available, but they will have better negotiating tactics when it comes to determining things like low appraisals or who will handle repairs after the home inspection occurs. New agents, while lacking overall experience, will have more time to assist you through every step of shopping and purchasing. Overall, choosing a good realtor will help keep the home-buying process moving.
At the end of the day, the more you research and understand, the more prepared you will be to ask the right questions and make informed choices.
Organize your financial documents
If you are a first-time homebuyer or have not been in the market for a home in a while, the amount of information you need to provide may come as a surprise. Every aspect of a borrower’s income, credit profile, and assets is thoroughly examined with careful attention to detail. Even after submitting the main documents required to an underwriter, it is likely they will follow up with more questions and additional requests. Be sure to keep a flexible mindset. It is possible you will be providing information and documentation more than once right up until a few days before you close.
After applying for a mortgage, you will receive a list of needed documents. Provide your lender with whatever is needed right away. Once you begin the home buying process, be sure to keep your information in two different locations—one on your computer and the other as printed hard copies. Be sure to carefully save each file in an easy-to-read format. That way, if there is anything you need to resubmit, it will be easy to locate.
Then it is time to shop
As you start looking at homes, keep in mind that no matter how great the property looks online, you should make time to see it in person when possible. Keep a list of your non-negotiables such as location or home type top of mind. If you are open to looking at every type of home, no matter the location, you could be pleasantly surprised to find more options available that you may not have previously considered.
Once you are in escrow
Once your offer has been accepted, congratulations! The clock starts ticking once the contract is signed—you will most likely have 30 to 45 days to close. Many states do not require a home inspection, but it is a good idea to get one regardless. It will give you the means to understand what issues may need to be addressed right away as well as expenses that can crop up down the road.
Then comes the appraisal. Once you have a completed home inspection and appraisal, you may opt to negotiate with the seller. Let us say the roof will not last more than two years—in this case, your lender may choose not to lend more to help with the costs. This is where choosing a professional realtor comes back into play, as they will need to negotiate with the sellers’ agent to determine who pays for the cost of repairs or a new roof.
It is vital to stay in constant communication with your loan officer during this time period. Be ready to get them whatever information they need as soon as they ask for it. Do not pack away important paperwork, like W2s or taxes, that you may need to resubmit.
To help lessen your stress throughout this process, if you rent, do not give notice to your landlord until the keys to your new home are in hand. You may have to pay an extra month’s worth of rent, but it ensures a roof over your head should the closing be delayed for any reason.
At the end of the day, doing your research, understanding the market, and having your expectations in check will go a long way to lessen the pressure of the home buying experience. Along with choosing a good lender and realtor, you can set yourself up for a smoother process that gets you into your new home as soon as possible.
