How Long It Takes To Buy A House: A Purchase Timeline From Preapproval To Closing
Victoria Araj8-minute read
May 16, 2021
Whether you're crammed into a home too small to meet your needs or living with your parents, you may daydream about owning your first, or next, home. The search for a new home may seem like a long and overwhelming journey – maybe so daunting that you find ways to avoid taking the first steps. But the truth is, buying a house doesn’t have to be as long of a process as you may think.
Let’s take a look at how long it will really take.
How Long Does It Take To Buy A House, On Average?
The good news is, depending on your location and finances, you could be in a new home in 5 – 6 months. It’ll take less time if you’re buying a home with cash. It might take a little longer if you’re buying while selling your current home.
Better news still – you can take steps ahead of time to shorten that period. Best news yet – you can do most of the work from your couch.
Let’s take a closer look at the steps to buying a house. But first, here’s what you should do before you even start looking to ensure a streamlined and efficient process.
Before You Start Looking For Your Next Home
There is plenty you can do to prepare yourself for house hunting to shorten the time it takes to own your next home.
Organize Your Finances
If you do need a mortgage, before you step foot in an open house, take a cold, hard look at your financial situation. Depending on how you manage your finances, you might sail through this step in a day or two. Here’s what you need to do:
- Find your credit score and review your credit report.
- Save for your down payment and closing costs.
- Avoid new debt, which will raise your debt-to-income ratio.
- Organize your paperwork. You’ll need your W-2s, tax returns, bank statements and pay stubs to get preapproved.
Figure Out Where You Want To Live
While you're getting your financial history sorted out, figure out where you want to live. Consider your lifestyle and do your research. Talk to friends and family about what they like and don’t like about where they live.
Buying A House Timeline
While you can likely expect to spend about a combined 6 months finding a home, getting a mortgage and closing on your property, you’ll want to leave some wiggle room, as this timeline can vary depending on your personal circumstances.
Let’s take a closer look at how much time you’ll likely spend at each point in the process.
Step 1: Get A Mortgage Preapproval (About 1 Week)
You’ll need a preapproval before you start shopping for a home. Your lender verifies your income and checks your credit history and current debt to determine how much home you can afford when you apply for a preapproval. Your lender then issues you a letter with an official estimate of how much of a loan they’re willing to offer you.
Your preapproval letter indicates you’re serious about buying a home. Agents and sellers know you won’t have trouble getting a loan after you find the perfect property. Your preapproval letter helps you to strengthen your offer when you find the right home.
Don’t confuse the terms prequalification and preapproval. A prequalification is useful when you’re in the early stages of buying a home and trying to figure out a budget, but you’ll need a preapproval when you’re shopping for a new home.
Applying for a preapproval usually doesn’t take much time. Many lenders allow you to apply for a loan online in as little as an afternoon. Make sure you answer all your lender’s questions, submit all required documentation and respond to phone calls and emails in a timely manner. It’ll ensure the speediest preapproval possible.
At Rocket Mortgage®, we offer Prequalified Approval, which gives borrowers a good idea of how much home they can afford. We verify a home buyer’s credit score by pulling their three-digit FICO® Score and report. We ask prospective borrowers for a verbal verification of income and assets and determine their DTI.
To make an offer, prospective home buyers will need Verified Approval, the next step in our Power Buying Process, where a home buyer submits documentation to get a Verified Approval Letter. This process can be completed within 24 hours.
Step 2: Shop For A Home (About 3 Months)
The longest part of the buying process is often the hunt for the right home. Expect to spend around 3 months finding the perfect property.
If you’ve done your homework and understand what you’re looking for, you can avoid wasting time looking at properties that won’t work for you. But don’t be afraid to take as much time as you need. The last thing you want is to rush into debt for a home that you don’t love later.
Work With An Agent To Speed Up The Process
The best way to fast-track your shopping process is to work with a real estate agent. Real estate agents are local professionals who are experts in the market and the home buying process. A real estate agent can help you find homes in your budget and narrow down your search. They can also help you submit a strong offer and speed up negotiations.
Save Time By Looking For Red Flags
Keep your eyes open for red flags in the home that might cause time-consuming and expensive problems later. Some issues you should look for include:
- Plumbing or electrical issues: Flip all the home’s light switches and test the outlets. Make sure the sinks and toilets don’t leak and that all drains clear correctly. These can be expensive issues to fix later. The earlier you know about them, the better.
- Carbon monoxide, lead paint and radon: Make sure you remember to ask your real estate agent for the results of these three tests when you tour every home. If not, you can order them as part of your inspection.
- Full or defective gutters: Defective gutters can allow water to pool toward the base of your home and degrade the home’s structural integrity. Spot this problem early to avoid a massive repair bill later.
Step 3: Submit An Offer And Negotiate (About 1 – 2 Months)
Your real estate agent can help you make an offer when you find the right home and you’re ready to buy. An offer letter lays out the terms of the sale and includes details like the price, closing costs you want the sellers to pay and any repairs you need made before closing. Your real estate agent will handle the job of writing your offer.
When the sellers receive your offer letter, they have three different options to proceed:
- Accept the offer: The sellers can accept your initial offer. This speeds up the home buying process significantly and allows you to immediately begin closing.
- Reject the offer: The sellers may reject your offer. At that point, you can either submit a new offer or move onto other properties.
- Make a counteroffer: A counteroffer is a return offer that differs from your original one. Most counteroffers increase the sale price, reject closing credits, remove conditions of the sale or any combination of these. Let’s say your sellers give you a counteroffer – the ball is in your court again. You can accept the offer, reject it or make another counteroffer.
As you might expect, these negotiations can go on for a while. Ask your real estate agent to speak to the sellers or the sellers’ agent to speed up the negotiation process. Your agent may come back with some valuable information that allows you to tailor your offer and receive a faster acceptance.
Step 4: Prepare For Closing (About 1 Month)
Get ready to close on your mortgage loan when you reach an agreement with your sellers. Most lenders require 30 – 45 days to finalize the details of your loan and to make sure your home meets your loan’s minimum requirements. Your lender will schedule an appraisal and underwrite your loan during this time. You should also order a home inspection before your close.
Let’s look at each of these steps in a little more detail.
An appraisal is a professional estimate of how much your home is worth. Mortgage companies require that you get an appraisal before you can get a loan. This is because the appraisal ensures that the lender isn’t giving you more money than your home is worth. The appraiser who visits the home will always be an independent third party who can ensure a fair market assessment. It might take some extra time to find an appraiser if you live in a very remote area.
Your lender verifies your income, assets and debt to make sure that you qualify for a loan during the underwriting process.Once your lender finishes underwriting your loan, the underwriter can deny your loan or issue you your final mortgage agreement.
Most of the underwriting process happens behind the scenes. Your lender will check your credit report and comb over your bank statements. You usually won't need to participate in the underwriting process if you've submitted all the correct documentation.
Your lender may contact you for more information or to submit more documentation. Respond to all inquiries quickly to ensure a timely closing.
A home inspection isn’t the same thing as an appraisal. An appraisal only gives you a rough estimate of how much a home is worth. An inspection gives you information about what needs to be repaired or replaced. Most mortgage lenders don’t require inspections as a condition of getting a loan.
You should still order an independent inspection on your own time. Look over your inspection results for major issues. Most offer letters include clauses that allow you to modify your purchase agreement if the inspection unveils a large, hidden problem with the home. You may need to return to the negotiation table with the seller if your inspection does reveal a major issue with the property.
Step 5: Close On Your Loan (About 1 Week)
It’s time to close once your appraisal clears and your lender finishes underwriting your loan. Your lender will first issue you a document called a Closing Disclosure. This document outlines the final terms of your loan, including your APR and what you must pay in closing costs.
Read over your Closing Disclosure and acknowledge that you’ve read it with your lender. By law, your lender must give you at least 3 days to read your Closing Disclosure before the closing meeting.
After the 3-day window passes, your lender will schedule a closing meeting. You’ll sign your loan papers, pay your down payment and closing costs and take control of your new property. You can ask any last-minute questions about your loan agreement.
You’re officially a homeowner after you finish up your closing meeting.
Summary: You Could Be In A New Home Sooner Than You Think
Most buyers can expect to spend around 6 months purchasing a home. It will usually take about a week to get your mortgage preapproval after you apply, and you’ll spend around 3 months looking at properties. It may take you between 1–2 months to negotiate an offer with the seller depending on your local real estate market. From there, it will take around a month for your lender to finalize your loan and another week to schedule a closing meeting.
Remember, buying a home is a personal process that differs for everyone. Some people spend less than 6 months buying a home and others spend much more going through these steps. Don’t rush yourself to fit into the 6-month timeline if you know you need more time to make a commitment.
And when you’re ready to buy a home, talk to a Home Loan Expert to get started.
Get approved to buy a home.
Rocket Mortgage® lets you get to house hunting sooner.
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