Most people need at least a few months to buy a house. The average closing time in the U.S. is 53 days, according to Ellie Mae. But there's a lot of variation on either side of that number, especially in today's red-hot housing market.Click here to start your homeownership journey. (Feb 6th, 2023)
The demand for houses is high, which means you're competing against a lot of other homebuyers. You may have to make several offers before one is accepted, especially if you're buying in an in-demand area.
On the other hand, you might find a home faster than you expect if you get off the beaten path, literally and figuratively, and look for houses in less-popular areas or keep an open mind to fixer-uppers.
So the answer to the question "how long does it take to buy a house?" is, it depends. But understanding the steps involved can help you estimate your timeline.Click here to start your homeownership journey. (Feb 6th, 2023)
The steps to buying a home
The homebuying process plays out a little differently for every home shopper, so there's no one-size-fits-all answer when you're wondering how long the homebuying process takes.
A lot comes down to how long it takes you to find a home and get your offer accepted. But there are a number of steps that happen before and after those two, and those are a little easier to put a clock on.
Time required: Up to one weekClick here to start your homeownership journey. (Feb 6th, 2023)
Unless you're paying all cash for your new home, you should get preapproved for a mortgage loan before you start shopping for a home.
Why is a preapproval* so important? Here are three good reasons:
- A preapproval gets you organized and informed: The preapproval process prompts you to find important paperwork like your W2 forms, bank statements, and recent pay stubs. Preapproval can also show what type of mortgage loan would work best for your credit profile and desired down payment amount
- A preapproval shows your price range: Your mortgage preapproval will show how much you'll likely be able to borrow. If you find out your loan will max out at $325,000, you can stop looking at listings $500,000+ properties
- A preapproval says you mean business: A mortgage preapproval letter shows home sellers you're a serious and qualified buyer who has gained the confidence of a lender. And in today's hot markets, you'll need every competitive edge you can get
Find a real estate agent
Time required: A few days to a few weeks
With a preapproval letter in hand, you're ready to find a real estate agent. While you might be tempted to simply contact the agent who appears on a home listing, it's best to find an agent to represent you.
The listing agent is only obligated to represent the seller's interests, but a buyer's agent is 100% there for you. A buyer's agent will not only show you properties, they'll also write your offer and negotiate for you.Click here to start your homeownership journey. (Feb 6th, 2023)
Working with a buyer's agent won't cost you anything, because the seller pays their commission. So do yourself a favor and find a real estate agent you trust.
Check Google reviews and ask friends and family for recommendations of agents they worked with to buy their house.
Remember, you don't have to work with the first agent you meet. Call a few different agents and ask about their areas of expertise. How long have they been in this market? What types of clients do they typically work with?Click here to start your homeownership journey. (Feb 6th, 2023)
Ideally, you'll find a real estate agent who often helps people in circumstances similar to yours find homes. Some agents may focus on luxury properties, while others work primarily with first-time homebuyers, singles, or young families.
If you can find an agent who works with homebuyers similar to you, they may have a better instinct for the properties and neighborhoods that will suit your needs - not to mention be able to empathize with your hopes and concerns.Click here to start your homeownership journey. (Feb 6th, 2023)
Related reading: Why Finding a Real Estate Agent Savvy in VA Loans Matters
Start looking for homes
Time required: A week to several months
Some buyers need only one or two days to find the right home. Others shop a year or longer before making an offer.Click here to start your homeownership journey. (Feb 6th, 2023)
Unless you have a shortlist of available homes, budget at least a month for vetting properties.
You can find homes in several different ways:
- Drive around neighborhoods: Spend time driving or walking around neighborhoods in which you'd like to live. Scope out For Sale signs and Open Houses so you can get a sense of what's available in the area
- Search online: You can check the Multiple Listing Service (MLS), Zillow, or other homebuying sites in your area. Try setting up search parameters so you'll receive alerts about homes you'd like to see.
- Ask your real estate agent: Tell your real estate agent your must-haves in a home so they can set up showings for potential dream homes as soon as they hit the market
|Here's a tip for shortening your homebuying timeline: Make a list of your must-haves and check out a range of properties online before you schedule home showings. Look at pictures, take virtual tours when available, and really consider which properties match your priorities.|
Some homes are fun to look at and daydream about what you could do with them. But in today's market, when houses move quickly, you only want to schedule showings at properties that are serious contenders for your future home. The more clarity you have on your wants and needs, the more targeted your search will be, and the faster you may be able to find the right place.Click here to start your homeownership journey. (Feb 6th, 2023)
That's why it helps to know the neighborhoods you're considering as well. Drive around, take walks, talk to people who already live there. Check out the local amenities - how far is the nearest grocery store or coffee shop? What types of restaurants and shops will you have access to? If you have kids, are there schools, parks, and playgrounds nearby? If you commute to work, how long does it take you to get there and how bad is rush hour traffic from where you might live?
Getting answers to some of these questions before you see a property can make it easier to make a quick decision about whether a home is right for you.
Learn more: How to Buy a House in 11 Steps | 2021 GuideClick here to start your homeownership journey. (Feb 6th, 2023)
Make an offer
Time required: One to two days
When you've found your dream house - and it's within your budget - you're ready to make an offer.
Your offer doesn't have to match the listing price (what the seller is asking), but you should always use market data to back up the price you're offering to pay.Click here to start your homeownership journey. (Feb 6th, 2023)
A real estate agent can analyze the market and show you sale prices of comparable homes nearby to help you decide on a number that aligns with local property values and that the seller is likely to accept.
You can offer below the listing price, though in 2021, it's a seller's market and many buyers are offering well above asking. If your offer is too low, the seller might not even consider it.
But if you offer above asking, know that your lender will not let you borrow more than the home's appraised value. If an appraiser decides the property is worth less than what you've offered, you'll have to make up the difference from your savings or back out of the sale.Click here to start your homeownership journey. (Feb 6th, 2023)
Now is the time to consider other terms as well. Do you need help paying closing costs? If so, consider offering a higher sale price in exchange for help with closing costs.
|Here's a tip: You can strengthen your offer by including a due diligence deposit. The due diligence fee essentially makes it worth the seller's while to accept your offer.|
Once they accept and you go under contract, they cannot show the home to any other buyers. The house remains on the market while the inspections, appraisal, and title search are underway and you decide if you want to move forward with the sale.
This is a risky time for the seller because the longer the home is listed, the less desirable it appears to other homebuyers. If you back out of the sale, they may have a more difficult time attracting buyers, or they may end up with a lower sale price.Click here to start your homeownership journey. (Feb 6th, 2023)
The due diligence deposit compensates the seller for that risk. Any due diligence money you put down gets credited toward your down payment and closing costs. But if you back out of the sale, the seller gets to keep that money.
Negotiate and go under contract
Time required: Two to three days
Let's say your offer gets the seller's attention. They can either accept it as is, or they can make a counter-offer. In that case, let the negotiations begin.Click here to start your homeownership journey. (Feb 6th, 2023)
You can either accept their counter, or you can counter back. If your original offer was $300,000 and the seller countered with $320,000, you might ask to settle on $310,000.
But again, in a highly competitive market, you may not want to go back and forth too many times. Sellers may have a number of offers right now, so you want to find the sweet spot that you're comfortable paying and that is still attractive to them.
When you and the seller agree on terms, you'll go under contract. The contract outlines the terms of the purchase agreement, including the sale price, the due diligence period, and the sale date.Click here to start your homeownership journey. (Feb 6th, 2023)
You'll also want to include any items you want the seller to leave on the property. If you want them to leave a refrigerator or certain furnishings, you can request that in your offer and negotiate it into the purchase price.
Sellers aren't obligated to accept those terms, and they may intend to take certain appliances or furnishings with them. But your real estate agent can contact the listing agent to find out if those items are on the table to include in the sale.
Deciding on your due diligence period
Your real estate agent can advise you on how long a due diligence period to request, and what you need will likely depend on the condition of the home.Click here to start your homeownership journey. (Feb 6th, 2023)
If you buy a brand new house, you might be comfortable with a two-week due diligence window to accommodate the appraisal and a general inspection, since you're likely not worried about older systems breaking down or problems with the roof or foundation.
But if you're buying an older home, or one that's been unoccupied for some time, you may want to ask for up to a month as your due diligence period. This is your opportunity to learn as much as you can about the home before you commit to the purchase.
So if you're looking at a home with old systems or not much is known about them, you may want to have specialists come out and take a look, and you want to give yourself a long enough due diligence period to do that.Click here to start your homeownership journey. (Feb 6th, 2023)
Earnest money deposit
When you make your offer, you might also commit to paying earnest money - another deposit that'll go toward your upfront costs when you close on the home.
The earnest money shows the seller you have skin in the game. It is refundable if you decide to back out of the sale due to problems with the property.
But the seller can keep the earnest money deposit if the house doesn't close on time or the sale doesn't go through due to negligence or other issues on your end.Click here to start your homeownership journey. (Feb 6th, 2023)
Closing on time is hugely important, which is why you need to work with a lender that has a record of fast, on-time closings. The terms of your sale contract are bound by the agreed-upon closing date. If you miss it, the seller can walk away with your money.
Schedule the appraisal and inspection
Time required: One to two days (to schedule)
Your lender will schedule the home appraisal, and you'll pay the fee as part of your closing costs. Appraisals are usually around $500. Buyers don't attend the appraisal, so this part is pretty hands-off for you.Click here to start your homeownership journey. (Feb 6th, 2023)
The appraiser will write up a report and send it to the lender, who will send you a copy as well. Although the appraisal itself happens in a few hours, it can take up to a couple of weeks before the report comes back.
In the report, the appraiser gives the value of the home, as well as notes on the overall condition of the property, whether it conforms to the neighborhood style and aesthetics (important for determining the home's fair market value), and how it compares to comparable sales in the area.
The appraisal is required by the lender. A home inspection is not required - but you should get one anyway.Click here to start your homeownership journey. (Feb 6th, 2023)
Home inspection: A home inspector will assess the major systems and structural elements of the home, including heating, plumbing, the roof, and the foundation. They'll also identify signs of water damage and pest infestations, and they'll make sure all of your major appliances and electrical systems work as well.
You don't want to buy a house without an inspection. The inspection can reveal critical issues with the property that may cause you to walk away from the sale. It's disappointing when that happens, but it's better to find out about any hazards or major expenses now rather than once you've signed the contract and are officially responsible for the home.
With the current market as busy as it is, you may not be able to get an inspector out to the property for a week or more. Call around to different companies, as some may have more availability than others.Click here to start your homeownership journey. (Feb 6th, 2023)
The earlier in the due diligence period you can get the inspection done, the sooner you can decide whether you need specialists to come out for additional inspections or to give estimates on the work that needs to be done.
If you want to negotiate with the seller on repairs, you must submit that request during your due diligence window, so schedule inspections and estimate as early as possible.
Close on the home (sign final documents)
Time required: 1-2 hoursClick here to start your homeownership journey. (Feb 6th, 2023)
During your due diligence period, your lender will be processing your loan. They may ask you for additional documents, such as tax return transcripts, pay stubs, and bank statements, to support your loan application.
A few days before your closing date (which will be listed on your sale contract), you'll receive your closing disclosure. This document includes all the details of your loan: the sale price, how much you're borrowing, the total amount you'll pay for the loan (including principal and interest over the life of the loan), and the "cash to close," which means how much money you need to pay upfront.
Your cash to close includes your down payment and closing costs, minus any earnest money or due diligence deposits.Click here to start your homeownership journey. (Feb 6th, 2023)
Once you receive your final closing disclosure, you will contact the title company or settlement agent that is managing your closing to find out where to wire your down payment and closing funds. You may also have the option to bring a cashier's check to the closing.
On your closing date, you'll spend an hour - give or take - signing your loan documents. These include the promissory note for the mortgage, an acknowledgment that you received the closing disclosure, a release of your tax return information, legal statements affirming your name and identity, and a number of other key forms.
And then, you are officially a homeowner!Click here to start your homeownership journey. (Feb 6th, 2023)
However, you may not get your keys for another few days. After you close, the settlement agency must record the new ownership information with your town or municipality. That can take a few hours, so if you close toward the end of the day, recording may not happen until the next business day.
Your lender also needs to fund the loan. As with recording, if you don't close until the end of the day, funding may take a few more days. Ask your lender beforehand what your funding date will be so you can plan accordingly for scheduling movers and packing up your current home.
How to avoid delays when you buy a house
On your journey to homeownership, you'll need persistence but also patience - and a little bit of hustle.Click here to start your homeownership journey. (Feb 6th, 2023)
Home sellers in 2021 are getting dozens of different offers within hours of listing their homes for sale. That means you need to move fast when you find a home you want.
Getting preapproved is essential to doing that. If you get your offer accepted but then don't qualify for a loan, you'll lose out on the home and potentially on your due diligence money.
Besides, it takes time for a loan officer and underwriting team to go through your documents to determine whether you qualify. And time is of the essence once you go under contract.Click here to start your homeownership journey. (Feb 6th, 2023)
When you get preapproved, you have to submit financial documents and proof of income and employment, so you've already cleared some hurdles by the time your offer is accepted and your loan is processed.
How to avoid delays in the due diligence period
Pick your battles: Not every problem with a home is a big problem. Yes, safety or structural problems could be deal breakers. But smaller concerns, such as bedroom paint colors or light fixtures, are changes you can make after closing.
Reply immediately: When a seller responds to your offer, send your answer right away, even if it's a weekend or a holiday. Sellers who don't hear back after a while may move on to someone else's offer. Respond to your loan officer's requests for more information right away, too - at least within a business day.Click here to start your homeownership journey. (Feb 6th, 2023)
Stay flexible: If a home inspector has an immediate appointment that isn't convenient for you, re-arrange your schedule if at all possible. Otherwise you may have to wait two or three more weeks for another appointment.
Find lenders with fast turnaround times: Not all lenders work at the same speed. Compare turnaround times, along with rates and fees, as you shop multiple lenders.
How long does it take to buy a house FAQs
How long does the house buying process take?Click here to start your homeownership journey. (Feb 6th, 2023)
The amount of time you'll need to buy a home depends on a lot of variables, but the average time from loan application to closing is around 50 days according to mortgage software company Ellie Mae. Factors that affect your homebuying timeline include how competitive your local market is, your due diligence period, and your lender's closing times.
How long does it take from offer to completion?
Expect the loan process to take at least a month, though in many cases, it can take up to 60 days or longer. Some homebuyers close in less than a month, though you'll need to work closely with your lender to find out whether that is a possibility for your scenario.Click here to start your homeownership journey. (Feb 6th, 2023)
There are many variables to consider after your offer is accepted, including ordering the appraisal and inspection and waiting for those reports to come back, as well as the title search. Ensuring those are completed in under a month may be more difficult.
How long does the closing process take on a house?
The average closing time - from loan application to signing the final documents - was 53 days in May of 2021, according to Ellie Mae. That's seven-and-a-half weeks, so you should anticipate that the process will take between one and two months