How Long Does it Take to Buy a Home Today?
Buying a home can be a drawn out and highly involved process. Knowing how long it takes to buy a home can help set your expectations, help you avoid unnecessary delays, and minimize stress. One thing is sure: homebuying is not an activity that anyone experienced in the real estate business will tell you is geared for instant gratification. It takes time.
Here’s a general outline of how long each step takes:
- Getting pre-approved (1-5 days)
- Research (3-20 days)
- Choosing a real estate agent (1-7 days)
- Viewing homes in person (Varies)
- Making an offer (1-7 days)
- Contract to close (30-60 days)
- Inspections (7-14 days)
- Final walk through and closing (a few hours)
Now let’s take an in-depth look at each, including examples of things that could pop up and extend the amount of time it takes to close on a home.
Estimated time: 1-5 days
You may dream of buying a home, but can you afford one? If so, what's your budget? These are essential questions to answer before looking at homes in person. Unless you plan to pay with all cash, your lender decides how much you can afford based on your financial profile. They’ll take a look at your income, assets, debts, and credit score and provide you with a pre-approval letter which states how much money they are willing to lend.
Lenders want your business, so they should be pretty quick to provide a pre-approval letter. Since you’ll need to attach your pre-approval letter to any offer that you make anyway, it’s best to contact your bank and get pre-approved earlier in the process rather than later. Getting pre-approved allows you to be aware of what you can afford from the very beginning. Your time is valuable; don’t set yourself up to waste any of it by looking at homes that you can’t afford!
Estimated time: 3-30 days
Most home shoppers go into the home buying process with a picture in their head of the kind of home they'd like to buy. With your loan pre-approval done, you can now get very specific about what neighborhoods and homes will fit your budget.
Here are things you’ll now sort out:
- Do I want to live in an attached (i.e., condo or loft) or detached home (single-family residence)?
- What neighborhoods have the kind of homes I'd like to buy at the price I can afford?
- Do I have a school district preference?
- How far am I willing to commute to work?
- Am I okay with living in a deed restricted community?
These questions come pretty naturally and are important to figure out early on in the home buying process. That way, you’re able to start your home search laser-focused.
The reason why there’s such a broad estimate for this step is that everyone is different. For example, a third-time home buyer searching a market where they’ve lived for twenty years will probably make decisions faster than a first-time home buyer in a new city. This step takes a different amount of time for each person.
Choosing an Agent
Estimated time: 1-5 days
Hiring a real estate agent is a no-brainer since it’ll cost you nothing while providing numerous benefits. However, this doesn't mean that you should pick the first agent you find. You'll want to spend time searching for an experienced and knowledgeable agent who can effectively represent your interests.
Some clients prefer to reach out to an agent via texts, emails, or a phone call. This step should take no longer than a few days to accomplish.
Viewing Homes in Person
Estimated time: Variable
Now comes the fun part! Armed with your budget, preferences, and proper representation, you can start touring homes on the market that meet your requirements.
Market conditions can influence how long this step takes. In a hot real estate market, you’ll find low inventory with some homes receiving multiple offers shortly after being listed in the MLS. This can prolong your search as it will be considerably harder to find houses, let alone get your offer accepted. Similarly, if you're dead set on a specific neighborhood, it could take a while before a home in that area is put on the market.
What’s more, the events occurring in your life will influence how long you spend looking at homes. People with a major life event on the horizon (such as marriage or a new job) have an urgent need for a home and can be a little less picky. Others may be in no rush and are willing to wait a considerable amount of time until a home that perfectly matches their preferences is listed.
What is the typical amount of time people spend searching for a home? Well, a National Association of Realtors study found that “the typical buyer actively searches for 10 to 12 weeks and looks at a median of 10 homes”. However, this process could very well take months for some.
Making an Offer & Negotiating Terms
Estimated time: 1-5 days
You’ve found a home you love and you’d like to make an offer - great! Your real estate agent will write offer that incorporates your desired price and contingencies. Some of these contingencies could potentially prolong the purchase of your home. An example of this is the home sale contingency, which states that the closing of your home could be delayed in the event that your current home does not sell.
After the seller receives your contract, several days of negotiations may ensue where both parties attempt to reach an agreement. You may also be competing with other buyers if there is an active bidding war.
Contract to Close
Estimated time: 30-60 days
You are officially under contract once the seller accepts your offer. Your offer details how long the home remains under contract before you close on the home. Your method of paying for it will have a big effect on the duration of the contract to close period.
If you are financing your future home with a mortgage, then your offer will include a financing contingency. Adding a financing contingency will result in a longer contract to close period because your lender needs time to underwrite (complete their due diligence on the property and render a final decision) the loan.
Here are some estimates based upon the type of loan:
- Conventional loans: 43 days
- FHA loans: 46 days
- VA loans: 46 days
Keep in mind that these are merely estimates. A buyer with poor credit and questionable sources of income could need 60-90 days before closing on their home. Nonetheless, it’s important to consult with your loan officer about the number of days they recommend. It may be tempting to shorten your closing date beyond so that your offer is more competitive, but you risk your earnest money by doing so.
On the other hand, cash buyers do not have these constraints. They can close much faster, sometimes in a matter of days.
Estimated time: 7-21 days (while under contract)
After the seller accepts your contract, the inspection period begins. Your agent will ensure that various tasks are scheduled, including:
Appraisal - Your lender will require an appraisal to establish the fair market value of the home. Should the property appraise for a price less than what is contractually agreed, you may need to renegotiate the price with the seller. These negotiations may take several days and could push back your closing date.
Survey - If the appraisal identifies issues with the property boundaries, your lender may require further study of the lot and neighboring properties.
Inspection - A general home inspection would be scheduled as soon as possible. The home inspection can uncover defects, some of which would require additional, specialized inspections (termites, mold, etc.)
Request for Repairs – Inspections that uncover items that need repair will trigger a new round of negotiations that require the seller to fix said items or adjust the price to reflect the cost of the repairs after closing. Some repairs may take weeks to fix (e.g., a roof), which would also push back your closing date.
Final Underwriting - Your lender will not only require copies of the appraisal, inspection, and survey but also require extensive documentation about your current financial status since the pre-approval to make sure you’ve not recently blown money on a new yacht. It’s important to quickly provide any documentation that is requested by your lender so that you avoid creating any unnecessary delays.
Final Walkthrough & Closing
Estimated time: A few hours
Within 24 hours before closing, you'll conduct a final walkthrough of the premises with the listing agent. Walkthroughs allow you to double check that repairs you've requested are complete and that the condition of the property hasn't materially changed since the first showing.
Next comes closing, where you'll sign heaps of paperwork to take possession of your home. But alas, you've made it to the end! The enjoyment you will derive from your new home will hopefully supersede any of the stress generated throughout this process.
So, how long does it take to buy a house? For most, probably a few months. But for some, it could very well be six months or more. It depends on a variety of factors and differs for everyone. However, you’ll avoid unnecessary delays by staying on top of deadlines and being knowledgeable about the steps involved.