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How Long Is The Home Buying Process? | Dwellful

Dec 21, 2021 12:49:52 PM

If you drive up to an open house with a sack full of cash, you can probably cut a few corners in the home buying process. But for the majority of us, buying a home includes finding a buyer's agent, researching to find the right property, minimizing purchase risks, and securing financing. 

How Long is the Home Buying Process

There’s no cookie-cutter length of time or a home buying timeline involved in every house purchase, but there are standard ranges that we can anticipate for each step in the journey. Plus, there are also ways to reduce time by preparing well in advance for what will be asked of you. 

Let’s take a look at the steps involved in buying a home and how long you can expect each step to take.

What are the 8 Steps to Buying a Home?

Understanding the home-buying process is critical to estimating the time involved for you as a homebuyer. We’ve broken the key stages of purchasing a house into eight essential steps below, with the average time it takes for each. 

  1. Prepare your finances.
  2. Define your dream home.
  3. Get pre-approved for a mortgage.
  4. Find a trusted buyer’s real estate agent.
  5. Go house hunting and make your offer(s).
  6. Obtain final mortgage approval.
  7. Conduct a home inspection.
  8. Close on your new home!

How Long is Home Buying Process Infographic

#1: Pretty Up Your Financial Picture

If you're purchasing your first home, you might be looking for some first time home buyer tips that will aid you in the process. But whether you're a first time home buyer or this is your fourth home, finances are an important aspect of home buying. Mortgages aren’t one-size-fits-all; whether a lender will offer you a loan, and under what terms, depends on how rosy a picture your financial details can paint. If you look like a risky bet to pay back a loan, you’ll be faced with limited lender choices and a higher interest rate—this can cost you thousands of dollars. 

You’ll be evaluated on your: 

  • Credit score (over 740 for best interest rate; minimum 620 for traditional lenders)
  • Debt-to-income (DTI) ratio. Lenders look for a ratio of no more than 28% for the mortgage or 36% total
  • Current assets, ideally enough to cover down payment, closing, and emergency fund.
  • Work history documenting income for the past two years.
  • Income forecast, including proof of current employment

Plan early, and do what you can to improve your credit score and DTI ratio before applying for a mortgage.

How Long Does This Step Take? 

Financial preparation is something to begin at least six months before a home purchase, but do what you can if you have a shorter time frame.

#2: Dream Your Dreamy Dreams

Whether you’re approaching this house purchase as a practical matter or have a “My Perfect Home” scrapbook under your bed, you need to be able to communicate what you’re looking for. That can include everything from kitchen fixtures to location or neighborhood requirements. 

Put these items in writing (and edit until you’re happy): 

  • Your must-have features – Must-haves are exactly what they sound like—must haves. If a home doesn’t check your boxes on this list, it’s a no to the property.
  • The would-be-great-to-have features – These items aren’t deal-breakers, but they’ll add weight to a decision one way or another.

If you’re buying with a partner, make sure you’ve invested the time to agree on these lists. You’ll rely on them to help establish a shopping approach with your agent and to help you make critical decisions when it comes to making an offer or negotiating.

How Long Does This Step Take? 

This one’s all on you, but the sooner you make your lists—and check them twice—the easier it’ll be for you to find what you’re looking for.

#3: Choose the Right Mortgage

While you’ll have to apply for approval with a potential lender, remember that you’re the consumer in this transaction. Before comparing lenders, focus on what type of mortgage loan will work best for you. These include: 

  • VA loan
  • USDA loan
  • FHA loan
  • Conventional loan
  • Jumbo loan
  • Renovation loan

You’ll also need to: 

  • Decide between a fixed-rate or an adjustable-rate (ARM) mortgage 
  • Set the length of your loan, generally either 30-, 20-, 15-, or 10-year terms
  • Obtain a letter of pre-approval before you start shopping

How Long Does This Step Take? 

Once you’ve done your research and made some decisions, pre-approval usually takes a few days to a week. The letter of pre-approval should be effective for 60 to 90 days.

#4: Connect With a Buyer’s Agent

Once you’ve chosen your mortgage, it’s time to find a qualified real estate agent to assist you with the home buying process. Finding the right agent for you can make a huge difference in the experience and end results. Look for an agent who can provide: 

  • Local expertise including the specific neighborhoods you’re targeting
  • Detailed competitive analysis reports of properties you’re interested in
  • Calm, clear, and timely communication to provide guidance and answers 

When it comes to working with a real estate agent, the process of narrowing down the right home is typically what takes the most time. Generally, this takes about 6 months to a year, though an expert real estate agent should speed up the process because of their experience with house hunting. The agent will be responsible for helping you make an offer on your potential new home, as well as handling negotiations. Overall, a quality buyer’s agent should be able to find the right property based on your needs, negotiate a deal, act as a liason for the paperwork, and walk you through any questions along the way.

How Long Does This Step Take? 

If you're looking for how to find a buyer's agent, you can cross this step off your list today using our agent finder technology. Dwellful will introduce you to a qualified agent in just a few minutes.

Note that a real estate agent must wait to gain commission after closing costs are finalized, which typically takes about a month. This is so that lenders can have time to finalize details of the home loan before appraisals and home inspections. Overall, finally closing your new home is a mutual win-win for the agent and the new home owner after months and months of hard work!

#5: Shop Until You Drop an Offer

Work on a viewing plan with your agent that takes into account: 

  • Your price range, preferred locations, and needs/wishes lists
  • Price correspondence to needs (can features be added to a lower-priced house?)
  • The current speed of the market, so you don’t miss out on houses snapped up quickly

When you’re viewing homes, take photos, text notes to yourself, or even take some video or audio recordings to help you recall important details. Don’t feel that you need to settle on a house you see in the first week, but also take advantage of the viewing process to fact-check your wish list against houses in your price range. 

How Long Does This Step Take? 

On average in the U.S. right now, home buyers shop around for 4 ½ months and submit four offers before signing a purchase agreement. Once you decide to make an offer, contact your agent immediately and get the ball rolling; this is a seller’s market and you may be competing with other buyers’ offers. An offer usually has a 24- to 48-hour deadline to respond (as will their counter-offer if they negotiate).

The timeline for making an offer can also depend on how you want to pay--sometimes cash and a proof of funds letter may be even quicker than waiting for a loan approval. A cash offer may speed up the closing process because there are fewer contingencies and less risk of a financial fall out. It is an attractive option for the seller because cash reduces the amount of paperwork and documentation. Regardless of how you decide to purchase, a quality real estate agent will assist home buyers on their journey. Once your offer is accepted, celebrate! You’ve made it through the longest part of the process, and just a few more steps to go.

#6: Lock Down Your Mortgage

While you’ve already made a mortgage plan and tentatively selected a lender, you need to convert that pre-approval into an actual loan that makes it through the final underwriting stage. 

You can also re-evaluate and switch lenders or renegotiate terms at this time. If not, let your lender know you’ve submitted an offer and work with them to formalize a loan under the pre-approval terms. 

Once again, you’ll be in a forest of paperwork, but your financial readiness and pre-approval steps should help set you up for this stage. Finalizing a mortgage also entails: 

  • An appraisal on behalf of the lender
  • Conducting a title search
  • Securing homeowners insurance (and potentially other hazard coverage depending on where you live, like flood, earthquake, or wind insurance). 

How Long Does This Step Take? 

Escrow refers to the time between signing a purchase agreement and finalizing the sale. This is usually a 30- to 45-day period, or longer for a VA or FHA loan.

#7: Don’t Skip the Home Inspection

True or False? If your father-in-law considers himself handy and is willing to do a walk-through, go ahead and save your money instead of hiring a professional inspector. 

Definitely false! 

A home inspection by a skilled professional is a critical step that you should insist on. Look for a home inspector who’s worked for years as a general contractor or in another hands-on position with deep construction knowledge. Once scheduled, it’ll take at least a few, and often several, hours. 

After an inspection, you'll walk away with a binder of findings that serves both as a critical part of your final decision-making and as a planning tool for the maintenance and repairs to your new home.

If the inspection produces new information, you can negotiate repairs, replacements, or even a price drop with the seller. 

How Long Does This Step Take? 

The home inspection should also occur during escrow, which as noted above is from purchase agreement signing to closing day (often within 30 or 45 days). It’s usually required under the purchase agreement to take place within 10 days of signing, with an additional deadline noted for any post-inspection negotiation.

#8: Close on Your New Home

If all goes well, you’ll show up at your scheduled closing to sign and initial a ream of papers, receive the keys, and maybe pop a bottle of champagne to celebrate closing on your new house. 

While you don’t want to rubber-stamp your signature on these critical documents, your lender will send you a full copy of the paperwork (the closing disclosure) during the week before closing. Read and review them carefully, and address anything you don’t understand with your agent or lawyer. Bring the files you’ve vetted with you to closing to compare to the originals before signing off. 

You’ll also do a final walk-through of your new home on or near closing day to confirm everything is as it should be. 

How Long Does This Step Take? 

The closing steps take place in the final week of escrow, leading up to a scheduled closing day.

How Long Does It Take to Buy a House from Start to Finish?

How long is the home buying process for any one person? It will depend on factors including: 

  • Financial simplicity versus complex income (seasonal, self-employment, etc.)
  • Availability and presentation of necessary documents
  • Agent efficiency and relationship
  • Housing inventory and market 
  • Type of lender and loan
  • Time of year

Six months is a good rule of thumb for an average house purchase with a few rejected offers and a lender approving a conventional loan.

How to Keep a Home Purchase on Track

The best approach for you is to use the Boy Scout motto: Be prepared. Secondly: communicate your needs to your agent. If you’re under a deadline related to a job offer, a wedding, or tricky finances, be open about it early on and make sure the agent can work with you. 

Stay on track by: 

  • Planning ahead at each stage: gather paperwork, do the research, note your questions
  • Keeping your documents, contacts, and notes handy
  • Responding immediately to calls, texts, and emails from your agent and other contacts
  • Showing up to appointments prepared and on time

Ready to Start Your Home Buying Journey? Take Your First Step with Dwellful

Since you’re probably tired of the word “paperwork” at this point, let’s focus on one of the other early steps: connecting with an experienced local real estate agent. The right agent won’t just be there to show you listed houses, but to help you understand each step in the process and be your advocate throughout a negotiation. 

Dwellful can provide an introduction to a local, skilled agent who knows your target neighborhoods and how to find the best fit for your specific needs. This agent finder service is free to you—plus, once you close on a house, we’ll split the commission we earn from agent referrals with you! 

Visit us today to find out how much cash you can get back and let us help you take one step closer to your dream home!

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Katie Hollar

Written by Katie Hollar

Katie is the CMO at Dwellful, where she's helping empower home buyers and sellers to navigate their real estate journey with confidence, starting by finding the best local real estate agent to guide them. As the daughter of a career agent (spending many childhood weekends visiting open houses and model homes) and after personally experiencing the roller-coaster of buying and selling her own first home, Katie knows how important it is to have someone you can trust guiding the way. As a personal finance enthusiast, Katie has a passion for helping people achieve their homeownership dreams. When she's not busy spreading the word about Dwellful, Katie enjoys reading, travel, and spending time with her family.