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How long does the homebuying process take?

It's not just the financial outlay that makes buying a home one of the most important life decisions one can make. Where you live plays a major role in so many other aspects of your life as well, from leisure and entertainment to who you’ll see and spend your time with.

Going into the homebuying process, you should know how long it takes to close on a house so you’re prepared and you don’t feel pressure to rush this weighty decision. We hope that by the end of this article, you’ll have a clear idea of how long it takes to close on a house and the steps involved.

Preparation

With thoughtful preparation, you can significantly reduce the time it takes to close on a house by eliminating any missteps that might create delays. Take a careful and honest assessment of your budget and make sure you have the income, whether through employment or retirement savings, to afford a home in the areas you’re considering.

Make sure you have enough cash for a down payment as well, whether this is coming from the sale of a previous home or savings. Now is also a good time to get together documents like proof-of-income, tax returns, and other financial documents. This can take as long as two weeks or, for the hyper-organized, a few hours.

Selecting an Agent 

It's critical to find a real estate that, above all, you can trust. They’ll be with you through every step of the process, using their expertise to evaluate market conditions and a home’s condition as well as leveraging their connections in the real estate business to help you get the best price.

If possible, ask family and friends who’ve purchased a home recently about their experiences and if they have an agent they might recommend. If you’re moving to a new area, use a third-party, unbiased source of reviews like Angie’s List to get straightforward reviews of agents. Be sure to speak, in person if possible, with an agent before retaining their services. Once again, be sure you are comfortable and confident in your choice before proceeding. On average, this step takes about a week.

At 55places, we hand-select agents who are knowledgeable, experienced, trustworthy, and free-of-charge, so you can feel confident moving forward with the homebuying process.

Loan Pre-Approval

If you’re taking out a mortgage, it pays to get pre-approved through a bank or lender before beginning your search. This not only speeds paperwork later in the process, but it can also give you a better idea of your budget.

If you have a long-standing relationship with a bank, by all means, start there, but always comparison shop as well. Don’t just take one lender’s word for it, you may be surprised to find a better rate at another institution. Pre-approval times can vary, but they usually hover around two weeks or less.

Starting to Look at Homes

Now we’re getting to the fun part! Home shopping, or rather browsing, is something of a hobby for millions of Americans. A combined approach of working with your agent and online shopping is how most homebuyers go about it.

This is a step of the process that's quite difficult to assign a precise time frame to. You may be looking in an especially hot market where inventory is low. Your agent and their local connections can really make a difference here. Conversely, you may know exactly the house you want going into this process. Your unique circumstances will influence this but, to give a range, expect anywhere from a few days to a few months.

Making an Offer

Things are heating up now, and the process will really take off. Your real estate agent will guide you through the process and, if taking on a mortgage, your pre-approval letter will help speed things along.

Now is the time to keep an eye on your phone and email as you’ll want to respond quickly to any offers or communications from your agent. Be prepared to respond quickly with a counteroffer, if necessary, or another potential buyer could swoop in. Typically and in a competitive market, this step usually takes a week or less. If the seller accepts your offer, you’ll sign a contract and be well on your way to moving into your new home.

Final Mortgage Approval

You did get pre-approved, right? The lender will want to evaluate the home you wish to purchase, likely requiring an inspection and appraisal. This protects the lender and you, the buyer, from a potentially bad decision.

You may also be asked for additional documentation, so again, the organization pays at this step. Scheduling both the appraisal and inspection can occur concurrently with final mortgage approval, and your agent can help with the scheduling. Expect this rather busy period to last about three weeks.

Final Steps Toward Closing on a House 

After the inspection and appraisal are conducted to the lender’s satisfaction, you’ll need to begin sorting out your homeowners’ and title insurance. The latter ensures there are no liens on the property, and homeowners’ insurance is both prudent and required in most cases. You may also have to purchase additional insurance if you're in an area impacted by floods or fires. On average, arranging for insurance coverage usually takes about a week.

At this point, you’ll arrange for the transfer of funds through your bank or lender. Make sure all communication about funds transfer is coming from your agent or a financial institution as there's plenty of opportunity for fraud in this step. 

Finally, you're ready for closing! Be sure to do a final walk-through to make sure the home is in the condition you expect. You’ll have a lot of paperwork to sign, but after that, the home is yours.

Note: Paying for a house with cash makes a substantial reduction in how long it takes to close on a house. You won’t be waiting around for mortgage approvals because you’re paying out of your own account. This can save you as much as 30 days in the process.

As you can see, in addition to doing your homework, there are a lot of i’s to dot and t’s to cross when buying a home. While your circumstances will add variables when buying, an average time to close on a home can be anywhere from 50 to 90 days. By assessing your unique circumstance, your real estate agent can give you a more precise idea of what to expect.