BankRate.com reports that the average time it took to close a home as of December 2020 was 56 days. It’s almost never a quick process as there are so many different steps in between the time you research the question, “Should I rent or buy a house,” search for the right property, and ultimately get the keys to move in.
Of course, the exact time frame varies widely based on multiple factors such as your financing needs, the time of year, the inventory in the local market, and the kind of home you’re looking for. Buying a home is usually the biggest financial purchase one makes. Most potential homebuyers understand the importance of taking their time through each step to make the best decision possible, including the following.
Getting pre-approved for a home loan isn’t a step you’ll want to skip. In fact, it will actually shorten the overall timeline as it shows the seller that you’re serious about buying, in addition to confirming how much you’re able to borrow. To get pre-approved, the lender will typically ask for information about your income, credit history, and assets to determine what amount they’re willing to loan you, if any, for a house.
Searching for the Right House
One of the longest aspects of the home purchase process is finding the right house. If there isn’t a lot of inventory in the area you’re searching, it can take a long time. But with pre-approval in hand, it will be easier as you’ll know how much house you can afford, and you can also work with a realtor who will help you find that ideal new home.
Making an Offer
Once you’ve found the best fit for you and your family, your real estate agent will help you put in an offer. If the market is competitive, meaning that others are likely to have put in an offer, too, you may have to put offers in on several homes before one is accepted. This can also be the case if you’re competing against cash buyers as that’s appealing to sellers who will be able to move faster. Your agent will help you make a competitive offer, reflects your best interests, and is aligned with the home prices in the area. That offer will include contingencies too, which protect you if, for some reason, you have to back out of it.
If you’re lucky enough to be a buyer who can make an all-cash offer, the entire process will be quicker with the time to close reduced. When there isn’t a need to obtain financing, it eliminates the back-and-forth with a lender; however, even these types of transactions will require some waiting due to the paperwork and details the seller must work out.
Your Offer is Accepted, Now What?
After the offer is accepted, there are still multiple steps in the process. You’ll likely need to put down “earnest money” to show you are serious about buying, schedule a home inspection to ensure there are no major concerns, and then wait out the rest of the process. Your lender will move the loan into overwriting, and you may have to submit more documentation for it to close. The lender will also order an appraisal to assess the value of the home to ensure that it’s a good risk for them to take.
Finally, all your efforts pay off at closing day, when it’s time to sign what probably feels like a mountain of paperwork. You’ll probably need to pay the closing costs in addition to dealing with all the documents, which typically takes two hours or more. Once that is all complete, the best part has finally arrived – you’ll get the keys.