Follow this step-by-step guide to buying a house and find out how long you can expect it to take based on various factors.
Getting Ready To Buy a Home
It’s important to take a few preliminary steps before you get too far along in the homebuying process. This will ensure that you get approved for the financing you need at an affordable rate.
Check Your Credit (Minutes to Months)
Check your credit reports and scores first. Many lenders require a credit score of at least 740 to get a mortgage. Make sure there aren’t any errors or negative items that can drag your score down and correct them. This step can take a matter of minutes or much longer, Tony Mariotti, a Realtor and CEO of RubyHome, told The Balance by email. The timing depends on whether your credit is in good shape. You may need a month or longer if you have to dispute errors on your report or spend time paying down debt to improve your score.
Gather Your Documents (A Day or Two)
Financing a home requires a lot of documentation. Lenders want to see that you have the income to support a mortgage payment, and savings to fall back on if you experience financial trouble. You’ll need pay stubs and tax returns going back at least two years, as well as bank and investment account statements, lists of outstanding debts, and more. Spending a day or two to gather these items ahead of time will make the application process go much smoother.
Get Mortgage Quotes (An Hour or Two)
It’s crucial to shop around for the best mortgage rates and terms to be sure that you’re getting a good deal. This involves getting quotes from several lenders. This can typically be done in an hour or two. Many lenders allow you to submit some basic information online and receive quotes instantly. It’s a good idea to speak with a loan officer about your situation after you find a few potential options. Negotiate the terms of the offer, Mariotti said. “I would [spend] a week or two, depending on how much time you have to shop around.”
Get Preapproved for a Mortgage (A Week)
Another way to speed up the process is to get preapproved for a mortgage. This lets you know exactly how much you can spend on a home, and it lets sellers know that you have the money to make good on any offer you make. Mariotti said it should take about a week between sending in your documentation and receiving a preapproval letter.
Buying a House
It’s time to begin your house hunt when you have these details out of the way. “Now that you know your budget, you can do some preliminary research online to find the areas with properties that meet your requirements,” Bill Samuel, a licensed real estate broker and residential real estate developer, told The Balance by email. You can start narrowing your search when you have a general idea of what’s available.
Hire a Real Estate Agent (A Week)
You aren’t required to hire a professional buyers’ agent, but it can definitely help make the process less stressful and time-consuming. A good real estate agent or Realtor knows the local market and can help you find what you’re looking for. They can walk you through all the necessary paperwork and help you choose the right dollar figure when it’s time to make an offer. “Meet with a few different Realtors to figure out who you vibe well with,” Mariotti said. “This shouldn’t take too long—a week should suffice.”
Shop for a Home (Up to Three Months)
“Hone in on your needs and your wants before beginning your search,” Mariotti recommended. Keep a shortlist of those you like the most as you tour homes. “Develop a ranking or grading system to keep track of your top favorites,” he added. This will help you maintain a tally of what you liked or didn’t like about each property so you can narrow down your list more easily. The amount of time you spend on this step is up to you. It’s important to take your time and find the right property, but you don’t want to move so slowly that you miss out on a popular listing. Mariotti said a reasonable length of time to spend is around three months, although it could go faster if the market is particularly competitive.
Putting in an Offer (Up to Six to Nine Weeks)
“If you decide that you’re interested in a property…you’ll sit down with your Realtor to write up and submit a formal offer,” Samuel said. It’s important to submit an offer that you can afford, but one that is also attractive to the seller and likely to be accepted. The seller will consider your offer and might make a counteroffer, and you may bounce numbers back and forth a few times before settling on a deal. This process can take up to six to nine weeks, Mariotti said.
Closing on a Home
“Once both parties are in agreement on the details of the offer—which may include an earnest money deposit amount, timelines for contingencies, closing dates, and any additional details—a contract is formed, locking in both parties,” Mariotti said. Now it’s time to get down to business and work toward closing on the house.
Have Your Future Home Inspected (A Week or So)
Samuel said you should schedule a home inspection within five days of signing the contract. There may be more than one required, such as both a general and pest inspection. “During the inspection, you’ll go through every corner of the house to discover any defects (which often takes about two to three hours), then receive a formal report of the findings a day or two later,” he said. At this point, you’ll have to decide what repairs (if any) you want to require the seller to make before moving forward with the purchase of the property. “There are typically a few days of going back and forth until an agreement on the required repairs is made,” Samuel added.
Get the Home Appraisal (Several Weeks)
The lender will next order an appraisal. The report should be delivered to you no later than three days before closing. This step involves an appraiser visiting the property to determine its fair market value. The lender wants to verify that the home’s value matches at least the amount you’re attempting to finance. The loan may be denied if the property is appraised for less than you’re looking to borrow.
Get Homeowners Insurance (One to Three Days)
You’ll usually secure a homeowners insurance policy before closing on a home. This ensures that your investment is protected from the beginning. Most lenders won’t fund a mortgage until there’s a policy in place. It usually takes one to three days to process a policy after you’ve chosen an insurer.
Get Title Insurance (About Two Weeks)
Your closing or escrow agent will begin the process of securing title insurance for you after your purchase agreement is signed. This takes about two weeks. The buyer generally pays for the lender’s title policy, which protects the lender until the mortgage is repaid. A homebuyer’s title insurance policy protects the actual owner for as long as they own the property, and the seller usually pays for this. Title insurance policies cost about $1,000, but you could pay less if you shop around.
Final Mortgage Approval (It Depends)
Underwriters will double check your submitted documents, your credit information, and your financial situation after all these steps have been completed. They want to make sure nothing has changed. “After completion of a successful appraisal and full review by the underwriter, the loan will be issued ‘clear to close,’” Samuel said. This often happens right away. “At this point, you’ll schedule a specific closing date and a time to complete the final paperwork.” But the closing process could be delayed for as long as it takes you to resolve the issue if you’re required to provide additional information or clear up any discrepancies in your paperwork.
Prepare Your Closing Funds (One to Two Days)
You’ll have to get your “cash to close” ready before you head to the final meeting. This includes any fees you owe to close on the home minus your earnest money deposit. Find out from your lender exactly how much you’ll have to bring. This could take one or two business days if you’re wiring money from another account. Initiate the transfer in advance so you have the cash on closing day.
Do a Final Walk-Through (It Depends)
Finally, Samuel said, you’ll schedule a final walk-through of the home before the scheduled closing. The seller has some time to make the fix before closing if there are any last-minute problems. “Be sure to verify any repairs the seller has promised to make,” Samuel said.
The Closing Meeting (You’ve Reached the End)
The buyer will receive a Closing Disclosure from the lender following the contract period, assuming that all is moving forward without issues. “After a minimum of three days for the buyer to review the details, a closing meeting is scheduled, at which the title documents are signed, all outstanding closing costs are paid, and the seller walks away with their proceeds,” Mariotti said. If you’ve reached this point, congratulations: You’re now a homeowner.
