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Have you decided to pursue the American Dream of homeownership? While the process of purchasing a home is exciting, it can also be a time filled with anxiety, as shoppers navigate the ins and outs of buying a home.
Among the concerns many first-time buyers have is how long the transaction will take to complete. Potential buyers might have heard horror stories about months-long back-and-forths between buyers and sellers, which can leave everyone in the lurch as to when they’re coming and going.
While buying a home can sometimes seem to drag on for an eternity, experienced professionals can help you determine a specific and reasonable timeframe. According to Jeannie Heinen, an associate broker for Four Seasons Realtors in McPherson, Kansas, and a member of the National Association of Realtors, it will usually take 30 to 60 days from the time you make an offer on a house to the time the deal closes and you get the keys. Some circumstances, however, can speed up or slow down the process.
There are typically nine steps to buying a house.
The home-buying process is, well, a process, one that involves multiple steps, some of which happen at the same time. While the time it takes to complete each step varies, the house won’t be yours until the last one is checked off your to-do list. These steps include:
- Making an offer on the house.
- Negotiating the terms of the contract.
- Acceptance of the offer.
- Having an appraisal done.
- Scheduling inspections.
- Addressing repairs discovered during the inspections.
- Receiving loan approval.
- Checking the title to the property.
- Closing—this is the meeting during which the seller is paid and the house becomes yours.
If you’re working with a real estate agency, an agent will make sure all the steps are completed in a timely fashion. This is the best option for most buyers, especially first-time buyers.
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Getting preapproved for a loan before you start looking at houses can speed up the process of buying a house.
One of the hurdles to closing on a house is receiving loan approval. “If the buyer is preapproved,” Heinen says, “it’s one less thing to worry about.” Securing a preapproved loan involves the lender analyzing your credit and financial status, and then giving you the go-ahead to purchase a house up to a set amount, based on your current income and expenses. While pre-approval isn’t mandatory, it increases your chances of closing by the date on the contract—or earlier, if both parties agree.
Factor in the time it takes to find a real estate agent who has expertise in the area where you want to live.
A real estate agent can make the home buying experience much more pleasant, but you have to do your research to find the right one. You may have to make a few calls, and interview a few to discover which real estate agents are experts in the market you are targeting.
In addition to details about the home, experienced agents can tell you about the neighborhood demographics, amenities, schools, and more. These agents take the time to get to know you, so they can help you purchase a home that aligns with your needs and lifestyle.
The right real estate agent becomes even more valuable in a move to a new town or city. An agent who has been in the area a long time can guide you to suitable homes and steer you away from undesirable buildings or locations.
Shopping for a new home often takes longer than you expect.
The step in buying a house that may take the most time is actually finding your home and having your offer accepted. Buying a home is one of the largest purchases you will ever make, and you want to be sure you find the right fit. There are bound to be certain criteria on your home-buying checklist that are non-negotiable, so you may have to comb through lots of listings to find homes that suit your needs.
As we have seen over the last few years, bidding wars are becoming more common. There are many other buyers out there looking to purchase a home, some of whom can be very aggressive with their offers—even making cash offers tens of thousands of dollars over asking price. It may sound pessimistic, but be prepared to have a few offers declined before one is accepted.
Your contract to buy a house includes a purchase timeline, including the closing date.
The first step to buying a home is to make an offer to the seller. At this point, your agent will enter the anticipated closing date, based on how long she thinks it will take to complete the above steps. When the seller accepts your offer (usually within 72 hours), your agent and the agent representing the seller work to complete the steps before the closing date.
The type of mortgage loan the buyer is getting affects how long it takes to close.
“With a conventional loan, you can often close in 30 days,” Heinen says. Other types of home loans take longer to close, “typically 45 to 60 days.”
- Conventional loan: If you have good credit, a solid work history, and a down payment, your lender will probably suggest a conventional loan. This type of loan is usually issued locally, and if everything goes as planned, you’ll get the keys to your house in 30 days.
- FHA loan: If you can’t get a conventional loan, either because your down payment is too small or your credit isn’t top-notch, you may still qualify for a loan insured by the Federal Housing Administration. An FHA loan takes 45 to 60 days to close.
- Rural Development loan: RD loans, issued through the United States Department of Agriculture (USDA), are available for people with limited incomes who live in rural or suburban communities. RD loans require additional paperwork and can take up to 60 days to close.
- VA loan: Only veterans, members of the National Guard, reservists, and active-duty members qualify for home loans issued through the Veterans Administration. Similar to RD and FHA loans, VA loans require additional paperwork, which can push the closing out to 60 days.
In the process of buying a house, getting an appraisal is crucial in order to close by the contract date.
Your lender requires a professional appraisal of the house you’re buying to ensure it’s worth the price you’re offering. This is why scheduling an appraisal is one of the first things your agent will do.
Purchasing homeowner’s insurance requires inspections and may take up to 2 weeks to secure.
Purchasing homeowner’s insurance may be a requirement from your lender. Virtually all mortgage companies require you to obtain insurance for the full or fair value of a property, and not getting it may tank your loan application.
Home insurance protects your building and possessions against damage or theft. Unlike other types of insurance, which can be acquired in an afternoon, homeowner’s insurance can take weeks to finalize. The faster you can provide the insurance company with the information they need about the property and yourself, the better. If the house you plan to buy is higher risk, insurance often takes longer to approve.
The condition of a home may affect whether an insurance company provides coverage. Some insurers require a home inspection, where they will send an inspector to the house to verify the accuracy of your application. If this step occurs after your policy has gone into effect, their findings may cause them to adjust your coverage and insurance premiums.
Buying a house “as-is” can speed up the closing process, but it comes with risks that might not be worth the short-term convenience.
In a hot real estate market, buying a house “as-is” can be tempting. You are agreeing to buy a home in its current state, which cuts down time that would otherwise be spent negotiating with the seller, or waiting for the seller to make repairs to the property.
Buying a house “as-is” is a “buyer beware” situation. There are no guarantees that everything in the home works, and an “as-is” listing does not require the current owner to provide a seller’s disclosure, though they still have to tell you about any known issues. If there are problems discovered during the appraisal or inspection, it’s up to you to fix them if you end up going through with the purchase.
To that end, the property still has to meet federal and state minimum disclosure standards, and the appraisal makes sure the house passes minimum property requirements.
Addressing issues discovered during inspections can extend the average closing time on a house.
Unless you’re buying a house “as-is,” your lender will want one or more inspections to determine the state of the home’s structural soundness and mechanical elements, such as plumbing, wiring, and HVAC. In addition, some lenders will require a termite inspection. If any problems are discovered, your lender may require you or the seller to fix them before the deal is sealed. Depending on the types of repairs needed, this could push back the closing date.
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If you already own a home, you may choose to wait until it sells to buy your new house through a contingency agreement.
When buyers in this situation make an offer on a house, they often add a clause to the contract stating the purchase of the new house is contingent on the buyers selling their existing house. This is called a contingency on the contract. If the seller accepts the deal without putting a limit on how long the buyer has to sell the house, the closing date could be pushed back indefinitely if the buyer’s house doesn’t sell quickly.
Unanticipated factors may delay your expected timeline.
While most home-buying transactions go off without a glitch, thanks to real estate agents who work with lenders, appraisers, title insurance agents, and inspectors to ensure everything gets done, unforeseen situations can arise and derail a closing. Complications, such as discovering a lien against the property, problems with the title, or agreed-upon repairs not being completed, can delay a closing until the issues have been cleared up.
In most cases, closing on your home will happen on schedule.
As long as you’re buying a house that’s listed with a real estate agency and you’re working with an agent that represents your interests, there shouldn’t be any delays. Agents are experienced in keeping all the steps in the home-buying process on schedule.
Final word to the wise: Don’t skip title insurance!
The title of a property is proof that you are in lawful possession of a property. Acquiring title insurance protects both you and your lender from potential losses if there are defects in the title of a property.
When you buy title insurance, a title company searches records of events that may affect the ownership of a property, things like liens, levies, back taxes, etc. Having title insurance protects you from these defects and others such as forgery, fraud, filing errors, conflicting wills, and more.
Title insurance is an interesting type of insurance. Typically, when you purchase insurance—car insurance, for example—there are monthly premiums and the coverage protects you against future events. Title insurance is a one-time premium paid at the close of escrow, and it protects you against past occurrences.