How Long Does it Take to Buy a New Home?
Updated: Apr 12, 2021
Are you a first-time how buyer? A lot of questions come to mind, including how long does it take to buy a house? While estimating a timeline for home buying will depend on many variables, real estate experts estimate that the average time required is around four months.
This timeline is important for buyers to keep in mind for a variety of reasons.
Many buyers might hope to time their home purchase with their lease expiration, want to settle before the start of the new school year, or after the sale of their current home.
In short, home buyers might need to fit their home search into any number of time-sensitive situations, so knowing how long the buying process typically takes can help them plan accordingly. Plus, buyers should know that four months is how long it might take if everything goes smoothly. If problems crop up—with the home inspection, appraisal, mortgage, or other things—then the real estate buying process could take even longer.
Buying a house may take time, but there are good reasons why it's no impulse purchase. To help illuminate what's going on, here's a rundown of the various stages you'll encounter while home shopping to help you plan your buying timeline just right.
Step 1: Get pre-approved for a mortgage
Your first step shouldn't be to check out homes; it should be to get mortgage pre-approval from a mortgage lender or broker. This is presuming you aren't planning to make an all-cash offer to a seller, but rather need a loan to make your goal of home buying happen.
There are a couple of reasons for this: One, unless you're really organized, it will take you a while to gather all the documents you need to show your lender for your loan, including pay stubs and tax forms. Two, if the mortgage lender finds out that your finances are less than ideal for homeownership—because of, for instance, a poor credit score—it can take months to clean up your finances so you're in better standing. Oh, and you'll need to make sure you've got enough cash so you can afford to make a decent down payment on your mortgage, too.
If your finances are in good shape, you can get mortgage pre-approval, which is a contract that the lender will lend you a certain amount of money. Being pre-approved for a mortgage and having this paperwork in hand is a major asset, because it shows sellers that you can afford their house and mean business, and it's a prime way to negotiate with a home seller. (Keep in mind that mortgage pre-approval is different than mortgage pre-qualification).
If your financial circumstances don't change much by the time you close this real estate deal, you can ask a lender to extend that loan promise for an additional 90 to 120 days or longer; you can also lock in a great interest rate so it doesn't rise by the time you're actually buying a house.
Step 2: Find your dream home
While looking at real estate listings online is fun, but it can be a tedious task and you will have to manage your expectations as no home will be exactly perfect. Things to keep in mind are what's most important; school, commute, land, fixer upper, or a number of bedrooms with an on-suite to name a few.
So in the same way buyers have to kiss a lot of frogs before finding a prince, you'll likely need to spend some time house hunting, and see a lot of homes before you find one you love. On average, buyers see 10 houses before they make an offer, but that number can be much higher.
The last thing you want is to feel rushed or make a decision in haste that you will later regret.
Step 3: Prepare for closing day
Once you've found a house you love, made an offer that's been accepted, and are under contract to purchase the property (which can typically happen in a few days), the waiting game really begins.
On average, it takes around 45 days to close on a loan for buying a house, from the time lenders pre-approve your mortgage, underwrite your loan to the day you sign all the documents and move into your new home.
Now you know why getting pre-approval early is so important for the buying process? In fact, securing a loan is the most common holdup in buying a house. Even with a pre-approval, it can still take 30 days for the lender to do its due diligence by conducting a home appraisal to make sure it's a good investment (since after all, the lender's money is on the line) and underwriting your mortgage.
Meanwhile, if you're under contract to buy a particular piece of real estate, it will also take time for you to do your due diligence to make sure the house isn’t hiding any fatal flaws, i.e., bad roof, plumbing, mechanical, mold and any other number of costly or safety issues. Start by reviewing the home seller's disclosure statements for any existing or known problems, and also hiring a home inspector to check out the house from top to bottom for any unknown problems. All of this takes time. Closing is not a time to rush; you will want to make sure to do everything right.
Bottom line: It takes to buy a house, it's all in the interest of making sure you're happy once you're a homeowner and this piece of real estate is finally yours.