Are you about to embark on your first foray into the real estate market? Buying your first home is one of the most exciting, and nerve-wracking experiences in life, and it's also one of the biggest investments you'll make.
So how long does it take to buy a house, on average? In broad terms, it can take anywhere from six weeks to six months to buy a home, or even longer depending on the circumstances. There are many variables that can affect the time frame of your home buying process. Every buying scenario is different, because every buyer (and Vendor) is different.
THE KEY STEPS:
Getting pre-approval for a loan:
Mortgage pre-approval is when you go to a lender before you have started shopping for a house, in order to find out how much of a loan you can get. The lender will examine your current debts, income, and other aspects of your financial picture. Then they will give you a maximum loan amount - which is of course based on a property assessment. This process usually only takes a few days to a week, depending on how organised you are with your financial documentation, and how straight forward your expenses are.
If you do get pre-approval, the home search process can be quite stress-free as you know what your budget it. If you don't get pre-approved however, it might take even longer for you to complete the home buying process. For example, if you were searching for homes in the $800,000 price range, but you're only qualified for a $700,000 home loan, you are essentially wasting your time and making the process take longer. So by speaking to a lender ahead of time, you can expedite your home purchase.
Finding a real estate agent:
How long it takes you to buy a home will also depend on the real estate agent you choose. Real estate is like any other industry, in the sense that there are superstars and less-than-stellar performers.
If your agent is a real go-getter, it will likely take less time for you to find a suitable home and close the deal. On the other hand, if you end up with the kind of real estate agent who drags his or her feet, your process could take longer.
It might take you anywhere from one day to one week to find an experienced agent. Get references from people you trust.
The three most important things to look for in a real estate agent?
1. Track record of results and customer feedback
2. Prompt response rate to enquiries
3. A realistic approach
Shopping for a home:
House hunting is often the longest stage of the home buying process. During this step, you will use the Internet, your agent, and good old-fashioned driving around to find homes that potentially meet your needs. Screening homes online is always a good idea, because it prevents you from wasting time viewing houses that don't check all of your boxes.
How long does the house hunting process take? This depends on how much time and effort you put into it. People who work full time often have to limit their home shopping to evenings or weekends. People with more flexibility built into their schedules typically find homes faster, simply because they can put more time in to the search.
On average, the house hunting stage can take three to six weeks. But it can easily go longer in larger markets with a lot of inventory, and for buyers who are limited to weekend searches.
Negotiating with the Vendor:
Real estate purchase offers typically have a 24 or 48 hour window. The Vendor uses this time to evaluate the offer and decide if they want to accept it. If they don't accept it, there's a good chance they will come back with a counteroffer.
The buyer can then accept the counter, submit a counter offer of their own, or walk away from the house. The negotiating stage of the home buying process typically takes less than a week, but it can stretch longer if there's a lot of back-and-forth negotiating.
If you're using a mortgage loan to finance your purchase, the efficiency of the mortgage company you are using can also affect how long it takes to buy a home.
Once you have signed a contract to buy a house, your loan application file will move to the underwriter or the underwriting department. The underwriter will carefully examine your files to make sure it meets all of the lender's requirements.
How long it takes can vary based on how smoothly it goes. Some borrowers sail through the underwriting process, while others have to resolve conditions set forth by the underwriter. The process can take anywhere from one week to three weeks, partly depending on the borrower's qualifications.
Conveyancing and Closing:
The time frame from first instructing a conveyancer about an accepted offer on a property to actually moving into your new home typically takes somewhere between eight and twelve weeks. However, it's important to remember that this is just an average.
During this time, the home buyer will typically have a home inspection completed, and possibly other types of inspections as well. The mortgage lender will have the home appraised to make sure it's worth at least what the buyer has agreed to pay.
At the end of this time, the buyer and Vendor eller will attend the closing process and sign all of the necessary paperwork. The closing process itself typically only takes one day, unless there are any anomalies.
So while there are many variables that determine how long it takes to buy a home, if you are a proactive home buyer and everything goes smoothly for you, you could find and purchase a house in two months or less - and move in within 60 to 90 days. Happy house hunting!
For more information on finding the ideal property for you, contact the Danckert Real Estate team on 5904 6446.