When you’re ready to put down roots, you naturally want the process to go as quickly as possible. Whether you’re moving for a time-sensitive reason, such as to pursue a new job, or you’re simply ready to relocate, it’s common to be eager and excited! As you take these first steps, it’s important to be realistic about how long it can take to buy a new home. The house hunting process usually takes around four to five months, and then the actual closing can take an additional 30 to 45 days after that.
That means you could be looking at six months or more, from start to finish. Of course, there are many different factors that can affect this, from the time of year to your local market.
Today, we’re breaking down this timeframe a little more, so you can prepare your schedule and plan accordingly.
The house-buying process can be long and winding. However, most buyers can expect to follow the same basic steps. Each phase can take a substantial amount of time, so you may be able to finish sooner if you can expedite any part of the process.
Here are the ones to know.
Especially if inventory is low in your area, it might be hard to find a home that meets all of your needs and fits your budget. As such, the initial house-shopping stage might take longer than you think. It might also be more difficult.
According to one recent survey, 56% of all buyers believe that finding the right property is the hardest part of buying a home. If you have stringent must-haves, then this task can become even more challenging. Buyers who are more flexible with their features, as well as their preferred location, will often enjoy access to a greater number of available homes and can complete this step sooner.
Finding a home you love is the first part. The next step is to submit an offer and hope that the seller accepts it. While this part sounds simple in theory, it becomes increasingly complicated in competitive markets.
Even an offer that you feel is solid might lose out to another bidder, who’s willing to pay more or make more concessions than you. This is especially the case if you need to finance the purchase, but someone else can pay cash.
If you get stuck here, you might have to submit multiple offers on multiple homes before you receive that coveted acceptance. In 2022, 48% of homes receive three or more offers before they sell. If you come to the table with your best and most competitive terms, you can improve your chances of inching out other prospective buyers.
This is where purchasing a new construction home in Raleigh NC can have many advantages. Even during the crazy times of the pandemic, New Home Inc never participated in the bidding wars. We always kept our process the same; the first person to write a contract at the asking price and provide their deposit was the recipient of a brand new, New Home Inc home. Once you find the right home and the perfect homesite, it’s as simple as drawing up the paper work. Problem solved, searching and worrying is over!
Once a seller approves your offer, you then have to make sure that all parties agree on all the terms. Again, this is usually more complicated and time-consuming than it seems.
You may have to go through several rounds of negotiations and counter-offers before everyone is satisfied. Usually, these back-and-forth discussions deal with issues relating to the home sales price, repairs, and appraisals.
Unless you plan to pay the full price of the property with cash, you’ll need to finance the sale. Not only will your lender have their own set of processes to complete, but you will also need to locate many documents relating to your personal finances before you can proceed.
Once you’re approved, your lender will need to perform other steps, such as underwriting the loan and conducting an appraisal. If you can prepare your documents ahead of time and make sure you have everything ready, you may be able to save some time here.
As you can see, there are a few different factors that can lengthen the house buying process. Thankfully, there are also a few ways you can speed up this journey.
While the loan approval timeline will depend largely on your lender, you can prevent unnecessary delays by preparing as much as possible ahead of time. This includes:
While these steps can help you get ahead, remember there are multiple parties involved in any home sale. It can take time to work out the details with the seller, so factor in plenty of time for negotiations.
If you start early, you can prevent many time-consuming roadblocks. Here are some quick tips on when and how to begin.
At least six months before you seriously begin shopping for a new house, start getting serious financially. Start by listing your income and expenses so you know what you can comfortably afford.
Then, begin setting aside enough money to cover a standard down payment (around 20% of the total cost), as well as closing costs. Typically, closing costs will equal around 2% to 5% of the home’s total purchase price.
Another helpful step? Review your credit score now to avoid issues down the road. Lenders will assess this store to determine your ability to pay back your loan on time and according to the terms.
Request copies of your credit reports online, and review them carefully. As you do, consider steps you can take to raise your score, such as paying down your credit card debt.
The higher your credit score, the more favorable terms you may be able to secure from your lender. If there are errors or discrepancies in the report, resolve them quickly.
Your next step is to assess your local real estate market to learn what’s out there. Of course, the easiest way to do so is to shop for available homes online from a trusted source!
This is the time to narrow down exactly what you need in terms of home type, location, and key features. You can use these parameters to narrow your search. When you find homes that match your requirements, save those searches online so you can receive notifications when similar homes hit the market.
Not sure where to start? A real estate agent can help you navigate the options and can also put you in touch with other experts you’ll need throughout the process, such as a:
The closer you get to buying, it’s also smart to curb any unnecessary spending. You should also resist taking out large loans, as they could lower your credit score. They’ll also work against your overall debt-to-income ratio, which a lender will analyze to determine your loan eligibility.
If possible, keep things as lean and steady as possible. If you make any major changes to your employment or income, the loan application and approval process could take longer.
Sellers tend to give priority to buyers who have already been pre-approved by their chosen lender. If you haven’t connected with a lender yet, then a mortgage broker can guide you through the process and help you find the right one.
When you go to get pre-approved, it’s important to have the right documents with you. These include:
Keep in mind that pre-approval letters are usually valid for 60 to 90 days. In the interim, keep searching! Reference your saved searches and work with your real estate agent to learn about new listings. If you find a home you are interested in, let your agent know so they can set up a showing.
If you find a home you love that meets your criteria, go ahead and make an offer! It may take a while to receive a favorable reply, so allocate about two months for this process. If a seller doesn’t accept your offer right away, they may want to enter into negotiations.
When this happens, you’ll go back and forth on the price and associated terms. As soon as everyone agrees, both parties can sign the contract and you’ll officially begin the most exciting part: the purchasing process!
The purchasing process includes a 30-to-45-day escrow period. During this time, your lender will schedule various steps that help underwriters approve your loan. These include:
If you’re applying for a conventional loan, this process should proceed smoothly unless your credit or income has changed and extra verification is required. It can also take a little longer if you’re applying for a loan backed by a government agency, such as the FHA or VA. These loans can require additional paperwork, which takes a while to complete.
Once everything is complete, start shopping for homeowner’s insurance so coverage can start as soon as you move in. Your lender will need this information to finalize the loan.
You made it to closing week! The morning of your closing (or the night before), you’ll walk through the home to perform a final inspection and make sure all required repairs have occurred.
Then, the only thing left to do is visit the title company’s office and complete the closing paperwork. It sounds simple enough, but the signing process can take a few hours, so schedule enough time to read through everything carefully.
With house keys in hand, you might forget all about the long road you took to get to that pivotal moment. However, it’s important to understand how long this journey can take.
The sooner you start preparing, the easier and quicker the process will go. By beginning at least six months in advance, you can eliminate common headaches and hassles and get to the finish line quicker.
Are you ready to buy a new home in the Triangle? If so, our team can help. Check out our available homes and floorplans online today and contact us to get started!