Buying a home is rarely a quick process. Rather, it involves numerous steps as you prepare for your search, some careful negotiations once you make a bid and a whole lot of paperwork before you finally get the keys to your dream home.
So, how long does it really take? Well, once you strike gold and find the home of your dreams, it can be as short as a week if you’re lucky enough to be buying with cash – but the average wait for a buyer who is taking out a mortgage is about 50 days.
Unfortunately, there’s no guarantee that your situation will be “average.” All kinds of factors can affect the length of time it takes for an individual home to close. Understanding more about the usual timeline and what you can do to speed things along (or, at least, keep from slowing them down) can help you get through this journey with your peace of mind intact.
Below are the details of what goes on before closing day
Offer and Acceptance (1-2 Weeks)
Once you’ve identified the perfect property, the offer and acceptance phase comes into play. This is typically the most nerve-wracking part of the experience for a lot of buyers (and sellers) because it can be difficult to dovetail everybody’s expectations. Also, both sides can suddenly experience doubts about a deal.
If everything goes exactly as planned, you can probably get the purchase agreement signed by all the parties within a few days – but both parties are typically granted 14 days to evaluate the contract, have it examined by their attorneys or make sure any contingencies are handled before they fully commit.
Home Inspection (1-2 Weeks)
After your offer is accepted, you’ll have a window of approximately one to two weeks to conduct a home inspection. In a “sellers” market, buyers sometimes waive the home inspection in order to make a more attractive offer to the buyer – but you shouldn’t. It is the number one way to make sure that you’re making a sound investment and that there are no hidden surprises with the property.
The duration of the inspection phase can vary based on the availability of inspectors, with it taking longer to schedule during peak home sale season. However, once the property is inspected, you typically get the report within hours or days after the inspection is complete.
Home Appraisal (1-2 Weeks)
What’s the difference between this and the home inspection? Well, home inspectors give you a detailed report about the condition of the property and tell you about any potential problems, including repairs to major systems, like the electric or water heater, that may need to be made in the future. But these inspections don’t put a value on the house. That’s why you need an appraisal.
In many ways, the home inspection is for the buyer, but the appraisal is for the bank since you can’t get a mortgage until the bank is satisfied that the price is fair that you’re paying for a particular piece of real estate. This is the way that banks protect their investments. A lot of people try to get the home appraisal scheduled as close to the home inspection as possible, especially when the market is hot. That helps shorten this wait.
Mortgage Underwriting (A Few Days to 2 Months)
This is the real time-killer in the whole process, and you’re largely at the mercy of your lender’s underwriting time – although you may have shortened the process considerably if you wisely got a pre-approval before you started house-hunting.
If you’re pre-approved and nothing has significantly changed regarding your income, debts or credit score in the meantime, you could be through the final underwriting in a week (or even a few days). The only thing that might slow you down is if the home appraisal comes back lower than expected.
If you aren’t pre-approved or there are any major changes in your financial profile that must be addressed, the process could drag on for a couple of months. To avoid problems, you don’t want to take on any new debts or change jobs between the time you start your home-buying journey and when you finish it.
Closing (4 Days to 1 Week)
Once you’ve been given the “clear to close” notification from your lender that signals the end to the underwriting process, you can schedule your closing. You must wait a mandatory three-day period before you can finally sign, and there can be a little delay as you try to match schedules with the seller and the title company – but this is typically very brief.
Actually closing on your home – meaning the moment when you reach the finish line and put your signature on all the paperwork that seals the deal and funds the purchase – will take maybe an hour or two, at most.a
Closing on a home is a significant milestone in anyone’s life. While it can be a complex and time-consuming process, it doesn’t have to be filled with anxiety. Understanding the typical timeline, potential delays and strategies to expedite the process (like mortgage pre-approval) are the keys to turning your dream of homeownership into a reality. In the end, the wait and the effort will be worth it the moment you get those keys in your hands.