Questions and Answers
How Long Does It Really Take to Buy a House?
Are you ready to buy a house? Then it's time to start planning. The more that you plan ahead, the easier that the process will be in the long run. Part of that planning includes knowing exactly how long each step will take, so you know what to expect with each milestone in the purchasing process. Let's take a closer look at what it takes -- and how long it takes -- to buy a house.
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1. Decide Whether Now is the Time to Buy
Before you get serious about buying a house, it's smart to make sure that now is the right time. Having savings set aside will make it easier to put together a strong offer, and a good credit score is key to getting a mortgage.
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2. Find a Great Real Estate Agent (One Week)
The right real estate agent will make life so much easier as you navigate the purchasing process, so it's worth taking the time to interview a few agents and find the right match. If you have some referrals from trusted sources, then you're already ahead of the game. This step can take anywhere from a few days to a week.
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3. Find a Lender and Get Pre-Approved (One Week)
Getting pre-approved for a mortgage doesn't mean you have final approval, but it does give you a sgtrong idea of exactly how much you'll have available to spend on your home. Remember that you don't have to take the first mortgage offer. Shop around to find a lender that suits your unique needs.
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4. Shop for Homes and Find a Match (Varies by Individual)
Shopping for a home is the least predictable part of the process from a time perspective. Maybe you'll fall in love with a home that fits your budget right away, but it can also take anywhere from weeks to months to find the right match. A good real estate agent and a strong idea of what you want from your home can help speed up this step.
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5. Negotiate with the Seller (One Week)
Depending on the seller and how much competition there is for the home, the negotiating process doesn't have to take very long. Just start out with a viable offer and respond promptly whenever you receive a counter from the seller.
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6. Get Final Approval for your Mortgage (One to Three Weeks)
While pre-approval is important, it doesn't mean you will automatically qualify when it's time to secure your loan. The lender will still want to take a closer look at the house you're buying and make sure that your finances are in order before giving final approval.
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7. Home Appraisal and Home Inspection (One to Two Weeks)
The home appraisal and home inspection are the final key steps to securing your mortgage. You can expect a few days to schedule each appointment and a few more days waiting for a report after each appointment is complete.
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8. Close the Deal on Your New Home (Five to Eight Weeks)
On average, it takes about 50 days to close on a home after you're done negotiating with the seller. This includes time for the appraisal, inspection, and more. If you or the seller are on a rushed timeline, you may be able to expedite the closing process.
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When you're buying a house, it's always wisse to include a little extra time to account for the unexpected. With a plan in place and the right real estate agent, you can navigate the process with confidence.
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What is a Sellers Market?
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand:
Economic factors – the local labor market heats up, bringing an inflow of new residents and pushing up home prices before more inventory can be built.
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Interest rates trending downward – improves home affordability, creating more buyer interest, particularly for first time home buyers who can afford bigger homes as the cost of money goes lower.
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A short-term spike in interest rates - may compel “on the fence” buyers to make a purchase if they believe the upward trend will continue. Buyers want to make a move before their purchasing power (the amount they can borrow) gets eroded.
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Low inventory - fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
What is a buyer’s market?
A buyer’s market is characterized by declining home prices and reduced demand. Several factors may affect long-term and short-term buyer demand, like: Economic disruption - a big employer shuts down operations, laying off their workforce.
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Interest rates trending higher – the amount of money the people can borrow to buy a home is reduced because the cost of money is higher, thus reducing the total number of potential buyers in the market. Home prices drop to meet the level of demand and buyers find better deals.
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Short-term drop in interest rates – can give borrowers a temporary edge with more purchasing power before home prices can react to the recent interest rate changes.
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High inventory – a new subdivision and can create downward pressure on prices of older homes nearby, particularly if they lack highly desirable features (modern appliances, etc.)
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Natural disasters - a recent earthquake or flooding can tank property values in the neighborhood where those disruptions occurred.