Amongst all the excitement and anticipation that comes with buying a home, it's important to keep a realistic timeline of just how long it takes to purchase a house. The truth is, the timeline for buying a house can vary due to a number of factors like financing needs, if it’s a buyer’s or seller’s market, the time of year, and type of home you’re searching for. However, in most cases, once a seller has accepted your offer, the closing process typically takes 30 to 60 days - unless you made an all-cash offer.
The journey to becoming a homeowner involves a lot of steps and any of them could extend the process, especially if you're not well prepared. Read on to learn how long it takes to buy a house and get the keys in hand based on the three most common scenarios: a cash offer, a mortgage, and a short sale.
Nearly one-third of homes in the U.S. are bought with all cash. If a buyer has the cash available and provides proof of the funds, buying a house with an all-cash offer can happen in as little as two weeks. Once an offer is accepted, the buyer will likely want to conduct an inspection within the next week.
Assuming that the home inspection goes well or post-inspection negotiations wrap up quickly, attorneys can draw up the transfer documents to close quickly. That is unless the buyer’s cash offer is contingent on proceeds from the sale of his or her home, in which case the buyer will have to wait until their home sells.
Paying all cash for a home has many advantages. Homebuyers can save money on closing costs, home appraisals, mortgage applications and fees, title insurance, and more. Cash buyers can also save money by eliminating the need to pay interest on the mortgage loan. An all-cash offer is typically more attractive to the seller and gives the homebuyer a tremendous advantage against competition. This is due to fewer financing hurdles, a quicker closing process, and no risk of the buyer’s financing falling through.
A step-by-step process for buying a house with cash
|A few days||Find a trusted real estate agent||Make sure to find and interview a few agents when choosing a real estate agent for your home search.|
|24-48 hours||Seller verifies that the buyer has the cash to buy the house||With a mortgage, the bank will confirm that the buyer has money for the down payment. Since there isn’t a mortgage involved, the seller will be required to request proof of funds and earnest money.|
|1 day||Secure title and escrow services||The escrow company, a third party in your deal, ensures that all conditions of your real estate transaction are met. They’ll hold onto the earnest money until the deal is done. Your agent should be able to recommend a title company.|
|3 days||Title search||A title search ensures there are no outstanding liens or heirs listed in the title history.|
|1 week to book, 1-4 hours to complete||Home inspection||A home inspector will test the operational status of all major systems – plumbing, electrical, heating, and cooling – and check the roof, the foundation, and the home’s exterior. The inspector's job is not to fix or warn you about potential issues but to take note of the house’s current condition at that point in time and identify any safety or repair concerns.|
|15 minutes to 5 days||Appraisal||An appraisal will make sure that the home is worth the full purchase price.|
|1 day||Final walkthrough||You and your agent will walk through the home to make sure the house is in the same condition that it was when you agreed to buy it and to confirm that any agreed-upon repairs have been completed.|
|1-2 hours||Closing||Without mortgage paperwork, closing is fairly straightforward.|
If a buyer takes out a mortgage, it can be a much longer process from the offer to the moment a buyer gets the keys to their new home. After making an offer, most buyers should add 7 to 10 days to their timeline to inspect the property and negotiate any major items that appear from the inspection. The Purchase and Sale agreement is then slated to be signed about 10 to 14 days after an accepted offer. At this time, the buyer usually is expected to apply for a mortgage.
Once a buyer applies for a mortgage, lenders typically need 3 to 4 weeks to issue a mortgage commitment. Why? Well, the lender sends an appraiser to go out to the home and determine the market value of the home so the lender isn’t granting a loan on a home that’s not worth the purchase price. In addition, the lender needs a number of documents from the buyer, proving assets and income. These documents are submitted for a thorough review process before a lender will issue a mortgage commitment.
So, between an offer and the mortgage commitment, a buyer is typically looking at about 35 to 40 days. The process varies in every state; a local real estate agent and a mortgage broker will be able to provide a more precise timeline.
What happens after the mortgage commitment? Sometimes there are additional conditions on the commitment that a buyer needs to satisfy before the lender can mark the loan “clear to close”—like a gift letter for a monetary grant from a relative, for example. Because of new TRID disclosure rules - the guidelines that dictate what information mortgage lenders need to provide to borrowers and when they must provide it - it can take two weeks to close on a home after the mortgage commitment. This would add 14 days to a 35 to 40-day timeline. While a lender can sometimes close earlier than this, TRID rules require at least 3 business days for the disclosure documents prior to closing. At closing, a buyer will sign the mortgage documents and the official transfer of the property will take place. Buyers will often get the keys at closing, although some sellers will wait a couple of hours until the transaction is on record with the registry of deeds before giving the buyers the keys to the home.
So, from offer to keys, most buyers who are taking out a mortgage should anticipate 50 to 60 days to closing. There are some lenders who boast that they can close earlier—and sometimes they can. However, to be on the safe side, a buyer should not expect to close in less than 45 days.
Taking out a mortgage loan to purchase a home has significant benefits. Paying a mortgage provides tax benefits for homeowners, financial flexibility, and may improve your credit score.
A step-by-step process for buying a house with a mortgage
|Do your research||1-14 days||Research the local market, find out how much house you can afford, and note your must-haves|
|Find a real estate agent||1-7 days||Your agent will support you through the homebuying process. Take advantage of their neighborhood expertise and industry knowledge. They’ll be aware of housing market trends and potential red flags. They’ll help you make a good offer and assist with the negotiating process.|
|Get pre-approved||One week or less||A mortgage pre-approval confirms that the lender or mortgage broker has reviewed your finances and is willing to lend a specific amount of money.|
|Begin touring homes||Few days to a few months||Find out how much house you can afford and begin touring for homes in your desired neighborhoods.|
|Make an offer and negotiate||A few days||Work with your agent to determine how much to offer and which contingencies, if any, to include. You can check the home value estimate online and ask your agent for a comparative market analysis (CMA). This will show the list and final sale prices for similar homes that recently sold in the area. Some sellers will have an offer-review date, while others will be open to any offers that come in. When negotiating, consider raising your earnest money, waiving contingencies, or proposing an earlier closing date.|
|Get a home inspection||3-7 days to schedule, a few hours to inspect||If all goes well and the seller accepts your offer, you should schedule a home inspection.|
|Conduct a final walkthrough||1 hour, day before closing||A final walkthrough ensures the house is in the same condition as when they agreed to purchase it, and any agreed-upon repairs to the property have been fulfilled. If something isn't right, the buyer should ask the seller to fix the problem before the sale is closed.|
|Close on the house and get the keys||A few hours||Once you and the seller agree on the terms, you’ll enter the closing process, or escrow, which usually takes 30 to 45 days. You’ll likely be in very close communication with your agent, lender, and escrow agency during this time.|
Contrary to their name, short sales can take many, many months. In the best-case scenario, expect at least three months. In the worst case, well, it could take a very long time. Often buyers don’t apply for the mortgage until after the seller’s lender gives approval of the short sale. This approval can take a month at the earliest to get. If you would like to purchase a short sale property, make sure to have flexibility in your timeline as the length of the process can vary greatly due to a number of factors.
For buyers willing to wait, a short sale offers a number of benefits such as low pricing and favorable financing terms.
A step-by-step process for buying a short sale property
|Find an experienced agent||2-3 days||Finding a great agent is key to most real estate purchases, especially short sale transactions.|
|Get pre-approved for a mortgage||About 1 week||Find a lender and get preapproved for a mortgage. This will speed up the closing process.|
|Find a property to purchase||At least 1 week||Begin touring homes available for short sale and narrow down your options.|
|Write an offer and sign a contract||1-2 weeks||Work with your agent to determine an appropriate offer.|
|Send short sale packet to the lender for approval||Up to 12 months||Fill out paperwork and make your offer to the seller’s bank.|
|Have the home inspected||1 day||It’s recommended to always schedule a home inspection so you know exactly what you’re buying.|
|Have the property appraised||1 week||The lender will request a property valuation.|
|Get approval and close on the property||1 week - 1 month||Once approved, the closing process can be rather quick.|
An experienced real estate agent can guide you through every step of the home buying process, from finding a home and getting a mortgage, to signing all of the paperwork and ultimately getting the keys to your new home.
If you have questions about the home buying process, please do not hesitate to contact the legal professionals at the Esagoff Law Group, PC at 1-844-4 LAWFIX. We are here to assist you.