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Homes aren’t impulse purchases. It takes time to sift through listings and make your way from one home showing to the next; then, of course, there are those agonizing hours you wait to find out if your offer on a house was accepted, whether you can secure financing, and any number of other holdups.
Just so you’re prepared to play the waiting game, here are the steps to buy a house and how long they typically take, so you aren’t sitting there holding your breath and wondering if something’s up.
How long does it take to find a real estate agent?
Answer: A couple of days to a few weeks. We can save you the trouble head over to our AGENT tab.
Your real estate agent should be your most trusted consultant during the home-buying process.
“The home-buying process is a complicated one, and the chosen agent must be the person who can best relay each step of the process in a way that will be understandable and reassuring to the homeowner,” says Diane Henderson, a Realtor® with McEnearney Associates in Alexandria, VA.
“Find the Realtor that ‘fits’ you,” she adds. “The whole process will go a lot more smoothly.”
How long does it take to get approved for a mortgage?
Answer: At least two weeks
Getting approved (or pre-approved) for a mortgage is no simple process. Lenders need to examine your documentation, review your financial information, and reconcile any problems. So even if all your documents are in order and you’re a stellar candidate, expect to wait two weeks or more to find out if you got the green light.
How long does a showing take?
Answer: 30 minutes to an hour
This one is largely up to you. A showing could be as quick as five minutes if you immediately decide you don’t like the property. But if you are interested, odds are you will take your time, poking your head into every closet and turning on every faucet.
That said, odds are you will know a home is The One surprisingly soon: One study found buyers spend an average of just 17 minutes inside a property before deciding to buy it.
Still, it’s essential to buy a home with your head as well as your heart, so go ahead and take your time to thoroughly vet every corner.
How long does it take for an offer to be accepted?
Answer: Less than three days
Unlike on “Property Brothers,” where offers are always accepted in a flash, the real world takes a bit more time. You may be tapping your toes in anticipation, but sellers have some leeway when responding to an offer. They have three options, each of which needs to be mulled over: Whether to accept your offer outright, counter it, or reject it.
How long does a home inspection take?
Answer: Two to three hours for the inspection, then 48 hours for the results
Buyers should attend the home inspection, but be prepared for it to take a while. Inspections typically take about two to three hours—enough time for your inspector to examine the foundation, structure, fireplace, and other common problem spots. Don’t be afraid to ask questions, even if it means taking 30 more minutes.
“This is the best time to investigate your new home,” says Jeff Knox, the owner of Knox & Associates in Dallas. “After all, you have a licensed home inspector by your side. Nothing in the house is off-limits during your home inspection.”
Once the inspection is completed, expect to see a report in two days. When you have it in hand, you can work with the sellers to determine if any changes need to be made before closing.
How long does an appraisal take?
Answer: Up to two weeks
Like a home inspection, the appraiser—the professional who estimates the home’s value on behalf of your lender—might spend a few hours examining the property (and this time, your presence isn’t necessary). After viewing the house, the appraiser will examine comparable homes in the neighborhood (“comps”) and look through the neighborhood.
Because their prepared report can be quite comprehensive, sometimes reaching a hundred pages or more, its composition can take some time. Expect your lender to receive the report within two weeks.
How long does it take to close on a home?
Answer: 50 days
Home closing times are lengthening, currently averaging 50 days. Yes, it’s a pain. No one wants to wait more than a month to take possession of their new home, but don’t rush due diligence. Your lender will have a number of requirements, including providing paperwork like tax returns, before underwriting is complete. You can expedite this process (slightly) by having necessary documents prepared in advance.
Spring and summer usually get all the real estate glory with lofty accolades as the best time to buy a home—and, of course, the busiest. Meanwhile, their seasonal sibling, fall, often gets tossed to the leaf pile by potential buyers who might think autumn is just about haunted houses and turkey dinners rather than house hunting.
But surprise! Fall is not only a great time to buy a home, it might also be the best season to find the perfect property (and not just because you can browse the listings while cupping a pumpkin latte).
Read on to discover the many reasons.
Reason No. 1: Lower home prices
The best month to snag a deal when buying a home? October. This isn’t just some random guess; it’s based on RealtyTrac’s analysis of more than 32 million home sales over 15 years. The resulting data showed that on average, October buyers paid 2.6% below estimated market value at the time for their homes.
For a house that would normally be $300,000, 2.6% translates into a $7,800 discount. Those savings are nothing to sneeze at, so bargain hunters should get hopping once autumn rolls around. (For an even better deal, aim for Oct. 8, when buyers get a home, on average, at 10.8% below estimated market value.)
“For buyers looking for a better deal, fall is a great time to make offers,” says New York City Realtor® Joanne R. Douglas. (In case you’re wondering, the worst month for buyers is April, when homes sell for 1.2% above estimated market value. The worst single day is Jan. 19, with an average 9.6% premium.)
Reason No. 2: Less competition
Like a beach after Labor Day, the realty market clears out as the days turn crisp. Most summer buyers have already found a home, meaning a fall buyer will have way less competition for the available houses on the market, says Bill Golden of Re/Max Metro Atlanta Cityside. And don’t worry about those buyers who didn’t close before August, either.
“Many folks will drop out of the market until after the new year,” says Golden, giving a fall buyer even greater room to roam at open houses. There may not be as many properties to choose from, but as Golden says, “a little patience and perseverance could reap big rewards.”
Reason No. 3: Worn-out home sellers
Say hello to your little friend, leverage. Sellers who have their homes on the market in the fall “are generally people who need to sell, which can make for better negotiations for the buyer,” says Golden. And if a home you have your eye on has been on the market all summer, you’re really in the driver’s seat as far as making an offer the seller can’t refuse. The longer a home sits on the market, the more negotiating power the buyer wields.
Reason No. 4: The holidays are around the corner
Not only are most home sellers worn out after the summer selling season, they’re also caught between a real estate rock and a hard place in that the holidays are barreling down on them. If they want to move and settle down in time to host Thanksgiving and put up their Christmas lights, they’ll have to close, fast. So use this preholiday window to your advantage by offering to help them vacate fast if they cut you a deal.
Reason No. 5: Year-end tax credits
No one wants to buy a home purely to make their accountant happy. But there’s a sweet added incentive to closing on a home at the end of the fiscal year. Come the following April 15, you might be able to take some nice tax deductions, including closing costs, property tax, and mortgage interest, to offset your taxable earnings.
Reason No. 6: More quality time with your real estate team
As the year comes to an end, fewer buyers also means you should have the full attention of your real estate agent, mortgage broker, real estate lawyer, and everyone else on your house hunting team. You can take your time to ask all those questions you have about earnest money, due diligence, title transfers, and more without feeling like you’re horning in their busiest season to turn a buck.
Reason No. 7: Home improvement bargains
Once you close on that home you found in the fall, you may want to upgrade your appliances. Luckily, December is when major appliances—refrigerators, stoves, washers, and dryers—are at their very cheapest, according to Consumer Reports. It’s also the best time of year to buy cookware and TVs.
So once you’re settled in (and provided you have any money left), get ready to renovate!
By Margaret Heidenry | Oct 25, 2016
You wake up in a cold sweat. There’s something lurking in the dark, visible by flickering computer light. Something’s haunting you. It’s… the real estate listings! Deep down, you’d love to own a home, but whenever you take steps beyond idle window-shopping, a chill runs up your spine, and paralyzes you from moving ahead. We get it—you’re about to make a life-changing purchase, and you’re spooked. The main thing that home buying has in common with horror flicks: The fears are (mostly) mere figments of your imagination.
So in case you’re harboring some heebie-jeebies, here are some of home buyers’ top concerns—tackled head on so you know what you’re really dealing with.
Fear No. 1: ‘I’m afraid I can’t afford a home’
Some house hunters are possessed by worries that their entire savings account will get sucked into a black hole if they buy. Then they’ll never be able to afford vacations, or new clothes, or food beyond beans and rice or mac ‘n cheese ever again.
The reality: Depending on what and where you’re buying, you’re not likely to drain your savings account, according to Bill Golden of RE/MAX Metro Atlanta Cityside. “There are many loan programs out there that can help first-time home buyers with down payment assistance,” says Golden, “or that don’t require a severed arm and leg in order to get a mortgage.”
The best way to determine how financially ready you are to buy a home is to talk to a loan officer. Alternatively, you can also enter your income, debts, and other info in realtor.com®’s home affordability calculator, to see exactly how much you can afford to spend on a home without going broke.
Fear No. 2: ‘I’m worried I won’t be able to buy a home I actually like’
The current economic climate may lead some buyers to believe that buying means they’ll end up living in a version of a “Saw” movie set—a windowless pit with exposed plumbing. (Without the severed limbs, however.) Fact is, interest rates are low, allowing homeowners to snag a great deal and pay less over the course of their loan. “Also, with the economy being in a downturn, many fantastic properties are being sold for under value,” says Tyler Ferguson, owner of Stone Reinvented.
Fear No. 3: ‘What if I buy a money pit?’
We’ve all seen that movie of the same name where Tom Hanks‘s life and bank account are shredded, thanks to a rapidly disintegrating old house. But hey, that’s just a movie—most houses aren’t money pits, and even if there are potential issues lurking in the shadows, like a leaking pipe, you can do plenty to protect yourself. Before the sale, “hire a good home inspector,” says Green. He or she should be able to see signs of water damage, or any electrical and plumbing red flags. A home inspector will also advise you on potential repair costs, which can provide leverage for you to go back to the sellers and lower the price you pay.
Fear No. 4: ‘I’m worried I’ll overspend’
The asking price for a house may seem like an unholy amount of money. But keep in mind, that’s just what the sellers are asking for—what they get could be a totally different picture. Your Realtor can help guide you to a realistic offer. “A good agent will know the price points of the areas you’re targeting and can back them up with historical data and comps,” says Crystal Green, a Manhattan real estate agent for Level Group. Since you can search the prices of homes that recently sold in any area, it’s easier to find out what the neighbors paid and gain better insight before you place an offer.
Fear No. 5: ‘I’m leery of buying during an election year’
A presidential election year makes many buyers want to hide under the covers until Nov. 8 when the political curse lifts—especially this year. “Everyone talks about uncertainty during campaign season,” says Green. But think about it: Unless you’re one of those people who really will move to Canada if so-and-so becomes president, will the election actually affect where you choose to live? “If you’re fairly confident that you’ll remain in a home for three to five years, you should net a profit at resale,” says Green.
Fear No. 6: ‘It’s just safer to rent’
Sure, renting means you aren’t trapped in one place, as you are with homeownership. Yet for Scott Forman, divisional vice president of Cross Country Mortgage,” rent money disappears without allowing you to build any equity over time. That’s truly scary.” He estimates that by paying about $100 a month more, many renters could own their own home—and receive tax deductions. If in doubt, use a rent vs. buy calculator to crunch the numbers and see whether it’s renting or buying that wins out in your area.
This is it: The big one.
You’ve scoped out the neighborhood, saved for your down payment and found your custom kitchen and perfect bathroom tile.
You’re trading the world of rental apartments, condos and townhomes for one of the biggest financial commitments of your life: Your first home.
But you’re new to this and quickly find yourself overwhelmed and confused. As the process unfolds, you realize you didn’t account for all your closing costs; buying a new car last week spooked your credit report; and that home inspection you passed on — that was a really bad idea.
Soon enough, your idyllic dream for a first home turns into a burdensome nightmare.
This scenario could have been avoided if you were aware of some of the most common mistakes committed by first-time homebuyers.
We spoke with loan officers, real estate agents and other home-buying experts to give you a rundown of some of the biggies and tips that might help you avoid headaches and heartache before you sign the dotted line.
Maybe you thought the biggest check you’d write for your lovely new house would be your first monthly mortgage payment.
“First-time homebuyers are notorious for…constantly overestimating or underestimating what they can afford,” says Jason Hecht, a Movement sales manager in Glendale, Calif.
Apparently so: A study from PricewaterhouseCoopers shows that 61 percent of misunderstandings between borrowers and lenders stem from confusion over fees, terms and ownership costs.
Experts say first-timers should save months in advance and budget for the money they’re sure to spend. Those expenses include:
Closing costs and fees: Hecht tells his California clients to be ready to spend about $5,000 in closing costs alone. That’s because, as a buyer, you’ll have to pay attorney’s fees, lender fees, appraisal fees, title fees and a recording fee just to put your home’s deed on file with the state.
Property taxes and homeowners insurance: You’ll likely want to set up an escrow account where your loan servicer can pay your insurance premiums and tax payments for the life of your loan. All lenders require buyers to pay up to a year of insurance at closing.
Private mortgage insurance (PMI): This monthly fee is for buyers who pay less than 20 percent of a down payment on their home. It reimburses the lender in case you default on your loan.
Inspections: Most industry experts recommend buyers foot the bill for a home inspection. Depending on what your state requires, you could need a general, chimney, geological and/or sewer inspection (that’s about a $1,000 tab, Hecht says). Plus, not all repairs recommended by the inspector are always covered by the seller. You could end up paying some out of your own pocket.
HOA fees: If you’re moving into a subdivision or gated community, find out how much you’ll have to pay in annual/yearly homeowners association fees for neighborhood upkeep.
#2. Hold off on that new furniture set or American Express card until you’ve actually moved in.
Why? Because lenders are going to check your debt load before closing and if you’re on the hook for a massive last-minute purchase, it could “kill a deal,” says Shari Saba, a Movement senior loan officer in Franklin, Tenn.
Many loans are approved based on a specific debt-to-income ratio and minimum credit score. If you go purchase a Hummer (or just a Honda) a few days before closing, and the dealership pulls your credit, your score could be affected, your ratio thrown off balance and “you’ve just blown yourself out of qualifying” for your mortgage,” Saba says.
“Keep everything status quo,” she says. “Don’t change your job. Keep your money tight. Pay your bills on time and buy yourself some groceries. I just don’t want to see any new credit cards.”
#3. Time is money, right? So maybe you’ve decided to save on both by looking for and buying a home yourself. After all, who needs an experienced real estate agent or reputable lender when you have your mouse and keyboard at your side?
A lot of people.
Local agents have the know-how and experience to navigate the oft-stressful home-buying process, says Meg Casper, vice president of the National Association of Realtors.
They know the market and can provide buyers with information about their neighborhood, such as average utility rates, schools and crime.
As for lenders, Casper suggests buyers consult with them face-to-face, rather that just an online search.
“When you sit down with a lender, you need to provide a lot of documentation,” Casper says. “It’s a whole lot better when you sit one-on-one with someone who knows” what they’re doing.
#4. An enclosed deck in the backyard. A game room in the den. A sun room with bay windows.
In a perfect world, you’d have it all in your inaugural home. But chances are, you won’t. And as your search continues, you may want to compromise on those must-haves that you thought were deal breakers.
Buyers should understand that their first home is “not going to be perfect,” says Matt Brurs, a Movement loan officer in Las Vegas.
So talk with your agent or loan officer about amenities that are important to you, such as how many bedrooms you need or what kind of lawn you want.
“You don’t want to ruin anybody’s dreams but it’s all about setting expectations,” says Brurs, adding that good agents and loan officers can help balance the buyer’s wants with what’s attainable.
#5. When facing closing and moving costs, one might be tempted to skip out on paying for a detailed home inspection.
You may think it doesn’t matter when you first move in but a quality inspector can identify what’s causing that crack in the basement, or trace the source of those damaged roof shingles. Unlike someone who is just a roofer or just an electrician, good inspectors will climb the roof, traverse the attic and go under the crawl space to find the things the buyer won’t see on the surface.
“Because we see the house as a system, we may find that mold may not be caused by a roof leak…it’s caused by moisture at the lower level,” says Frank Lesh, executive director of the American Society of Home Inspectors. “The shingles might look fine but there could be a leak you can’t see.”
He adds: “A house doesn’t have a check engine light. You might think it looks OK because there are no telltale signs but there could be a problem you’re unaware of and the inspector has to look at everything.”
When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix. Make sure you have the time, skills, and desire to embark on home improvement projects before buying a fixer-upper house.
Trying to decide whether to buy a fixer-upper house? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.
Homebuyers can often be easily lured by real estate listings written in the most flowery words. But beware, behind even the most positive words and phrases, nightmares may be lurking -- like expensive renovations and land problems.