Everyone always wants to know, how long does it take to buy a house? On average, it takes 4 ½ months to shop for a home, plus an additional 30 days to close escrow once your offer is accepted. But of course, factors like the time of year, financing needs (or lack of), the type of home you’re looking for, and of course, housing inventory can change this.
Finding a home you like isn’t always the hard part. When inventory is low, as it is now, it is not unusual to submit multiple offers before having one accepted. According to the Zillow Group Consumer Housing Trends Report 2020, 42% of buyers made multiple offers before succeeding in buying a home. Don’t discourage, stay focused on finding a home that meets your criteria and is one you love!
Ok, so you are ready to purchase a home. What’s the next step? Let’s look below at the steps required to get you those keys!
Get Your Finances in Order
Hopefully you have been saving and have at least 20% of the purchase price ready to apply for the down payment. If you aren’t quite there yet, it may be ok. In a competitive market, at least 20% is ideal but it doesn’t mean you can’t buy a home if you have a lower down payment. Regardless of how much you plan to provide as the downpayment, make sure you save an additional 2-5% of the purchase price to cover closing costs.
Do you have a rough idea of what your credit score is? Take a look to see if there is anything you can do to raise it. Your lender can also help you with this during the pre-approval process as it will affect your interest rate. In general, it is helpful to pay down outstanding loans (business, car, student) and resolve any discrepancies or errors. Of course, you don’t want to make any large purchases, take out any new loans or have a change in employment or income as they may affect your debt-to-income ratio. Your lender will use this information to calculate your annual income and monthly debt to help determine what you can afford.
Obtain A Pre-Approval
Choose a lender that is well respected and has a proven track record. Not sure where to find one? Ask us! As you will learn, obtaining the loan approval during escrow is key to closing on time. There are a lot of moving parts and you will want a lender who can keep everything on track. Once you have selected a lender, it’s time to get pre-approved. You’ll need to provide copies of bank statements, pay stubs and tax returns. Most pre-approval letters are good for up to 90 days and will need to be submitted with your purchase offer.
Let the Fun Begin
Chances are you have already started a casual home search online but if you haven’t, now is a great time to start! While you are looking, make a list of what your needs and wants are for your next home. Once you have your pre-approval letter, Arrive Real Estate Group will set you up on a custom search to notify you when new homes come to market. And then the real fun begins! We LOVE looking at houses, big surprise right?! We can’t wait to show you around our communities and hopefully have some fun along the way.
Once you find a home you love, we will provide you with the data to help you make your offer! We will look at historic data as well as the current performance of the market and what makes the most sense to you. Ultimately, it is your decision as to what you offer. We want to make sure you are comfortable with the house, price and terms, no pressure from us!
The waiting game begins once your offer is submitted and can sometimes take up to a day to receive a response. So while your fingers are crossed, keep in mind it may not be accepted. On average, buyers have submitted an average of four offers before having one accepted. And if you do receive a response, in a competitive market your offer may be accepted as is, but often times will be countered on either price or terms. It may take negotiating back and forth before both parties agree on the terms and the purchase process officially begins.
Open Escrow and Pack Those Boxes
Congratulations, your offer is accepted! Typically the clock starts now the 30 day escrow period begins. Your lender will get to work with their underwriters to approve your loan. This will likely include items like a home inspection and appraisal. If the Seller didn’t provide inspections upfront, you’ll want to schedule them as well as the appraisal ideally within 10 days of getting into contract. Repair requests or credit negotiations can be stressful but you want to be able to buy your home with confidence and a thorough understanding of its condition. There will be plenty of documents to sign and complete from your lender, Realtor and escrow officer. Make sure you complete them as soon as possible so no delays occur.
Now that you know what day you will close and what day you receive the keys, it’s time to start preparing for the move! If you plan on hiring movers, talk to them as soon as possible as many are booked out at least a few weeks in advance. If you’re renting, it’s time to submit your notice to vacate! Don’t forget to file your change of address request with the post office and begin to set up utilities at your new home.
Key Day is the Best Day
Closing week is an exciting time! No sooner than a couple days before closing you’ll do a final walkthrough to visually inspect the condition of the home. This is especially important if you requested any repairs and should be done after the Seller has vacated the property. During this time you’ll coordinate with a notary to sign the closing paperwork.
Once the sale has been recorded at the county offices, congratulations, you officially own the home! Woohoo! If you have allowed the seller to remain in the home with “rent back” you will have to wait a little longer to get the keys. Otherwise, your Realtor will meet you at the agreed upon time to hand over the keys. Seeing the smile on your face as you get the keys is one of the best parts of our job! You can now begin to make your house a home.
Remember, this is a general overview of the home buying process. No two transactions are ever the same, ever! It is important you work with a Realtor and lender who you trust and who can guide you every step of the way. At Arrive Real Estate Group, our job does not end when we give you the keys. We remain committed to helping you any way we can and to continue to build the relationship we created. Contact us today to get started and discover how we can help you!