I bought a home in 2007. There were quite a few surprises, since the home-buying process and mortgage paperwork is anything but straightforward.
One of the biggest surprises, though, was how long it took.
Because of my good credit and modest tastes relative to my income, I expected things to move along quickly. I never thought to ask, “How long does it take to buy a house?” Unfortunately, the mortgage closing process took more than a month.
Some home sales take even longer, though. When I sold that home in 2014, the buyers ended up needing 10 weeks from the time we signed the contract until we could close.
There’s a lot that goes into buying a home with a mortgage, and that means that it can take as long as three months — or more — to complete the process of buying a house from beginning to end. Here’s what to expect.
Review and improve your credit: two to three months
Your credit is a major factor when it comes to buying a home. Before you even begin the mortgage process, it makes sense to check your credit report.
According to a study released by the FTC, one in five consumers had an error on a credit report. Additionally, five percent of consumers had an error that could impact their loan terms.
If you need to dispute a negative item on your credit report or simply want to improve how you look on paper, it can take eight to 12 weeks. If you’re trying to build your credit from scratch, it can take even longer.
Mortgage pre-approval: three weeks
Whether you’re buying your first home or are a seasoned veteran, you need a mortgage pre-approval. To get one, you are required to submit detailed information about your financial situation. The lender uses this information to decide how much you can borrow, and often, what interest rate you can expect.
This process can be as quick as two or three days or can take more than a month, depending on how quickly the lender works and how complete your documentation is.
Find your house: one month
Once the preliminaries are out of the way, you can start the hunt.
You get to decide how long you spend looking for your dream home, but you can speed things up by enlisting the help of a real estate agent. A good agent will work with you to identify neighborhoods and homes that meet your needs and wants while fitting your budget.
When I bought my house, I searched all day, every day, for two weeks and found what we wanted in that time frame. However, for many people, the house-hunting stage lasts about a month.
Make an offer: one week
Now that you’ve found what you’re looking for, it’s time to put in an offer on the house.
It’s important to understand that this stage is not just about making the offer — it’s about agreeing on a price. The seller might make a counter-offer, and you could go back and forth dickering over the final price for days. (Just hope you don’t end up in a bidding war!)
You must also agree on what’s included in the price. Do you insist on a flooring allowance to deal with the threadbare carpet? Are there major structural issues that need to be addressed? If so, include appropriate stipulations in your offer.
Once all’s said and done, a week might go by before you actually sign the offer papers.
Close on the home: one month
It’s not over just because the seller accepted your offer. Now you go through the closing process.
The lender reviews your paperwork — again. A home inspection and title check must be completed. If anything goes wrong, the deal can still fall through.
Make sure you’re ready, too: Sometimes the closing date is announced only a day or two ahead of the transaction, and you could be scrambling to get the money you need.
When answering the question, “How long does it take to buy a house?” there might be special situations that lengthen the process. Because I was self-employed when I bought my house, for example, I was required to submit to an income audit. That took three weeks.
You might also be surprised to discover that being asset-rich doesn’t really help you much. Lenders are more interested in your monthly income than whether or not you have enough cash in the bank to pay off the mortgage.
If you want to borrow despite being asset-rich, the lender may ask you to jump through extra hoops, lengthening the process further.
If you have a special case, talk to the mortgage broker ahead of time to see if you can figure out how much time it will add to the process.
So, how long does it take to buy a house?
As with all things personal finance, the exact timing depends on your situation.
For those who already have a handle on their credit situation, it usually takes about three months to complete the process of buying a house. If you need to fix your credit first, plan for it to take five or six months.