The timeline for buying a house can be confusing, especially for first-time homebuyers. With all the steps involved, it can be hard to know what needs to be done and when. As a whole, you can expect the process to take several months, but this can vary depending on how long it takes you to shop for a home and whether you are buying a new construction or a resale home.
To help make things easier on you, we’ve created a homebuying process timeline that describes what to do before, during and after your search for your new home.
While it may be tempting to dive straight into the homebuying process, there are a few steps you should take before officially starting your home search.
Decide what your budget will be. Assess your finances and determine how high of a down payment you can comfortably afford. According to a 2020 report from The Mortgage Reports, the average down payment on a house or condo is 12%. For first-time homebuyers, that number is 6%.
Keep in mind that when it comes time to close on a home, you will also need to pay for expenses such as closing costs, insurance and other miscellaneous fees. There are a variety of online home affordability calculators that can help you determine your budget.
Buying a home is less overwhelming when you have a good idea of what you’re looking for. We recommend creating a new home wish list to help organize your wants and needs as you begin to search for a home. As you create your list, think about what your ideal location would be, what type of floor plan you need, and if there are any must-have features or amenities you want to include.
Once you get your finances in order and create your wish list, it’s time to start looking for homes. It will likely take you several months to find the perfect home, depending on how many homes are available in your area.
While you don’t need a real estate agent in order to buy a home, they can make the process a lot simpler. Real estate agents can research homes for you and recommend ones that match your needs. When you’re ready to make an offer on a house, they can navigate that process as well.
It can be a good idea to obtain pre-approval for a mortgage before you find your new home. Mortgage pre-approval provides assurance to sellers that you will be able to afford a home and can make the timeline for closing on a house go faster.
It usually only takes a few days to receive pre-approval after submitting your application to a lender. During the pre-approval process, lenders will examine your credit score, income, and debt to determine what type of mortgage you qualify for.
Touring homes is one of the most exciting parts of the homebuying process. If you’re working with a real estate agent, they can help you coordinate with sellers and set up viewings. Keep in mind that it may take a while before you find your dream home, so enjoy the process and don’t rush into buying.
After you’ve found the house that’s right for you, you should take the following steps as quickly as possible.
You and your real estate agent will work together to submit an offer to the seller’s agent. It’s important to complete the offer quickly, as it’s possible that another buyer may outbid you if you delay. Although you may have to go back-and-forth with the seller a few times before agreeing on a final price, your offer will generally be accepted or denied within a few days.
After the seller has accepted your offer, you will need to deposit earnest money into an escrow account. Earnest money is sometimes referred to as good faith money, and it is used to hold the home for you until your closing date. The amount of earnest money required is usually around 1%-2% of the sales price of the home and will go towards your closing costs.
Realtor.com estimates that the average closing time is around 50 days. However, the timeline for closing on a house can vary widely depending on what type of home you are buying and how quickly you are able to complete the steps associated with closing. If you are buying an existing house, you can expect to wait a month or two between submitting your offer and closing. But if the house you’re buying is brand new, this part of the homebuying process timeline could take longer.
If you’re buying a new construction home, you will need to wait until the construction on your home is completed before moving forward with closing. This could take anywhere from a few months to a year, depending on how far along construction was at the time you signed your contract.
One of the most important steps of the closing process is obtaining final approval for your mortgage. This usually takes around 30 days. During this time, the lender will send someone to your new home to perform an appraisal. This is done to determine the value of your home and ensure that the lender is offering you an appropriate amount for your loan.
A home inspection should be completed a few weeks before your closing date. A professional home inspector will look for any defects or damages that may not have been apparent when you first toured your new home. Often, you will be able to negotiate with the seller and get them to perform any necessary repairs before your closing date.
Closing is the final step in the timeline for buying a house. On your closing date, you will sign all of the required paperwork to transfer ownership of the home. Your down payment and closing costs are also due at this time. Once the payment is made and the documents are signed, the home is officially yours. The seller will hand over the keys and you will be able to move in whenever you’re ready.
Buying a home is one of the most important purchases you’ll make, and it’s important to be prepared. For additional resources to guide you through the homebuying process, the Brookfield Residential blog has you covered. When you’re ready to start searching for your new home, contact us to learn more about what our communities have to offer.