How Long Does It Take to Buy a House?
December 29, 2018 | kcallender
Well That depends…
A realistic timeline is very important when you are buying a home. While the process does vary slightly from home to home and the timelines can change, even in the middle of a deal. There are some basic time-frames to keep in mind depending your situation. Most of the time you won’t be walking into your new home within a month keys in hand. Here are the three most common scenarios people encounter when buying a home.
How Long it Takes to Buy a House with Cash?
Buying a house with cash is the fastest way to purchase property. If you have proof of funds that you are going to be using to purchase a home you could be looking at a time-frame of as little as two weeks to close on your home.
After you have an accepted offer if you can get your home inspection done quickly, as well as any post-inspection negotiations, you can move the timeline along at this pace. The closing company or real estate attorney, can have the documents drawn up and ready to go in fairly short order.
There are some things that may slow down a cash sale. One of those being the seller requiring time to find a home or move out. The other big one is the buyer needing the funds from the sale of their current home to close the deal. If you have the money on hand and the house is vacant you could be in your new home quickly.
Buying a Home with a Mortgage Loan?
If the buyer is taking out a mortgage on the home, this process is much longer. This is the way most real estate transactions are done. This is also the one that most people are familiar with when it comes to buying a home.
After an accepted offer is signed the process really gets going. Typically home inspections are done within 7-14 days after the purchase and sales is signed. Any follow up negotiations that are required are done after these as well. While this is going on the buyer is applying for a mortgage with their lender of choice.
After the buyers lender receives the application, it takes on average 3-4 weeks to go through the process to issue a commitment to lend. They are not just sitting on the paperwork to drag things out though! The lender has several step they need to take to insure they can lend the money on the home.
One of those steps is the appraisal process. The lender will contract with an appraiser to evaluate the property and determine the market value of the home. This is in order to ensure they are not lending more than the value of the home. This entire process can take several weeks depending on many factors. Sometimes an appraiser will have to make more than one visit to the property.
Additionally, the buyer will need to provide a number of documents to the lender verifying income, assets and other things. When they have collected everything the entire loan is put through a review process. After that a commitment letter can be issued.
The whole process takes on average 35-45 days for a typical loan. Some loan programs and homes will require more time while others can be done in a shorter period. The process will vary depending on your location. Your real estate agent and lender will be able to help give you a more accurate timeline for your situation.
What happens after the mortgage commitment?
After the lender issues the mortgage commitment, they may have additional conditions that the buyer has to meet before they will give “clear-to-close”. The lender may request things like – A gift letter for a grant from a relative for money given to the buyer.
Because of the TRID disclosure rules, it may take up to two weeks after a mortgage commitment is given until you can get the clear to close. This can add another 10-14 days on top of the 35-45 days to get to this point. TRID disclosure rules require at least 3 business days between the disclosure documents and the actual closing day.
On closing day, the buyer signs the mortgage documents along with the other required transfer paperwork, and the official deal is done! Buyers get the keys at the closing most of the time. Although, some sellers request to wait until it is officially recorded with the registry of deeds.
From the beginning of the offer to the passing of the keys can be any place from 55-65 days. You may hear from some lenders that they can close much faster, and sometimes that’s right. To be safe you should plan on a minimum of 45 days but be prepared for a little longer if you encounter any hiccups along the way.
Buying a Short Sale Property
Thinking about buying a short sale property? Well throw everything you just read out the window. Short sales are a very different animal entirely, and can take several months to close depending on the amount of work the seller has done ahead of time with their lender.
Often times, buyers will not even apply for a mortgage until after the sellers lien holder gives approvals for the short sale. Occasionally you may run into a seller who has started this process beforehand. Most of the time this is not the case and it can take time.
Getting a shot sale approval from the lien holder is not a quick task. This process can sometimes take a month or more to complete. If you have flexibility in your timeline these properties can be a great way to get a very good deal on a home. Just don’t expect them to close quickly.
An experienced real estate agent will help guide you through the process, from looking for a home, to getting a mortgage, to the closing table and signing the final documents and beyond.