How long does it take to buy a house? From the time you decide to buy a home to the time that you finally move in can vary dramatically. The home buying process, while linear in theory, is often full of road bumps, delays, and detours. Read about Home Buying Process below.
Generally, you can expect buying a home to take a few months. Before you even begin looking for a house, you’ll need to prepare your own financial situation. Then you need to search for homes and make offers until you get a house under contract.
Once this happens, the timeline is set, and you’ll have a clear end in sight. But the real estate process is full of surprises.
Are you a first-time home buyer looking for home buying tips? Keep reading to learn how to buy a house and what the process is like.
Getting Your Ducks in a Row
The first step towards buying your dream home is by working on your own financial situation. The three main things you’re going to need are cash for a down payment, a high credit score, and consistent employment history.
Mortgages are very large loans. To avoid losing money, lenders want to be confident that you can make your monthly mortgage payment each month. So they don’t give out mortgages easily.
They want to see consistent work history, with you working in the same industry for at least the last two years. A recent job change could be a red flag. Try not to change jobs, especially if it’s in a different industry, before buying a home.
You’ll also need the best credit score you can get. Your credit score is essentially your trustworthiness rating. It tells lenders how likely you are to make consistent monthly payments. Take a few months to really work on improving your credit score.
Lastly, you’ll need cash for a down payment. These can range from as little as 3.5% down to 20% down plus closing costs. Decide on what type of mortgage program you want to use and save up more than you think you need.
Getting Preapproved for a Mortgage
With all of that taken care of, you can apply for a mortgage. You’ll want to apply with multiple different lenders to see which offers the most money to borrow at the best interest rate.
Once approved, you’ll receive a preapproval letter. This letter lets you start making offers on homes because it tells the seller that you have a mortgage ready to go.
Don’t bother looking at homes until you have this letter ready. They are generally good for 90 days.
Working With a Real Estate Agent
With your preapproval letter in hand, you can now start a conversation with a real estate agent. You may already have someone in mind, or you may be starting from scratch.
Ask friends and family who have recently bought a home for agent recommendations. You’re going to work closely with them, so you want it to be someone you like and someone you can trust.
Make sure they have experience working with clients such as yourself. For example, if you are a new buyer looking for entry-level homes, there’s no sense hiring an agent that focuses on luxury homes.
Once you’ve chosen your real estate agent, it’s time to start searching for homes. You can now begin scouring the MLS for homes in your desired neighborhoods.
Your agent will also know about homes coming on the market before they are listed online. Check out as many homes as possible before making an offer.
Also, figure out what type of market you are in. If it’s a buyer’s market, that means there is a lot of inventory available and less competition. You have more power in these markets, and waiting for the perfect home is a good idea.
In a seller’s market, on the other hand, inventory is limited. With many buyers looking to snag the limited home options, competition is fierce. You’ll need to make offers fast, and you’ll likely need to pay the asking price or possibly even more than the asking price to get any home.
You can find a great home in either market, but the process is a bit different. It’s important to trust your agent with any recommendations they make.
Finish the Home Buying Process by Closing
Once your offer is accepted, you’ll move into the closing process. This generally takes about four weeks.
Closing is the process of preparing all of the documents needed for both the buyer and the seller. There is a lot of communication between your real estate agent and other parties, such as lenders, the seller, the title company, and so forth.
During this time, you’ll just need to wait patiently. You can start packing up and getting ready to move. However, sellers generally have around 30 days after closing to move out. It depends on what you agreed on in your final offer.
Do your best to avoid closing delays by providing your agent with all the information they need right away.
Once the closing is scheduled, you’ll meet up with your agent and the title company, sign all of the paperwork, and walk away with a key to your new home. Congrats, your patience has finally paid off.
Once you’ve closed on the house, you just need to wait for the sellers to move out. This is the time you need to spend packing up your home or apartment. You can make the moving process easier by selling or donating all the stuff you don’t need.
Depending on how far away the new home is, hiring movers can be a great option, especially for larger items. Moving furniture into a house yourself is a great way to damage walls. It’s better to let strong professionals handle this.
Once you moved in, it’s time to make yourself at home. And don’t forget to make that first mortgage payment.
Plan Ahead for Best Results
As you can see, the home buying process is no joke. It takes a lot of work and a lot of time. Make sure you begin the process months, maybe even a year before you actually want to move into a new house.
The more you plan and prepare, the better off you’ll be.
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