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There’s a lot of teamwork involved with buying a home, from the real estate agent to your loan officer, home inspector, title attorney and the rest of the crew. While the collaboration ensures you make a good purchase, it also makes for a complex and lengthy process.
“Most of the ‘slow’ parts of the homebuying process are the human parts,” says Nobu Hata, chief executive officer at Denver Metro Association of Realtors. That’s why “good communication is key here.”
Stay connected with your real estate agent and mortgage lender throughout the homebuying process. Respond quickly to any questions they have or requests they make.
The homebuying timeline can stretch across three months or more. But knowing what to expect and communicating through every milestone can speed up the process. Here’s how to get into your new home as quickly as possible.
What Are the Steps to Buying a House?
When buying a home, think about the timeline as two major segments: searching for the home and closing on the loan. The steps leading up to the mortgage application could take up to two months. Once you get there, the closing timeline might take 30 days or longer. In January 2021, the closing process took 58 days on average, according to a report from ICE Mortgage Technology, an origination platform provider.
Prepare yourself by understanding the steps involved and how much time you can expect to spend on each of them:
1. Get Pre-approved
Average time: 1 week
Setting your budget is the first step in the homebuying process. To help you do that, visit a mortgage lender and ask for a pre-approval letter. They’ll pull your credit and ask questions about your income, debts, and assets.
This puts you on the right track because “you might think you can afford X, but the reality is you can probably only afford Y,” says Ron Haynie, senior vice president of mortgage finance policy for the Independent Community Bankers of America. The pre-approval letter lays out your true financial picture.
From there, you can look at homes in your price range and show sellers you’re serious about your offer because you already have a lender onboard.
To speed things up, gather all your documents before contacting the lender. These usually include:
- Two years of W-2 forms
- Most recent pay stubs
- Two years of federal income tax returns
- Two months of bank statements
- Identification such as a driver’s license
You don’t want scrambling for paperwork to be an inconvenience that stops you from locking down your future house.
2. Hire an Agent and Look For a Home
Average time: 4 weeks
The next step is hiring a real estate agent to help you find a home. They’ll set you up with multiple listing service (MLS) updates so you know what’s for sale in your area.
“Your real estate agent is a guide,” says Nicole Rueth, producing branch manager with the Rueth Team of Fairway Independent Mortgage Corporation in Colorado. Your agent will help you make decisions and should be an “advocate,” says Rueth. “They should be the person that is like your mom or your therapist and your teacher all rolled into one.”
Real estate agents can help you save time by showing you homes within your budget and located in neighborhoods that fit your needs. Every time you hit a milestone, your real estate agent is already preparing you for the next step.
3. Make an Offer and Negotiate
Average time: 1 week
Once you find the perfect home, your agent will submit an offer letter to the seller. They’ll help you come up with an offer price and a deadline, but you should know in advance how much you’re willing to spend.
“The ‘right number’ to assert on the contract is both an art and a moving target in a competitive market,” Hata says. If you want room to negotiate, make the initial offer lower than the max you can pay. (Your pre-approval letter can help guide this amount.) You can also negotiate the closing date, request seller credits, and include contingencies in the offer.
This piece of the timeline is flexible and could take several days because the seller can either accept your offer or negotiate until you both settle on price and terms. Once that is final, both parties will sign a purchase agreement.
4. Schedule a Home Inspection
Average time: 1 week
An inspection is the real estate equivalent to a doctor’s physical exam, Hata says. It’s a critical piece of the homebuying process because it may reveal flaws that only a professional can discover.
While the home inspection itself only takes a couple of hours, you’ll need to schedule an appointment that works for you, the inspector, and the seller. During this process, the inspector walks through the home and evaluates the major systems, outlets, appliances, walls, ceilings, and floors. You’ll receive a report that lists any problems.
“Any home that’s lived in prior will have some bumps and bruises,” Rueth says. “The question is, does this home have broken bones?”
If that’s the case, you’ll need to figure out how you want to deal with those issues. This is your chance to negotiate with the seller to fix any problems. If you can’t reach an agreement, then you could still walk away from the purchase if your contract allows it.
5. Apply For a Mortgage and Compare Offers
Average time: 1 week
Once you make an offer on a home, you can officially apply for a mortgage. While you could speed up the process by going with the bank that handed you a pre-approval letter, it’s better to take your time. Gathering mortgage rate quotes from multiple lenders can actually help you save money in the long run.
According to a Freddie Mac survey, borrowers could save about $1,500 over the life of the loan by getting at least two rate quotes. And if they get five quotes, borrowers could save as much as $3,000. Once you have several of these quotes in hand, use the best offer to negotiate with the other lenders. You can ask them to match (or beat) the interest rate, lower the closing costs or speed up your closing timeline.
6. Communicate During the Underwriting Process
Average time: 4 to 8 weeks
Once you choose a lender, the bank’s underwriter will order an appraisal of the home you’re buying and check out your financial health.
The underwriter is the “true workhorse” of the mortgage process, Hata says. They ensure “both the buyer and the home are a good investment for the bank.”
The bank takes on most of the work during this part of the mortgage timeline. But good communication can help speed up the closing process. If the lender has questions and requests additional documents, get back to them quickly. The process slows down if you take days to follow up, forget to tell the lender about important changes (like a job switch) or take on new debt, Rueth says.
7. Close on the Home
Average time: 1 day
Closing day is the last step in the process. Before you sign the closing papers, you’ll do a walk-through of the property “to make sure that any of those ‘broken bones’ in the home have been resolved,” Rueth says.
Provided everything looks good, you’ll move to the closing table where you’ll pay your closing costs and sign a pile of paperwork.
“A lot of those documents you actually get prior to closing,” Haynie says. Read the closing disclosure before closing day so you’re not trying to decipher everything on the spot. “The closing agent should walk you through every document, though, and explain what everything means.”
Remember to bring anything your lender requests, like an identification card and a cashier’s check for closing costs. After signing the paperwork, you’ll get the keys to your new home.
What You Can Do to Speed Up the Homebuying Process
People in the mortgage industry have seen it all when it comes to buying a home. Here’s some of the best advice on ways to efficiently manage the process:
- Check your credit before applying. Your credit score has a major impact on whether you qualify for a mortgage and the interest rate you get. Before applying for a mortgage, pull your credit to see where you stand. Credit score requirements vary with every lender and mortgage program. But if your score is on the low end, take steps to improve your credit before approaching a lender.
- Make a list of what you want. Narrow down the type of home you want, where you’re looking to buy, trade-offs you’re willing to make, and how much you’re comfortable spending. This will help you “pull the trigger” when you need to make quick decisions, Hata says.
- Respond to requests quickly. When your mortgage lender needs more documents or has questions, follow up as soon as possible. “Responsiveness is one of the key indicators of success,” Rueth says.
- Secure your team in advance. You can research real estate agents, home inspectors, homeowners insurance companies, and other ancillary service providers before you need them, Hata says. When you’re ready to take any of the homebuying steps, you’ll know who to call.
- Hold off on applying for new credit. When you’re buying a home, it’s wise to not “ask for or move money until after you’ve signed on the dotted line at closing,” Hata says. Buying a new car, running up a credit card balance or financing new furniture could make your debt-to-income ratio go haywire and slow down the closing process.
“There are so many pieces to the homebuying process, and no one entity controls all the pieces of the puzzle,” Haynie says. “That’s why you’ve got to stay actively engaged and help manage the process through as much as you can.”
Remember that a little preparation and patience over a few months can result in many happy years — even decades — in your dream home.