The process of buying a house can be time-consuming — to the tune of six or more months from beginning to end in the current tight market. On average, you’ll spend two to five months shopping for your house and up to about two months from contract to close. If there are other factors involved — for instance, if you have to clean up your credit first — it can take even longer.
So how long, exactly, does it take to buy a house? It varies. But the process can be broken down into six steps, each of which takes a fairly predictable amount of time.
You might not need to go through each step, so if one doesn’t apply, skip to the next. Before you even start looking at homes, get a better idea of the time it will take to make this major purchase by learning about the homebuying process.
1. Fix Credit Problems Before a Lender Credit Check: 8 Weeks
Depending on the kind of loan you use, getting approved for a mortgage usually requires that you have good credit, so you’ll want to check your credit report and your credit score before you start looking at homes.
So what’s considered a good score? FICO, the most commonly used credit-scoring model, breaks scores down like this:
- 800 and up: Exceptional
- 740-799: Very good (above average)
- 670-739: Good
- 580-669: Fair (below average)
- 579 or less: Poor
How good your score needs to be to qualify you for a mortgage depends mostly on the lender and the type of loan you choose. Whereas a conventional loan typically requires a 620, data from ICE Mortgage Technology (formerly Ellie Mae) shows that the vast majority of conventional-loan borrowers have scores of 700 or higher. FHA loans can be obtained with just 3.5% down for people with scores of at least 580 and 10% down for people with scores of 500 to 579, but nearly all FHA borrowers have scores of 600 or higher. This suggests that meeting minimum requirements might not be enough to be approved for a loan.
A credit score is based on factors like credit usage and history of on-time payments, but it’s not just your spending and payment habits that affect your score. Mistakes in your credit report can also sink your chances for a good interest rate, or even prevent you from being qualified.
Order your yearly, free credit report early in the homebuying process and search for errors to challenge. All three major credit bureaus — TransUnion, Equifax and Experian — respond to disputes within 30 days. From there it takes another month for the changes to reflect, so plan to allow approximately eight weeks at a minimum to resolve these issues.
If your credit needs cleaning up, you might need even more time. However, paying down debt to reduce your debt-to-income ratio could boost your score in as few as 30 days.
2. Research Potential Houses and Neighborhoods: 3 Weeks
Looking for homes is significantly more streamlined now than in years past. Websites such as Zillow and Trulia make it easy to compile a short list of properties even before you work with an agent. Sites like these can be used to filter specific search parameters and help you learn about your local market, estimate the expenses related to closing on a house and get a clearer sense of where you want to live.
Give yourself and your family a few weeks to do your research and discuss your options. This is also a good time to make a wish list of features you must have, features you’d like to have and features that would be deal breakers. You might need to revise your criteria after you start seeing what’s on the market in your budget, but thinking through your wants and needs now will help you hit the ground running when it’s time to start shopping for homes.
3. Find a Real Estate Agent: 1 to 30 Days
According to Zillow’s 2021 Consumer Housing Trends Report, approximately 80% of homebuyers work with a real estate agent to purchase a home. Although you can connect with an agent within a few minutes of searching for one online, spending a few weeks researching and interviewing agents can’t hurt — especially if you want to find your dream home. Buyers need to trust their agent and vet them to ensure they’re diligent, competent and honest.
Get references from friends and family, and hire someone local with intimate knowledge of the area in which you want to buy. Ask questions like:
- How long have you been in the business?
- Is real estate your full-time job?
- How many buyers do you work with at once, on average?
Even if your state allows agents to represent both the buyer and seller, it’s generally a good idea to have your own buyer’s agent who’ll represent you and you alone in the transaction.
4. Get Preapproved for a Home Loan: 21 Days
You’ll usually need a mortgage preapproval to submit with an offer on a home, and getting it before you start house hunting will help you move quickly when you find the one you want.
Unlike a prequalification, which relies on unverified, self-reported information, a mortgage preapproval is issued only after the lender has verified credit, income and other personal and financial information. It gives you a much more precise idea of whether you qualify for a mortgage loan — and if so, how much you can borrow. As a result, home loan preapproval can streamline the entire process and help when you’re getting approved for a mortgage. It does, however, require that you submit an application with detailed, accurate records related to your finances, credit history, income, assets and debt. The standard preapproval process can happen in minutes or, at most, a day or two.
With a little more time, you can get a fully underwritten preapproval to present when you make an offer on a home. With that, the financial information you submit goes to an underwriter for review. Although an underwritten preapproval doesn’t represent a firm loan commitment, it does provide sellers with the highest degree of assurance that you’ll be able to finance your purchase. Expect a fully underwritten preapproval to take up to three weeks.
It’s important to note that a preapproval is typically valid for 60 to 90 days, but your rate will probably be locked in for just 45 days, so you’ll want to move quickly once you’re preapproved.
5. Find a House and Make an Offer: 2 to 5 Months
The agent you select will send you listings that meet your criteria, and you can decide which properties you’d like to see. And, of course, you can search for properties on your own and ask your agent to schedule showings.
Once you find the home you want, you’ll work with your agent to prepare an offer. The agent will then present the offer to the seller, and the seller will either accept, reject or counter.
Getting an offer accepted can take a lot of time in the current market, which is extremely competitive because there are more buyers than available homes. In fact, data from sites like Realtor.com and Zillow indicate average times ranging from 2.5 to 4.5 months.
How long does it take to close on a house once your offer has been accepted? That depends on a number of factors, but the average is nearly two months.
6. Get Ready To Close: 50 Days
According to ICE Mortgage Technology, as of Sept. 2, a conventional purchase loan takes 50 days to close, on average, and an FHA purchase loan takes 49 days. Of course, that includes underwriting time, which would be unnecessary if you previously received a fully underwritten preapproval. However, loan underwriting is just one of several things that happen between the time an offer is accepted and the day you close on your home. Here are some of the other things that typically occur simultaneously:
One of the first things most buyers do after their offer has been accepted is to order a home inspection.
“Buying a home is typically the biggest investment you will ever make, so it’s important to get a home inspection because the inspector should be able to discover and document defects that may or may not be obvious to you as a prospective buyer,” the International Association of Certified Home Inspectors notes on its website. “Such defects can range from simple replacements or repairs, to severe damage or safety and health concerns.”
An inspection typically takes two to three hours, but getting the inspector to the house can take up to a few days, and it could be another day or two before you get the inspector’s report. Most real estate agents can recommend an inspector with whom they frequently work, but buyers can select their own inspector.
Your lender will schedule an appraisal shortly after the seller accepts your offer. The appraisal is an opinion of value prepared by a licensed appraiser. The lender uses the appraisal to verify that the home is worth the purchase price. It can take a week or two for the appraiser to visit the property and prepare the report.
If the home appraises for at least the purchase price — or the amount specified in your appraisal contingency, if you included one in your offer — you don’t need to do anything further. If the appraisal comes in low, you’ll have to bring more cash to closing or negotiate a lower price with the seller.
You’ll choose a title company to investigate the home’s chain of ownership and verify that there are no judgments, liens or other encumbrances on the title. The title company can then issue title insurance, which protects the lender against claims resulting from such encumbrances. You’ll pay for the lender’s title insurance as part of your closing costs, and you can also purchase a policy for yourself.
In the event the title company finds a problem, the issue will need to be resolved. How long it takes depends on the issue. Whereas an IRS tax lien could take a month or more after the tax has been paid, the title company might get a missing release from an old, paid-off mortgage within a couple of days.
If the lender has all the information and documentation it needs while it’s underwriting the loan, and everything checks out in your favor, the lender will let you know that you’re clear to close. However, many buyers receive a conditional approval first.
A conditional approval is just what it sounds like — the lender will approve your loan once you’ve met one or more final conditions. Common conditions include gift letters explaining the source of down payment money, an explanation for a large withdrawal from a bank account and verification of assets such as retirement accounts. If your new home is a long commute from your job, you might even have a condition requiring additional proof that your home will be your primary residence.
The lender will clear your loan to close as soon as you’ve met all of the conditions. You’ll already have set a tentative closing date by this time. Your clear-to-close notification will generally confirm that date, but if it has already passed, or if the notification comes too late to get your down payment and closing costs wired over, you should be able to schedule a new closing appointment to take place within a couple of days.
Avoid Unnecessary Delays
The homebuying process is different for everyone, and the average time to get a home loan approval varies by homebuyer. While some potential delays are beyond your control, there are things you can do to minimize the time it takes to buy a home:
- Shore up your finances and avoid large purchases and cash withdrawals.
- Focus your search on homes that are within your budget.
- Be clear about must-haves and deal breakers.
- Present your highest and best offer upfront.
- Comply with your lender’s requests for information and documentation.