Investor’s Basics Series: How long is the house buying process?
Now that you have done your research and asked yourself the right questions to find the perfect property, it’s time to check the timeline to make sure you know what you are getting yourself into.
Below are the steps needed to buy a property with the average time it takes to complete them:
Research (1-14 days)
You need to take your time to know what you are looking for. Do your research on the area you are interested in, you can use the blog post mentioned above to see what you need to ask yourself before you start looking for a property.
Find an agent (7 days)
Your agent will be your most trusted advisor during the whole buying process, so you want to make sure you pick the right one.
If you need help, you can ask your family, friends or other investors for any suggestions. A good agent will help you navigate through everything and will be able to help you land a good deal.
Get pre-approved (8-10 days)
It is better to be pre-approved for a loan if possible, since that will tell the owner that you are serious about buying the property. It is also important to get an early start on the process so you have the time to gather the necessary documents and to give the lender company time to work through their processes without pressure.
House hunt (Depends, from 7 days to a few months)
This step might be the most entertaining one since it involves scouting several areas and visiting several properties, but it can also be tiring. The time it takes depends on a lot of things such as your needs, the inventory in the area you want and the time of year.
Make an offer, negotiate and sign the contract (1-7 days)
In this stage you will need your agent to work with you to get the right price, and to walk you through the contingencies and other aspects of the contract. You will want to give the buyer 1% – 6% earnest money and have your pre approval letter ready to be sent.
In case the seller counteroffers, make sure you respond as quickly as possible so you don’t lose the property.
Get a final approval on the mortgage (21 - 30 days)
After your offer is accepted, you need to work out a few more things. The lender you chose will need you to gather more financial and personal documents. Some other things they will require are:
- Home inspection – The inspection itself will only take about 2-3 hours, but you want to make sure you schedule it at least 3 days in advance to make sure the company gets it done on time.
- Home appraisal -Again, the appraisal will only take a few hours, but you should schedule it up to 5 days in advance since it will take some time to file the report to your lender and for them to process it.
If you are lost on appraisals, you can read our article on it here.
You need to start with the mortgage approval as soon as possible since you will most likely have to work on several things at once.
Close on the property (40-50 days)
Some final items you need to take care of are the final walk through to check that the repairs have been completed and that no other damages have appeared, finding a homeowners insurance company and signing the final contract.
Even though this whole process may seem like a lot, it is completely worth it! Keep calm and enjoy every step of the way until you finally get the keys.