The homebuying process can certainly be an intimidating one. Seeing as your home represents your greatest financial commitment, undoubtedly, you want to make sure you go about the buying process in the best way possible. There is a delicate balance, though, when it comes to your homebuying timeline: you don’t want to rush into a decision – but dragging your feet could lose your house to someone more proactive. So, when it comes to best practices, what is the optimal homebuying timeline? Let’s find out.
Preparation: Now, every buyer’s purchasing process is a little different, so this is a general timeline. If you’re serious about buying a house, you’ve likely already built up your credit score, put a healthy chunk of money away for buying, and calculated your budget. Depending on the buyer, this preliminary process takes one to five years—again, every buyer is different, so most buyers will be somewhere in the middle. Assuming you’ve accomplished these tasks, the good news for you is that you’re not too far away from achieving your home ownership dream.
Get Mortgage Preapproval: You don’t want to waste time looking at houses well outside of what you can be approved for. This is why you should seek preapproval before you get too deep into your home search. You will need to provide your lender with documents proving your monthly income such as pay stubs, bank account statements, the last two years of W2 forms, and two years of income tax returns. Your lender will run your credit and tell you how much mortgage money is available to you and give you a pre-approval letter. You should seek this approval about one month out.
Hire a Real Estate Agent: A few weeks out, you should interview real estate agents. You want to work with the right agent, so speak to several before hiring. When you interview, you should ask potential agents how long they’ve been in the business, how many buyers they’ve worked with, how well they know the market in the specific neighborhoods you’re looking at, and how successful they are when negotiating down the price.
Touring Homes: This is the fun part, but before you get too far long your tours, it is smart to make a list of needs, wants, and maybe even things you can live without. These will help you and your agent scout out and tour only the homes you could genuinely see yourself living in. The timing of viewings varies from market to market. You may be able to tour a house and submit an offer on the same day, but in other markets you may find yourself waiting for months for a house to become available.
Make an Offer and Negotiate: Once you’ve finally found the home of your dreams, the time has come for you to put some money on the table. Your real estate agent will help you put this together. Then it becomes a game of negotiation—does the seller accept, decline, or seek out negotiations? The quickness of this step varies by market: in a buyer’s market or if you’re buying a foreclosure, this will probably be fast, but in a seller’s market, you may be waiting a bit longer for a response.
Inspect and Appraise: After your offer is accepted, your lender will hire a professional to conduct an appraisal. This is an important part of the process, but you don’t need to do anything but wait and hope that the value of the house is greater than the negotiated price. If it is not, you may have to increase your down payment or renegotiate.
You will need to hire a home inspector to determine whether there are any surprises in the home. You typically have 10 days to complete the inspection, but it takes about 24 hours to get the inspection report. If any unexpected problems arise, you may need to renegotiate.
Close: Closing on the home is the last part of the homebuying process. You are now one long appointment away from closing on your house. After making your down payment and closing costs and signing all the paperwork, you are officially the owner of the home (congrats!) and the time has finally come to move in.