How long does it take to buy a home?

The amount of time it takes to buy a home can vary greatly depending on several factors. If you’re ready to buy, here are the main steps — and timelines — you can expect. (Shutterstock)

The time it takes to buy a home depends on several factors, including location, current market inventory, and your financing needs. Because of this, the timeline can vary with every transaction — often taking anywhere from four to 12 months.

Although the process can be lengthy, it doesn’t have to be complicated. People who buy property usually have to follow the same basic steps. This includes everything from the initial house hunt and finding a real estate agent to making an offer and closing on the deal.

Whether you’re a first-time homebuyer or are looking for your next property, being prepared can help make the process go as smoothly and quickly as possible. 

Credible makes finding the right home loan easy. Compare mortgage rates from different lenders today.

How long does it take to buy a home?

Not only is buying a house one of the biggest financial decisions you’ll ever make, it’s also a lengthy process. After all, it takes time to make an informed decision, and every step adds to how long it takes to buy a home. That’s why people spend, on average, four months to a year to complete the process.

Of course, the process of buying a house is a little different for everyone. The exact timeline can vary based on your credit, finances, the local market and your goals.

As you prepare to buy a home, here are the main steps — and timelines — you can expect along the way.

Review your credit

• Estimated time to complete: One day

Unless you’re making an all-cash offer, you’re going to need to apply for financing through a mortgage lender. Before you do this, check your credit score to make sure you qualify for a home loan. This usually only takes a few minutes.

With good credit, you have a better chance of getting approved for a lower interest rate. The lower your interest rate, the more money you could potentially save over the life of your loan.

Many lenders have minimum credit score requirements as well, depending on the type of home loan. If you’re applying for a conventional mortgage, for example, you’ll typically need a 620 credit score or higher. For an FHA loan, you’ll need at least a 500 credit score.

You can get a free copy of your credit report from all three major reporting bureaus — Equifax, Experian, and TransUnion — once a year at AnnualCreditReport.com. When you request your report online, you’ll typically get it right away.

Review your report for any errors that might be bringing down your score. If you do find errors, dispute them with the reporting bureau and the business that reported the incorrect information. This could take some time, during which you can begin saving up for a down payment or looking for a house.

Get your finances in order

• Estimated time to complete: Several weeks to several months

One of the first things you should do when making a major financial decision, like buying a home, is determine how much you can realistically afford. If you already have a budget and have saved up for a down payment, this could be a quick process. Otherwise, it could take several months or more.

Start by calculating your current total monthly income and any other assets you have (e.g., cash savings) alongside your monthly spending. From there, consider any other fees that come with purchasing a home, such as:

• Upfront costs (e.g., down payment or earnest money)
• Monthly payments of principal and interest
• Property taxes
• Homeowners insurance
• Private mortgage insurance (PMI)
• Closing costs (typically 2% to 5% of the purchase price)
• HOA fees (if any)
• Other fees (e.g., prepayment penalty)

Don’t overextend yourself. If you’re not quite ready to buy a home yet, take the necessary time to get your finances in order.

Get pre-approved for a loan 

• Estimated time to complete: Three to seven days

Although you can get pre-approved for a mortgage loan after finding a real estate agent, it’s generally better to do it first. With a pre-approval letter, you can show a seller that you’re serious about buying their home and are qualified to do so.

To get pre-approved, you’ll need to submit certain documents verifying your income and credit situation. This includes bank statements, recent tax returns, pay stubs and debt information. If you’re applying with a partner, they’ll need to submit their information too. The process can often be done online.

You don’t have to commit to the first pre-approval letter you receive. Take a few days to compare offers from multiple lenders before choosing one to ensure you get the best rates and terms.

After getting pre-approved for a mortgage, avoid making major changes to your credit or financial situation — such as changing jobs or applying for a personal loan. Any big decisions could affect your eligibility and delay the homebuying process.

Credible can help you compare rates from various mortgage lenders. It’s easy and only takes a few minutes of your time.

Shop around 

• Estimated time to complete: Several days to six months

The housing market is currently very competitive. Sixty-five percent of homebuyers make an offer within three days of viewing a listed property, according to a Bank of America report. Some people offer well above asking price or waive certain things — like the home inspection — to get ahead of the competition.

However, that doesn’t mean you should rush the process. Shop around until you find the right home for you. Keep in mind that your pre-approval offer is only good for 30 to 90 days, depending on the lender. If the house hunt takes longer than this, you’ll have to get a new pre-approval letter.

Choose a real estate agent

• Estimated time to complete: A few days

Around 86% of buyers use a real estate agent or broker to buy a home, according to the National Association of Realtors. A good real estate agent will advocate for you, while making the homebuying process much easier. Check out several local real estate agents until you find the right one.

Make an offer and negotiate the contract agreement 

• Estimated time to complete: One to four weeks

Once you’ve found the right home, it’s time to make an offer. If the seller doesn’t accept your offer right away, try negotiating the price and terms. Negotiations can increase how long it takes to buy a home, but they’re often necessary.

If competition is fierce, consider making an earnest money deposit to help prevent the sale from falling through. To further improve your odds, you may need to make an offer above listing price. 

Finalize the escrow process (one to three months)

• Estimated time to complete: One to three months

After the seller accepts your offer, it’s time to complete the escrow process. This involves:

• Securing financing: It can take anywhere from 30 to 60 days to get a home loan from when you submit your application documents to when the loan is approved.
• Review your Closing Disclosure: This document outlines the details of the mortgage loan. Compare it with your Loan Estimate to ensure everything matches up with what you expect.
• Get an appraisal: A home appraisal can determine the property’s value. If the home is appraised at a higher value than you negotiated, you may need to renegotiate the contract with the seller. Otherwise, your home lender may not approve the loan. This can take up to a week.
• Schedule a home inspection: Many lenders require you to get an inspection within 10 days of applying for a loan. The inspection will reveal if there are any critical issues with the house, such as lead paint, mold, or electrical wiring problems. If there are, you can renegotiate the contract.
• Purchase homeowners insurance: A homeowners insurance policy is required to buy a house. If you put less than 20% down, you’ll also need private homeowners insurance (PMI), which is an additional cost.
• Complete a title search: A title search verifies that the seller has the right to sell the property. It can take one to three weeks to complete.
• Do a final walk-through: A day or two before closing on your new home, do a final walk-through to ensure the seller did everything as agreed in the contract. This includes things like final repairs or changes.

Sign the final documents 

• Estimated time to complete: One day

If all goes well, it’s time to sign the paperwork and get the keys. At this point, you may need to bring a cashier’s check or wire money for any remaining closing costs. Once everything’s signed, you are officially the new homeowner.