Thanks to shows on HGTV and others, many buyers tend to think that the home-buying process should be a swift one. Unfortunately though, this isn’t always the case. Like any major life change, there can be setbacks and obstacles. That’s why it’s crucial to be realistic about the length of the home buying timeline from the start. Here’s a look at what happens before, during, and at the finish line — when you finally close on your new home!
Step 1: Pre-approval
Pre-approval Time Length = Up to 10 days
Some might think this length is an overestimation. And it certainly is possible that you could obtain an official pre-approval in as little as 3 days.
However, the flip side is also true – the process can also be lengthy as the bank needs time to look at everything.
This is why the sooner a buyer talks to a lender, the better.
If you’re considering buying a home, speak to a lender before you’re ready to start the process. That way, you have time to fix any credit issues, shop around, and save a little more money if necessary.
In fact – three to six months ahead of time is a great place to start.
Step 2: Shopping For A Home
Shopping For A Home Time Length = 30 days to 6 months
Knowing what you want in a home, where you’d like to live, and the price point you want to stay within are all great ways to narrow down your dream home search.
But even if you know all of these elements, on average it can still take a few months of active searching.
It can even take longer depending on certain variables which include:
- The amount of inventory available
- If the market is fast-moving and lacks sufficient inventory to keep up with the demand, it might take buyers longer than expected to find a house which both fits their budget and fulfills what they need.
- The speed of the market
- As mentioned above, a fast-moving market can cause inventory problems.
- On the opposite end, a slow-moving market can mean potential sellers might not list their properties right away for fear it will sit for too long.
- Either way, this could delay the buying process.
- Whether or not the home is a short sale or foreclosure
- Houses that are conventional sales can move pretty quickly.
- However, if a buyer chooses to make an offer on a house that’s in foreclosure or cataloged as a short-sale, that buyer has to wait for the bank (rather than the seller) to approve the offer.
- This can take months or even years!
- The type of mortgage a buyer has
- Some sellers don’t want to work with the requirements of an FHA or Sallie Mae mortgage.
- This means they’ll opt not to accept offers from buyers with these types of loans.
- If a buyer finds a house that they want to make an offer on, but the seller won’t accept the type of loan that buyer is pre-approved for, the buyer has three options:
- (1) Go back to the lender to modify the loan
- (2) Search out a lender that will approve a different kind of loan, or
- (3) Find another house.
- No matter which of these scenarios occurs, all of them will add length to the process.
Step 3: Making An Offer
Making An Offer Time Length = Up to 3 days
Once a buyer finds a home he or she is interested in, it’s time to make an offer! 
After the buyer and the agent decide the terms of the offer and submit it, the seller has anywhere from 48-72 hours to accept or deny that offer.
While this amount of time can vary, the 48 – 72 hours is the standard.
The seller could come back with a counteroffer. The buyer then has a certain amount of time to deny or accept. The seller will submit the counteroffer with a date that the buyer must act on.
Here in Massachusetts, there are two purchase agreements that must be submitted. The first is the Offer to Purchase and must be executed when making the offer.
When making an offer, the Offer to Purchase is submitted and outlines the details of the contract. Once the Offer to Purchase agreement is accepted by the seller and funds are collected, then comes the second purchase agreement required in Massachusetts: The Purchase and Sale Agreement.
Step 4: Executing The Purchase and Sale Agreement
Purchase and Sale Agreement Time Length = 10 – 14 days
The Purchase and Sale Agreement replaces the original Offer to Purchase and is the official contract that sets terms for closing.
Because this agreement can require negotiations, it generally takes 10-14 days to have all parties reach a consensus for the final Purchase and Sale Agreement.
Step 5: Inspection and Appraisal
Inspection and Appraisal Time Length = Varies but up to 2 weeks
Technically, this time frame could be combined with the time frame of executing the Purchase and Sale Agreement.
The inspection frequently happens within that 10-14 day period between the Offer to Purchase and the Purchase and Sale agreements.
However, appraisals can also be scheduled and completed after the Purchase and Sale Agreement is executed.
Step 6: Closing
Closing = 30 – 45 days
Once the offer is in and the inspection and appraisal are completed and approved by the lender, it’s finally time for you to close on your new home!
The lender will be the one to set a closing date, but a buyer should keep in mind that this date might change. Currently, the national average to close on a home is 50 days.
But once again, this depends on an array of variables such as how quickly the underwriting occurs, the type of loan a buyer has secured, as well as the local market.
In Boston, where the market moves at an accelerated pace, closing can happen in as little as three weeks.
Conclusion
In total, a buyer is looking at an average of 90-120 days to go from pre-approval to closing on a home.
As we continually stated, such a timeline can be shorter or longer depending on a wide range of factors unique to the market as well as the individual buyer and seller.
If you’re hoping to be in a new home, the best thing to do is to first focus on ensuring your financial situation is top notch. Once that’s in place, you can then determine when you’re ready to take these next steps.
Though this journey might seem long, it’s worth it in the end to wind up with your dream home!
