Timeline of Home Buying Process

Buying a new home, how long will it take?

There are no absolute answers to the question posed in the sentence above: How long will it take to buy a new home? The sheer expense of a home dictates that buyers be educated, organized, wary and flexible during the home buying process. The home buying process can vary widely depending on the type of home you are buying and the market you are buying it in. If you are buying a new home, it can depend on your builder. Another question that goes along with “How long will it take?” is “What do we need to do in the months preceding our move?”

Home Buying Process

Buying a new home can be a long, drawn-out process that can last a year or more, but it doesn’t have to. Many people complete the transaction in just a few months. Nationally, the wait time has increased over the past few years. Whether you desire to drag it out or complete it quickly, there are ways you can influence the time frame, although many factors are out of your control.

Across the country today (May 2007), the experts are saying that it is a buyer’s market, which tends to slow the process (although many builders have completed, vacant new homes waiting for new owners to move in).

If you are moving due to a new job or have a job relocation, you probably will have a specific date that you would like be settled in your new home. If you are moving within the same general area, you are probably more flexible.

If you already own a home, it gets trickier. Ideally, you would prefer to sell your home and buy a new home at about the same time, so that you can move out of your old home and into your new home on the same weekend, without having to find temporary lodging because you have to move out before your new home is ready; or worse, moving into a new home before you sell, which means carrying two mortgages.

With the current housing market in a decline, it’s harder to sell, so in order to minimize costs and stress, you should start looking for a new home while you are preparing your existing home for sale, sell your existing home around the time you are ready to buy, then buy right after you sell, and press everyone involved to meet your move-out and move-in dates. (I told you it was tricky.)

Home Buying Timeline

You may find the house you want within the first few days or weeks of searching, or you may look for several months. Any timeline we could offer would need to be adjusted to meet your individual situation, but the steps in the home buying process should generally proceed in the following order no matter how quickly or slowly the process takes for you. As we stated earlier, you need to be educated, organized, wary and flexible. Our sample timeline that follows assumes a six-month lead-up to moving, with the new home purchase contract made 3-6 months prior to moving.

When you find your new home

(These steps can occur before or during some of the other steps that follow.)

• Make an offer: Usually, making an offer requires that you make a nominal deposit, which gives financial status to your verbal intentions. This assures you that no one else (usually) can “steal” the home you desire, but it also provides the seller with some certainty about your intentions. Usually, you will enter into negotiations with the seller, which can result in a series of counteroffers, before both parties settle on a sales price.
• Home inspection: Find and hire a certified home inspector to give your potential new home the once-over. A home inspection can reveal problems not disclosed by the seller, which can help you determine whether you really want to buy the home.
• Appraisal: All lenders require an appraisal of the value of the real estate you are buying so that they can justify the loan amount. An appraisal will also help you, the buyer, be assured that you are getting your money’s worth.
• Title: You, either through your lender, mortgage brker or real estate agent, are responsible for conducting a title search to assure that the property you desire is free of liens, encumbrances and other legal issues before you go to the closing table.
• Insurance: You will need to purchase homeowners insurance prior to the closing date (although it won’t become effective until the sale is final. Proof of insurance will be required by the closing agent.
• Home warranty: Consider a home warranty, which for a fee will cover your home and its appliances and fixtures against failure for a specified period of time after you move into your new home.
• Prepare for closing: Make sure your finances are in order in the weeks and days leading up to your closing. The amounts for your down payment, mortgage, monthly payments of principal, interest, taxes and insurance should not be a mystery on closing day. Your goal is to have no surprises at closing. Contact your bank or similar entity in advance to make sure you will have adequate funds when you go to closing. You may need to move money around, or if you are selling an existing home or other assets or borrowing money from an institution or a relative, make sure you leave enough time for checks to clear. Get a cashier’s check to cover the closing costs. The title company should be able to estimate your closing costs down to the penny a few days before the closing.

Six months before moving

• Location, location, location: It is a real estate cliche, but it is true. Narrow your search with research, whether it means looking online or driving through neighborhoods. What city or cities do you prefer? What neighborhoods within specific cities. What houses do you like in a preferred neighborhood? You can do this on your own or with a real estate agent, who may know of homes for sale that don’t have for sale signs. Do you want a single-family home, condominium or townhouse? If you haven’t found your dream home yet, don’t sweat it.
• Assess your finances: Know your financial situation. Obtain a credit report. (Federal law dictates that you have access to a free annual credit report.)
• Start looking for real estate agents: Interview real estate agents in the area where you want to live.

Four months before moving

• Choose a mortgage broker: Finding a mortgage broker early on in your home search can help ease your mind about how much you can afford in a new home now and in the future. You will need to provide the mortgage company with personal financial information, such as verification of income, savings and investments. The mortgage company can also help you determine your price range by calculating your estimated costs to buy your new home and live there in the future.
• Get preapproved for a home loan: Talk to mortgage brokers so that you can get prequalified for a mortgage, which will help you determine how expensive of a new home that you can afford by developing a household budget. Complete a mortgage application. You’ll have a better idea of what you can afford, where you can look seriously and you’ll have less anxiety about the home buying process once you know where you fall with respect to mortgage possibilities.
• Learn about the fees associated with obtaining a mortgage: It’s your money and it can disappear quickly. Your lender should provide you with a federally-mandated HUD statement provided by the U.S. Department of Housing and Urban Development that details the fees and costs involved.
• Determine whether you want or need a real estate attorney: Some real estate agencies have local attorneys on staff that can review all of the legalities regarding your new home purchase. Consider the hiring of a real estate attorney as an insurance policy against unforseen problems that could arise prior to closing on the purchase of your new home.
• Narrow your choices: Continue to search for your ideal new home. Once you have zeroed in on a new home you really like, consider making an offer — either now or soon.

Two months before moving

• Select a mover: Ask friends, neighbors, relatives or others who may know about movers. Talk to several movers about their services, fees, insurance and related topics. Contact your homeowners insurance agent about what they cover. Now is the time to make special arrangements for moving expensive, unusually large or delicate items.
• Corporate relocation: If you are moving for your job or if your employer is in any way paying for the cost of your move, make sure you know what exactly is covered by them, what will have to be covered by you and what their expectations are about your involvement in the process. Get it all in writing.
• Notification list: Begin making a list of everyone who will be affected by your move and start notifying them of your move and the dates they will need to stop, start or change services, including utilities (such as electric, gas, phone and Internet providers), home services such as lawn or pool maintenance or cleaning services, professional services such as doctors, dentists or veterinarians, the post office, creditors and other businesses who send you mail. Don’t forget to include friends, relatives and your kids’ school(s) and friends.

One month before moving

• Arrange for transfers of services: By now, you should have a specific date for your impending move, so you can contact utilities and arrange for shutting off services at your old home and turning them on at your new home.
• Start packing and purging: While you don’t want to box up everything just yet, you can definitely start. If it’s summer, the winter clothes can all be packed, or vice versa. Clean out the garage, the basement and the junk room. Have a garage or yard sale to dispatch items you don’t want to take with you. A well-planned sale could lighten the load in the moving van and help pay part of the moving expenses.

A week or two before moving

• Arrange for an orderly financial situation: You may be moving out of town and need to close existing bank accounts and open new ones. Decide how you will arrange for the transfer of items from one safety deposit box to another (banks can help with this matter). Have a cashier’s check drawn to cover closing costs and another to pay the movers. Have some cash handy for unexpected expenses.
• Pack: You can start packing now, if you haven’t started yet.

Moving day

• Meet the movers: Be on site if possible to offer instructions and assistance to the movers. Some coffee and doughnuts can go a long way in making sure that things are handled with kid gloves. Make sure that you or someone you trust sees the movers off, that they took everything they were supposed to and that the old home is locked up after they leave. If you are selling your home, your sales agent should remain in possession of a key until the new owners move in.
• Walk through: Conduct a final walk-through of your new home (usually accompanied by the seller’s agent) on the day before or day of closing. Make sure that all items are as they should be, that nothing was left or taken out that should have been and that the overall condition of the home is acceptable.
• Financials: Make sure that you have all the necessary payments ready and available, including checks for the closing and the movers.

Now settle in, get out and explore your new neighborhood and enjoy living in your new home!

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