How long does it take to buy a house?

This is such a great question. Here is the honest answer; it depends.

This market is intense. It's taking longer for buyers to win in multiple offer situations because they are competing with all cash buyers even into the half-a-million dollar price ranges. So when in the past, it took 10-12 months from when you first started looking at houses to finding "the one" and getting to the closing table, right now it could be in the upwards of 18-24 months for those who will finance a portion of the home purchase. Cash buyers are in that 10-12 month range right now, which is actually longer even for them than usual as well. Everyone is struggling right now, these are very unprecedented times.

Why is it taking so long?

Here's the thing, there is not a lot of incentive for people to move right now so the inventory is extremely low. Let's hash this out a little by putting ourselves in their shoes. If you were not making a mortgage payment, would you sell your house and then buy another one knowing that in less than 60 days you'll have a mortgage payment you cannot get out of? I doubt it. If you already like your house, have equity in it and qualify for a refinance that saves you hundreds each month why go through the hassles of competing with other buyers when you can just stay put and renovate with the money they're saving each month. Money is cheap right now with interest rates at historic lows and lots of people are taking advantage of that, I know I did. Here is just one more potentially overlooked reason why sellers are staying put; The amount of foot traffic their house will see during the few days of showings and one weekend of open houses, increases a person's chances of contracting the covid-19 virus by quite a bit. This is a real factor, and until the pandemic is under control, the fear will keep people in their homes.

Because incentive is relatively low when you balance potential profit with competition for a new house, less homes are going up for sale. With money at historic low costs, more buyers are qualified based on the monthly payment amounts which is great but the demand for houses has increased while the inventory has decreased drastically.

When you win the bidding war!

Once you have secured a home and have it under contract, the typical process takes 30-45 days for financing. You have to go through underwriting, appraisals, meet conditional approval requirements, get the survey, etc. There is a lot more red tape in a financed deal than there is with an all cash purchase. Which as you can imagine, is why sellers are choosing cash buyers. If you are paying cash it's really about how fast the sellers can pack, how fast you can secure a home owners insurance policy and how quickly title can insure the home can be transferred free and clear to the new owners. I've seen closings as fast as 10 days.

Have more questions?

Drop me a line on the contact page of my site and I'll get your questions answered ASAP. If you leave your cell and the best times to call we can set up a quick chat and get your questions answered even faster and then hopefully get you moving forward to ward your next step!

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