October 26, 2021


The home buying process timeline can be complicated but also very exciting, especially when you are purchasing your dream home. Homebuyers should plan out their strategy to avoid any issues, especially in a hot real estate market where homes are selling quickly and there is a possibility of finding yourself in the middle of a bidding war. 

Whether you are a first time home buyer or purchasing an investment property, it is important to keep in mind the timeline for buying a home, the average time the process takes and what is involved. 

In this article, we will discuss important factors to know before buying a house including: choosing the perfect real estate agent, house hunting, receiving a pre approval letter once you have the required funds, and finally, the closing day and the closing process. Read on to learn more.

Key Steps To Know About The Home Buying Process Timeline

Here is a detailed review of each stage of the home buying process:

Step One: Finding The Perfect Real Estate Agent

Before you begin searching for real estate, you need to find and hire a reliable and experienced real estate agent to work on your behalf. Make sure you like working with this person and their style fits what you're looking for in an agent. It is also important that you can establish a rapport with this individual as they will be your representative in the home buying process. In addition, it is crucial that you speak with your agent and understand any rules or guidelines he or she has about working with them. For example, some agents won't work for buyers looking to buy a short sale property but others will.

Step One: Finding The Perfect Real Estate Agent

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Some other things to consider when choosing an agent include:

  • Training and experience: Has the agent worked in your community for a while? Is he/she licensed and experienced with the type of property you're selling? Does he/she have training in areas like marketing or negotiation skills? Will they be able to offer services that fit into your budget? What certifications do they have? 
  • What they can offer: What services are offered? Can the real estate agent provide the best service for you given your needs and budget? Will they try to find you the best price possible or is their commission their main concern?
  • Knowledge and skill level: How much experience does the agent have buying similar homes to what you’re after in your neighborhood/marketplace? Do they know how much similar homes are selling for right now?
  • Friendliness and trustworthiness: Do you like and respect the real estate agent? Is this someone you can trust to handle your largest investment with care? Does he/she have a positive attitude and do they seem good at their job?

The questions above are very important when choosing a real estate agent. Also, ask yourself how helpful they have been and what their negotiating style is. Some people are uncomfortable negotiating. Others don't want an agent who will settle for less than what they deserve. How does the agent negotiate? You'll probably be going back and forth on price, terms, closing date – do you feel confident that the real estate agent is helping you get the best deal possible? Remember, agents work for YOU – not the other way around!

Step Two: Ensuring You Have The Funds

Find out what you can afford and set your budget!

The Importance Of Having A Budget

Once an individual has decided on the maximum amount that they would like to spend per month on their home, this number will need to be compared against the prices of available homes in order to assess affordability based upon current market conditions. Those who are purchasing a home with the plan of selling it again soon may want to consider that how much they pay for their new house is also partially dependent on how much equity they can gain when it is time to sell it.

The Importance Of Having A Budget

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There are plenty of websites where you can calculate how much you need to save each month in order to meet your goals. It's also a good idea to talk with family members about the possibility of adding their names on the title so they can help out with the monthly payments or down payment if ever needed. You'll want to consider all these factors before deciding on purchasing your dream home.

Down Payment

Homebuyers need to prepare themselves financially by creating a budget before making an offer to purchase a home. Keep in mind and understand what percentage of the home's purchase price you can afford to pay as a down payment and thoroughly research the current market conditions to see how much similar homes are selling for. Homeownership is within reach for most, as long as they budget and plan accordingly. Expect the down payment to be 20% of the home's purchase price before any negotiations take place. 

Homebuyers can also expect a mortgage loan commitment (approval) letter from a lender within 1-2 weeks after submitting an application package. Those who get pre-approved will have ready access to potential home listings that match their criteria and timeframe for buying a home. Plan on receiving this mortgage loan approval as soon as possible if you want to be considered for the best property listings that come up in hot markets. Start saving because it is a hot market out there!

Step Three: Having A High Credit Score

Don’t Lose Sight Of Your Credit Score

Another important aspect of buying a home (and one that is often neglected by many) is your credit score. This will affect your mortgage interest rate and monthly payments. Those with a lower credit score may pay a higher interest rate and therefore end up paying more over time for their mortgage loan. 

Buying a home often requires the prospective homeowner to secure a loan for part of the purchase amount. This can be done by using savings, obtaining loans from family members, or through Federal Housing Administration (FHA) mortgages. However, getting approved for an FHA loan is more difficult than borrowing money from an outside lender. Approval typically depends on having good credit and sufficient income.

Lenders check applicants' scores to determine their risk level in lending to them. If someone has poor credit, his or her chances of being approved are much lower than individuals with excellent credit ratings who have high incomes and low debt-to-income ratios. If the applicant has average credit, he or she would generally get approved if other factors such as income and employment history were adequate. 

Sellers also ask for credit scores, although they are not doing it because they care about what number is on there (some don't even know what that means). Rather, they want to make sure that you are financially able to pay for their house and close on time so they don't have any issues with getting their money. If your score is low, you may want to consider talking to a lender and seeing if they can raise your credit score before making an offer. 

Don’t Lose Sight Of Your Credit Score

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What Is A Credit Score?

A credit score is a number that describes how likely it is that someone will repay his or her debts and how much of a risk he or she poses to lenders. It is based on information about an individual's debt repayment history found in his or her credit reports. The most commonly used type is called FICO score, which was developed by Fair Issac Corporation (FICO) in the early 1980s. There are many different types of credit scores, but FICO scores are the most popular.

The three major credit bureaus—Equifax, Experian and TransUnion—generate credit reports for consumers based on information that creditors report to them about an individual's debt repayment history. Each bureau has its own set of databases which sometimes contain slightly different information because creditors may report discrepancies between the bureaus. If a discrepancy exists, it is up to the creditor to decide which agency's information he or she will use in reporting to each bureau. Therefore, one person could have three different credit scores if his or her accounts are reported to each of these bureaus; the score would be whichever was highest among all three.

Step Four: Putting Down An Offer

Home buyers should be sure that they thoroughly examine the home before making an offer by having a professional take a look at it and assess the condition of the structure and any areas where repairs or renovations might be necessary. These assessments can help buyers make better offers. Homeowners selling their houses cannot legally withhold information about problems with their house, or else they risk losing their selling power.

Additionally, before making an offer, determine whether or not there is an HOA (homeowners association) and if so, consider what monthly fees will be required in order to maintain access to the amenities provided by the HOA and whether or not they can meet these expenses. Never rely upon verbal promises from the seller about future costs and obligations, and instead seek written confirmation. Once you are sure about moving forward with the offer (and are already planning on which room you will be placing your new furniture in!), let your real estate agent know that you are ready! From there, the professionals handle everything.

Step Five: Sealing The Deal!

Congratulations! The seller accepts your offer. Now what?

Closing Date And Closing Process

The closing date is when you finalize all the paperwork and complete the deal on your dream home. Home buyers also need to pay out-of-pocket expenses such as recording fees, transfer taxes, title insurance premiums, notary fees or additional escrow amounts at this time. Always inquire about any additional taxes, liens or other fees associated with the property prior to closing since there are no more chances to back out once you've signed on the dotted line. Always read through all of their paperwork and fully understand what is being signed before going in for the real estate closing date.

Closing Costs

These are the fees that are required to be paid by the buyers of a home. They are usually paid at closing, or the point in time when the property becomes officially transferred from the seller to the buyer through an exchange of money.

Prepare for these costs by knowing how much they will be and what they cover. Closing costs typically include:

  • Items such as taxes and interest
  • Origination and application fees
  • Title and escrow fees
  • Appraisal fees
  • Inspection fees
  • Loan discount points
  • Prepaid interest, insurance, and property taxes

The good news is that certain closing services are now offered to homebuyers as a package deal. You can hire one company to handle all of your paperwork which will save you time and money compared to going to each lender separately for a quote. It also gives you peace of mind knowing that if anything does go wrong, someone will be able to help fix the problem quickly.

Step Six: Enjoy Your New House

We know getting here is not easy. But it’s definitely worth it! At this point, all you will need to focus on is the monthly mortgage payment and inviting your friends over for a housewarming party.

Step Six: Enjoy Your New House

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By following the above six steps, you’ll be able to successfully start calling yourself a homeowner sooner rather than later.

While the process to homeownership might look lengthy, you will find plenty of help along the way. We also recommend that you do your research and know your numbers before starting off on this journey. This will make the whole process that much easier on everyone involved - most of all yourself.

About the Author

As a native Washingtonian, Carlos Reyes’ journey in the real estate industry began more than 15 years ago when he started an online real estate company. Since then, he’s helped more than 700 individuals and families as a real estate broker achieve their real estate goals across Virginia, Maryland and Washington, DC.

Carlos now helps real estate agents grow their business by teaching business fundamentals, execution, and leadership.

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