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First-time homebuyers, picture this… You have signed on the dotted line and the moment you have been waiting for has finally arrived. Your realtor hands over the keys to your new home, and it is all yours! There is nothing quite as exciting as buying your first home. However, today's housing market is competitive, and it takes longer to complete purchases, appraisals, and home inspections. Preparing yourself is half the battle, so we have mapped out a timeline for each phase of the home buying process.
Phase One: Preparing to become a first-time homebuyer
Do your research: This is the dreamy phase for many first-time homebuyers. You're scouring real estate websites, imagining life in your new home, and watching plenty of HGTV for inspiration. While browsing, consider what is genuinely essential in your new home. For example, do you have, or plan to have, children? Check out the local school district, the neighborhood's walkability, and any nearby parks or family activities.
Secure pre-approved financing: One of the most important things to accomplish during phase one is to procure pre-approval for a mortgage. Pre-approval will inform your decisions by showing you just how much home you can afford. It is best to work with a financial institution that puts you first and understands the needs of first-time homebuyers. Taking the time to obtain your financing upfront will pay off when it’s time to make an offer.
Find a realtor: You might be tempted to skip this step, but as a first-time buyer, you need the expertise of a professional. A first-rate real estate agent understands the market and will advocate on your behalf. However, make sure that your realtor represents only you and not the seller. You want and need excellent representation throughout this process.
Keep in mind: The housing market is hot right now. It’s a seller's market. As a result, finding the right home will likely take more time.
How long should you expect to spend in this first phase? If you’re moving quickly, you may be ready in a couple of months. If you’re just browsing, need to improve your credit or save for a down payment, you may take a year or more.
Phase Two: Taking action
House Hunt: This is the fun part. You are finally looking for your dream house. In a competitive market with low inventory, this process can take time so you will need to have patience. Keep a list of likes and dislikes for each home you tour. The more homes you see the more they will start to blend together. Having notes on each home will allow you to stay organized. Remember, it’s likely no home will be absolutely perfect so keep in mind the research you did earlier in the process to determine what is essential for you in a new home.
Make an offer: At this point, you have decided on a home, and you are ready to move forward. Now it's time to make an offer. Your real estate agent will help you draft the proposal. This proposal usually includes your suggested purchase price and down payment, any contingencies or concessions you would like from the seller, and your preferred closing date. The seller will then accept, reject or negotiate your offer. This process could take a few days or a little longer if negotiations are protracted.
Get an appraisal: Once the seller has accepted your offer, it's time for a home appraisal, which is essential in this process. Your mortgage lender will hire a third party to determine the home's value, and your job is simple: wait and see what the appraiser reports. The purchase process continues if the home's value is equal to or higher than the sales price. If the appraiser finds that the home's value is lower, it's time to negotiate. This step can take a week or two.
Conduct an inspection: While an appraisal estimates the home's value, a home inspection is a deep dive into the building's physical condition. This step isn't required, but it is highly recommended. Hiring a home inspector helps safeguard you against costly surprise repairs in the future. The inspector will look at the house's plumbing, foundation, ceilings, floors, etc. You'll receive a detailed report which allows you, as a first-time homebuyer, to negotiate or walk away from the sale if need be.
Close on your home: During this final stage, which on average takes 30-45 days, you will have some expenses to deal with like closing costs, which include attorney fees, pest inspection fees, appraisal fees, title insurance expenses, and discount points. Bring your ID, closing disclosure, and cashier’s check or proof of a wire transfer for your down payment and closing costs to your closing meeting. A neutral third party called a closing agent will lead the process. You’re officially a homeowner as soon as you sign all of your paperwork!
Keep in mind: This phase can take two to four months. However, the length of time you will spend in this active phase of home buying depends on your housing market, the seller's motivation to close quickly, and the time of year. Steps like finding the right home, inspections and appraisals take longer than they once did. Therefore, the more flexible you can be, the better.
Phase Three: Moving in
Schedule the movers: At this juncture in the first-time homebuyer process, the wait is over, and you have completed most of the heavy mental lifting. Now it’s time to plan your move and make your new house a true home. Packing and moving could take hours, days or weeks, depending on the size of your current living space and the distance to your new home. For example, a small apartment may take a few hours to pack, while a three-bedroom house could take up to seven hours. To simplify the process, hire a professional moving company.
Turn the lights on: First-time homebuyers might be surprised to learn that activating your utilities can take time. First, determine your electrical, gas, water, and internet providers; do this two to three weeks before you plan to move. You may need to transfer the utilities to this new address or set up brand new accounts. Before moving day, make sure that any address transfers are complete and that the lights, water, and gas are on in your new home. While you're at it, remember to update your address with the post office.
Prepare for moving day: It's nearly time to kick back and relax in your new home. But first, protect your property by changing the locks so that you know who has the keys to your new home. Hire a professional to ensure that it's done correctly. Typically a locksmith will need 10-20 minutes per lock, so add up your exterior doors to estimate how long they'll be there.
Keep in mind: Your home buying process is nearly complete, but still, plan accordingly. Contact moving companies, utilities and locksmiths as quickly as possible to ensure they are available on your timeline. In a hot real estate market, you won’t be the only person using these services.
Expect to spend three weeks or more on the move-in process, depending on the size and distance of your move.
Finally: Home sweet home
As you can see, it takes time and preparation to purchase a home. However, becoming a first-time homebuyer can be deeply gratifying with the right people on your team. Get pre-approved at your local financial institution to start on the right foot. A trusted financial expert can help every step of the way. A DVD Credit Union home loan expert will help tailor a suitable home mortgage plan for your specific circumstances. Contact us today to see why almost 35,000 members trust us with their banking and lending needs.
First-time homebuyers, picture this… You have signed on the dotted line and the moment you have been waiting for has finally arrived. Your realtor hands over the keys to your new home, and it is all yours! There is nothing quite as exciting as buying your first home. However, today's housing market is competitive, and it takes longer to complete purchases, appraisals, and home inspections. Preparing yourself is half the battle, so we have mapped out a timeline for each phase of the home buying process.
Download our first-time homebuyers' timeline infographic here.
Phase One: Preparing to become a first-time homebuyer
Do your research: This is the dreamy phase for many first-time homebuyers. You're scouring real estate websites, imagining life in your new home, and watching plenty of HGTV for inspiration. While browsing, consider what is genuinely essential in your new home. For example, do you have, or plan to have, children? Check out the local school district, the neighborhood's walkability, and any nearby parks or family activities.
Secure pre-approved financing: One of the most important things to accomplish during phase one is to procure pre-approval for a mortgage. Pre-approval will inform your decisions by showing you just how much home you can afford. It is best to work with a financial institution that puts you first and understands the needs of first-time homebuyers. Taking the time to obtain your financing upfront will pay off when it’s time to make an offer.
Find a realtor: You might be tempted to skip this step, but as a first-time buyer, you need the expertise of a professional. A first-rate real estate agent understands the market and will advocate on your behalf. However, make sure that your realtor represents only you and not the seller. You want and need excellent representation throughout this process.
Keep in mind: The housing market is hot right now. It’s a seller's market. As a result, finding the right home will likely take more time.
How long should you expect to spend in this first phase? If you’re moving quickly, you may be ready in a couple of months. If you’re just browsing, need to improve your credit or save for a down payment, you may take a year or more.
Phase Two: Taking action
House Hunt: This is the fun part. You are finally looking for your dream house. In a competitive market with low inventory, this process can take time so you will need to have patience. Keep a list of likes and dislikes for each home you tour. The more homes you see the more they will start to blend together. Having notes on each home will allow you to stay organized. Remember, it’s likely no home will be absolutely perfect so keep in mind the research you did earlier in the process to determine what is essential for you in a new home.
Make an offer: At this point, you have decided on a home, and you are ready to move forward. Now it's time to make an offer. Your real estate agent will help you draft the proposal. This proposal usually includes your suggested purchase price and down payment, any contingencies or concessions you would like from the seller, and your preferred closing date. The seller will then accept, reject or negotiate your offer. This process could take a few days or a little longer if negotiations are protracted.
Get an appraisal: Once the seller has accepted your offer, it's time for a home appraisal, which is essential in this process. Your mortgage lender will hire a third party to determine the home's value, and your job is simple: wait and see what the appraiser reports. The purchase process continues if the home's value is equal to or higher than the sales price. If the appraiser finds that the home's value is lower, it's time to negotiate. This step can take a week or two.
Conduct an inspection: While an appraisal estimates the home's value, a home inspection is a deep dive into the building's physical condition. This step isn't required, but it is highly recommended. Hiring a home inspector helps safeguard you against costly surprise repairs in the future. The inspector will look at the house's plumbing, foundation, ceilings, floors, etc. You'll receive a detailed report which allows you, as a first-time homebuyer, to negotiate or walk away from the sale if need be.
Close on your home: During this final stage, which on average takes 30-45 days, you will have some expenses to deal with like closing costs, which include attorney fees, pest inspection fees, appraisal fees, title insurance expenses, and discount points. Bring your ID, closing disclosure, and cashier’s check or proof of a wire transfer for your down payment and closing costs to your closing meeting. A neutral third party called a closing agent will lead the process. You’re officially a homeowner as soon as you sign all of your paperwork!
Keep in mind: This phase can take two to four months. However, the length of time you will spend in this active phase of home buying depends on your housing market, the seller's motivation to close quickly, and the time of year. Steps like finding the right home, inspections and appraisals take longer than they once did. Therefore, the more flexible you can be, the better.
Phase Three: Moving in
Schedule the movers: At this juncture in the first-time homebuyer process, the wait is over, and you have completed most of the heavy mental lifting. Now it’s time to plan your move and make your new house a true home. Packing and moving could take hours, days or weeks, depending on the size of your current living space and the distance to your new home. For example, a small apartment may take a few hours to pack, while a three-bedroom house could take up to seven hours. To simplify the process, hire a professional moving company.
Turn the lights on: First-time homebuyers might be surprised to learn that activating your utilities can take time. First, determine your electrical, gas, water, and internet providers; do this two to three weeks before you plan to move. You may need to transfer the utilities to this new address or set up brand new accounts. Before moving day, make sure that any address transfers are complete and that the lights, water, and gas are on in your new home. While you're at it, remember to update your address with the post office.
Prepare for moving day: It's nearly time to kick back and relax in your new home. But first, protect your property by changing the locks so that you know who has the keys to your new home. Hire a professional to ensure that it's done correctly. Typically a locksmith will need 10-20 minutes per lock, so add up your exterior doors to estimate how long they'll be there.
Keep in mind: Your home buying process is nearly complete, but still, plan accordingly. Contact moving companies, utilities and locksmiths as quickly as possible to ensure they are available on your timeline. In a hot real estate market, you won’t be the only person using these services.
Expect to spend three weeks or more on the move-in process, depending on the size and distance of your move.
Finally: Home sweet home
As you can see, it takes time and preparation to purchase a home. However, becoming a first-time homebuyer can be deeply gratifying with the right people on your team. Get pre-approved at your local financial institution to start on the right foot. A trusted financial expert can help every step of the way. A DVD Credit Union home loan expert will help tailor a suitable home mortgage plan for your specific circumstances. Contact us today to see why almost 35,000 members trust us with their banking and lending needs.