Timeless Advice: If You’re Even Thinking About Buying a House, Start the Process NOW…

If you watch any HGTV, you might think that buying a house doesn’t take all that long. You go see three houses over the course of a few days, then head off to a local restaurant for some apps and a cocktail to mull over your choices. By the time the real estate agent walks in to join you, you’ve come to a decision on which one to buy. Then, presto, you’re in the house of your dreams right after a short commercial break.

While nobody truly thinks it only takes a half hour to buy a house, most buyers probably couldn’t guess at how long the entire process actually takes when it isn’t being edited for TV. So, if you aren’t sure how long the process takes, don’t feel bad — it’s like trying to answer the age-old question of how long it takes to get to the center of a Tootsie Pop… it depends on a lot of factors.

But if you’re even thinking about buying a house, you might want to start the process now, because it might take longer than you think it does.

How Long Does It Take To Close on a House?

According to this Rocket Mortgage article, it typically takes 30-45 days to close on a house. Yet, in the very next sentence, they also state that the average time it takes is 50 days. That’s actually a great example of how difficult the timeframe is to pin down and accurately answer.

But most agents would probably agree that sounds about right. Thirty days is on the quick side, but possible. Forty-five is a safer bet, but a few days beyond wouldn’t be surprising. A closing that takes 60 days wouldn’t even be that out of the ordinary for an agent to see.

A cash deal where you don’t need to go through the mortgage process can close more quickly, perhaps in as little as a few days or a week. But even then there are other factors to consider that could impact how long it takes to close on a house. Besides, the majority of buyers need to obtain a mortgage.

So, does that mean you should plan on starting the process a couple of months ahead of when you want to move in? No. That’s just the amount of time it could take for the closing process. You should probably add at least another couple of months onto the entire process of buying a house!

9 Things That Could Add to How Long It Takes

It’s almost pointless to even try and put an estimated number of days each part of the process takes because it varies from one area of the country to another, and each buyer’s circumstance is different. But what you can bank on is that there might be some things that hold up the process.

So let’s take a look at things that could potentially affect how long it takes for you to buy a house, to help you decide when to start your home search:

  • Finding a house you like. Obviously personal taste comes into play here, and it’s hard to put a timeframe on how long it takes for a buyer to figure out what they like. For some it might only take a day of looking at a handful of houses, and for others it could take months of seeing dozens of homes.Also, if there aren’t many homes on the market, it could take weeks and months for one to come on the market you like. Or perhaps there are lots of homes on the market, and it could take weeks or months until you’ve seen enough to make a decision. This is the one aspect that is more in your control than other factors. If you’re a quick decision maker, budget less time. If you think it’ll take you a longer time, factor it in.
  • Losing out on some houses before you finally get one. Ideally you’ll successfully negotiate acceptable terms with a seller on the first house you want to make an offer on. But sometimes buyers let great houses pass them by because they take too long before putting in an offer. Sometimes they make offers that are too low and sellers won’t accept until they realize they need to make stronger offers. Or if there’s a lot of competition, you might be outbid by other buyers on a house or two before succeeding.
  • An owner might need a longer closing date. If the owner of the house of your dreams needs time to find a place to live, or move out, it might be well worth the extra days or weeks they need to get the house you want… especially if it gets you a better deal, or for the owner to accept your offer over another buyer’s offer.
  • Home inspection issues. The inspection itself could take some time to schedule if local inspectors are slammed with appointments. But usually you can get one scheduled pretty quickly, and even get the report back in a relatively short amount of time. But if there are issues found during the inspection, it could add time due to going back and forth with the owner negotiating over what needs to be fixed. And if repairs need to be made before closing, that can take time depending upon the availability of contractors.
  • Mortgage underwriting. Even if you get every piece of documentation into your mortgage lender in a timely fashion, once it’s in the underwriter’s hands, they often take more time than they should to review the documents. And once they do, they might come back asking for more documentation.
  • Appraisal. Ideally the appraisal is ordered quickly to give the appraiser time to put it on their schedule and do all of the work it takes to finalize their opinion and report. But even if it’s done quickly, there’s always a chance the appraisal comes back lower than expected, and you’ll need to give the appraiser supporting evidence so he or she can reconsider their opinion and adjust their report, or try to negotiate with the seller to reduce the price.
  • Title work. As long as you choose a title company that is reputable and known for getting their end of things done in a timely manner, they shouldn’t add to the time it takes to close. But if you choose one that isn’t so great, obviously that could affect things. But either way, if an issue is found when they do the title search, it might add some time to the process as the legal issues are resolved so you can make sure you’re buying a house with a clean title.
  • Scheduling the closing. There are many people involved in a closing besides you and the seller. Coordinating a day and time isn’t always easy, and can impact the closing date.
  • There was an issue at the final walk-through. Right before you go to closing, you should go to the house to make sure that it’s in good condition, and everything is there that should be there, and nothing the owner should have taken was left behind. If you find something that’s damaged or wrong, you may need to delay the closing until the seller addresses the problem.

Hopefully your purchase won’t involve any of the above possible delays and added days to the process, but even if everything is smooth sailing, you’ll still probably want to start the buying process at least three months before you want to be in your new home. But the earlier you start the process, the better off you’ll be.

The best way to gauge how early you should start the process is to reach out to your preferred real estate agent, and let him or her know what you’re looking for. Once an agent knows what you’re looking for, they can give you a better sense of how much time it’ll take given the current market conditions, available houses for sale, and your personal circumstances.

The Takeaway:

It takes about 50 days on average to close on a home, but that doesn’t take into consideration how long it may take you to find the house you want to buy. There’s also a chance that you could experience delays in one (or more) parts of the buying process that are beyond your control. So you’re better off giving yourself more time than you think you need to buy a house.

If you’re thinking about buying a house in the near future, reach out to a local real estate agent and let him or her know when you’d like to move into a new home, what you’re looking for, and any information about your situation that may be relevant to them. Then they can give you a better sense of how much time it’ll take given the current market conditions, available houses for sale, and your personal circumstances.

6 Bad Reasons Sellers Use for Not Reducing the Price on Their Overpriced House

It might seem like a contradiction, but the best way to sell your house for the highest price possible is to list it for a little less than it’s actually worth. But a lot of sellers have a tough time taking that advice, and decide to list their house for much more than it’s worth.

While their well-priced competition sells quickly — and often for over asking price — stubborn sellers cling to their price and linger on the market for weeks, or even months. No matter how many times their agent suggests reducing the price, they always seem to have a reason why they shouldn’t.

To help you avoid making a mistake that can cost you tons of time and money, let’s take a look at 6 common (but bad) reasons sellers give their real estate agent for not wanting to reduce the price of their house:

1) My neighbor said it’s priced well and should sell quickly…

 

You can substitute the word neighbor with friend, family member, barber, co-worker, or any other type of person you know, but it won’t change the fact that just because someone you know said your house is priced well, it doesn’t mean it’s true.

People are often just being polite and supportive when they make an off-handed comment that your house should sell quickly. It isn’t meant to be taken literally and used as your rationale for sticking to your guns on price.

2) Everyone else is just giving their house away…

 

It’s easy to feel like every other seller out there is under-cutting your price just to get their house sold quickly. But there’s no way everyone else on the market is just so desperate, or easily convinced by their agent to “give” their house away. They’re just priced well based upon the sales prices of other recently sold houses, as opposed to trying to get way more than any other similar house has sold for.

3) Prices are only going to go up…

 

Historically home values do always go up over time. But that typically takes longer than most peoples’ houses are on the market. So, unless you’re planning on holding onto your house for a few more years, this isn’t a good argument for not reducing your price.

(And this applies even in a hot market where houses are selling quickly and over asking price. If yours isn’t selling in a market where prices are going bonkers, your price is bonkers.)

4) We’re going to need that wiggle room during negotiations…

 

Building in room to negotiate is a self-fulfilling prophecy. Ironically, the more wiggle room you build into your price, the more you’ll eventually have to wiggle on price! If you price your house too high, it’s going to sit on the market longer. The longer your house is on the market, the more buyers will feel free to come in with lower offers… which is still better than all of the buyers who won’t even bother to write up an offer if they feel your price is way too high.

5) When the right buyer comes along, they’ll see the value…

 

If you find yourself saying that you’re waiting for the elusive “right buyer” to eventually come along, the chances are you’ve already let several other “right buyers” slip through your fingers who chose to buy another house that was priced more appropriately.

Buyers are armed with market data and won’t be fooled by a price that’s more fantasy than reality, no matter how much they love your house.

6) The buyers’ agents obviously aren’t selling the house well, or are missing important features…

 

Agents show their buyers many houses, and (for the most part) each buyer they work with only ends up buying one of them. So they’re showing a lot more houses that their clients don’t buy, than they do buy. So, rest assured that they’d love for your house to be the one their buyers want. It’s not like they’re walking around trying to find things to bash about your house, or are failing to point out custom built-in cabinets that you think make or break the sale.

But what they’re sure to point out — no matter how much they like your house, or how perfect it is for their client — is when your price is way too high for what it is.

3 “What If’s” That Could Stop You From Buying a Home

Buying a home is a serious investment, which is why many would-be buyers get caught up in all the “what ifs” of things that could go wrong, and ultimately let those fears stop them from buying their dream home.

But the truth is, most “what ifs” have a logical explanation and don’t have to derail your dreams of homeownership.

So, what are some of the concerns keeping people from buying in today’s market? A recent article from realtor.com addressed some of the most common “what if” questions buyers have when going through the home buying process, including:

  • What if I buy now and home prices drop? Many people feel that home prices in today’s market are high. As such, one of the biggest fears many potential buyers have is that they’ll buy a home, only for prices to drop shortly after. But while there are fluctuations in the market, over the long term prices tend to go up, so as long as you don’t sell your home during a period of time when the price is below what you paid for it, you won’t lose on your investment.
  • What if I buy now and mortgage rates fall? In addition to high home prices, mortgage rates are also currently high, which has many buyers fearful that they’ll get locked into a high mortgage rate, only for rates to fall after their home purchase. But the good news is if mortgage rates were to come down at some point in the future, lowering your rate by refinancing could be an option.
  • What if I buy a home, but then lose my job or suffer a financial setback? Another fear buyers have is that they’ll buy a home, but then run into a situation where they can no longer afford their property, due to a job loss or medical issue. Ideally, you’ll have savings to carry you through any financial hard times, but even if you don’t, you can talk to your lender. If you’re honest and communicative with your lender about your financial hardship, they’ll likely be willing to work with you, because lenders typically would typically prefer to work with you, than go through the foreclosure process.

Everything You Need to Know About Selling to a Real Estate Investor

When you sell your property, you may sell it to an individual or a family who are looking to move in and make it their home. But not all buyers are looking for their forever home; some are just looking for their next investment, so it’s important to understand the process and implications of selling to a real estate investor.

recent article from realtor.com answered some common questions homeowners have about selling to a real estate investor, including:

  • How does selling to an investor impact a market? By definition, when you sell to an investor, they’re not planning on using your home as a primary residence. That means they either have plans to flip the home and sell at a profit, or use it as a rental, which can lower available inventory in the market — both of which can drive up prices and make it harder for individual buyers (particularly first-time buyers) to find and buy homes.
  • How do you know if an offer is from an investor? You won’t always know if an offer is coming from an investor. That being said, there are certain signs you can look for that sometimes point to an investor’s involvement, including a buyer approaching you with an offer before you list your home; getting an all-cash offer that’s significantly below your asking price; or getting an offer with an LLC instead of a person’s name.
  • Are there any ways to avoid selling to an investor? Avoiding any type of buyer can potentially lead to a lawsuit. If a buyer is qualified to buy your home, be careful not to decline an offer based upon who they are. That said, if you truly want to ensure your home is not sold to an investor, speak to a lawyer for help establishing a deed restriction, which will limit what your buyer can do with the property.

The Places in Your Home You’re Most Likely to Find Rodents—and How to Keep Them Out

Rodents can squeeze through extremely small spaces — as small as ¼ inch wide — so if your property has any vulnerable areas (like a small crack), rodents can squeeze their way into your home.

recent article from realtor.com outlined some of the places in and on your property where rodents may try to make themselves at home and, more importantly, how to prevent them from doing so, including:

  • Garage. If your garage door isn’t properly sealed, it can be easy for rodents to squeeze inside and set up shop in a corner or storage box. To keep rodents out, test your door seal. During the daylight hours, turn off all the lights and look at the garage door; if any sunlight peeks through, it’s time to reseal.
  • Kitchen pantry. Your pantry is full of food, which is why it tends to attract rodents. To keep rodents out, make sure to seal up any cracks, holes, or entryways into your pantry. Consider keeping food in tightly-sealed containers, which can deter rodents. For example, instead of keeping cereal in a cardboard box—which rodents can easily chew through—consider putting it in a sealed plastic container.
  • Attic. Rodents are also attracted to attics, which are full of nesting materials like insulation. Make sure to find and close any entry points to your attic; not only can rodents wreak havoc on your insulation, but they can also chew through electrical wiring, which could present a fire hazard.

Three Cool Yard Maintenance Tools to Make Summer Yard Maintenance Easier

If you want to take care of your yard this summer, you need the right tools. But what, exactly, are those tools?

recent article from realtor.com outlined the key maintenance tools you’ll want to have on hand to keep your yard in tip-top shape this summer, including:

  • Pruning shears. Pruning shears are essentially yard scissors; they allow you to trim your plants and keep them healthy. If you want to meticulously maintain your yard, they’re an absolute must.
  • Dibber. If you’re planning on doing any planting this summer, a dibber — which creates holes in the ground, allowing you to more easily plant seeds or bulbs — is a tool you’ll definitely want to add to your collection.
  • Self-watering planter. In a perfect world, you’d be able to be home to water all your plants at the appropriate time of day. But if you’re busy, you may not be able to get outside and give your plants the water they need, which could lead to your plants dying. The good news is, you can avoid this issue by using self-watering planters, which will give your plants the water they need to thrive, even when you’re too busy to water them.

Use These Tips to Attract Songbirds to Your Backyard This Summer

Summer is the perfect time for relaxing in the backyard. And what’s more relaxing than listening to songbirds?

Taking steps to attract songbirds can be a great way to create a more diverse landscape in your backyard and also up the relaxation factor, thanks to their songs. But how, exactly, do you get songbirds to flock to your property?

recent article from realtor.com outlined different ways to draw songbirds to your backyard this summer, including:

  • Add layers to your landscape. Creating a landscape with plants of different heights creates a variety of opportunities for birds to nest and forage. If you want your backyard to attract songbirds, consider incorporating a mix of low, medium, and tall plants.
  • Make sure your garden is bird friendly. Certain plants are more likely to attract birds than others, including flowers with lots of seeds. If you want to add a bird-friendly flower to your garden, try sunflowers, which are known to attract a variety of birds, including chickadees, sparrows, and finches.
  • Add bird feeders. Birds naturally flock to where they can find food, so adding bird feeders to your yard is a surefire way to attract songbirds this summer. Consider placing feeders in different places (and at different heights) to attract a wider variety of birds.

The Pros and Cons of Planting Large Trees on Your Property

Trees and other large plantings can add a lovely ambiance to your yard. But when it comes time to sell, are those trees going to be more of a help, or a hindrance?

It depends. There are both advantages and disadvantages to planting large trees on your property, and before you start planting, you need to understand both, and how they might impact your home sale.

recent article from realtor.com outlined the pros and cons of large trees and plantings for home sellers, including:

  • Pro: Insulation. If you live in an area with extreme summers or winders, well-placed trees can act as insulation, helping to regulate the temperature of your home, and lowering AC and/or heating bills in the process.
  • Con: Maintenance. Taking care of trees isn’t cheap; according to the article, in the US, the average cost for tree trimming is between $200 and $760.
  • Pro: Health benefits. Trees aren’t just nice to look at; looking at them may actually provide some benefits to your health and well-being. In fact, according to the article, viewing greenery from your window could have calming physiological effects, including lowering heart rate and respiration.
  • Con: Allergies. Trees may be beneficial to your health, but if you have allergies — for example, being allergic to pollen or tree sap — buying a home surrounded by trees could actually have a negative impact on your health.

Why Home Buyers Should Still Care about Having a Higher Credit Score, Despite Fees Dropping for Buyers with Lower Credit Scores

Whether you’ve been planning on buying a house in the near future or not, you’ve probably heard that people with higher credit scores are now paying higher fees, and people with lower credit scores are paying lower fees when getting a mortgage.

Hearing that might make you feel one of two ways if you’re planning on buying a house:

  • Yippee! I’m finally getting a fair chance. It’s not fair that people who don’t need lower rates and fees always get the better end of the stick, and now I have a chance at buying a home.
  • Not fair! I’ve worked hard to improve and maintain a great credit score, and now I’m being penalized for it?! What was the point of caring? Does it even pay off to be careful with my finances?

Regardless of which group you’re in, those are both valid feelings and perspectives to have.

It’s an uphill battle when you have a low credit score because you’re just starting out, you’ve fallen on tough times, or just struggled financially. Everything seems to cost you more when you could use a break more than anyone.

Credit card payments are hard to keep up with because your interest rate is so high, you find yourself just paying the minimum amount per month. Your car loan probably has a higher interest rate. And if you want to buy a house, you’re probably going to pay a higher rate than people with a better credit score on the biggest and longest term loan you’ll take on in your life. So yeah, this probably sounds like great news to you.

On the other hand, it’s aggravating to hear that you’re now going to be charged more after being conscientious, careful, and working hard to maintain a high credit score. You might have even done some deliberate things to improve your credit, like take a course, hire a finance coach, or simply read some books on how to do it.

Most likely you haven’t missed any payments on your credit cards, car loans, rent, or mortgages. You’ve proven you’re responsible and less of a risk to a lender because you do what needs to be done to pay your bills in a timely manner. So nobody’s going to fault you for feeling like you’re not being rewarded for your efforts, but rather penalized for it.

Either way, it’s easy to start feeling like there’s no reason to worry about improving and maintaining your credit score.

There’s a lot of debate about this new fee structure, but regardless of whether you’re in favor of the rule or not, there’s not much you can do to change it. So before you decide to just let your credit score slide, or not make efforts to improve or maintain it, consider these four reasons why you should still try to have the highest credit score possible:

  • Lower credit scores still affect your fees and interest rates pretty much everywhere else. Lower fees for lower credit scores only apply to mortgage loans being sold to Fannie Mae or Freddie Mac. A lot of them are, but there are also mortgages out there that aren’t being guaranteed by the federal government. Plus, a lower credit score will still negatively affect the rates and fees you pay for any car loans, credit cards, etc.
  • It’s a slippery slope. While not everyone who has a lower credit score has done something blatantly or intentionally wrong with finances in their life, it’s often due to negligence, or simply not trying to improve your credit score by doing the right things. On the other hand, most people with a good credit score have been deliberate about getting there and staying there. If you don’t think and feel like you need to be disciplined to be able to afford and have what you want in life, you could easily find yourself in foreclosure down the road by not worrying about the ramifications of letting things slide.
  • Even though fees are going up for higher credit rating borrowers, and down for lower credit borrowers, the overall cost is still lower for higher credit borrowers. People with higher credit scores aren’t actually paying more than buyers with lower credit scores. The gap between how much in fees buyers with higher and lower credit scores has gotten smaller.
  • There’s no guarantee this will be a policy that will be in place forever. Like almost everything affected by the government, this could easily change in the future. Tax codes, banking regulations, and many other things change from year to year, so don’t bank on lower credit scores being rewarded in the long term. They typically haven’t been in the past, and higher credit scores have historically been rewarded with more favorable fees, rates, and terms.

The Takeaway:

A new fee structure went into effect on May 1, 2023 that reduced the mortgage fees for home buyers with lower credit scores, while increasing them for buyers with higher credit scores.

Regardless of whether or not you have a high credit score, or a low one, it might make you feel like you don’t need to care about improving or maintaining as high of a credit score as possible.

But you should care because having a lower credit score will still cost you more when you get a mortgage than it does for those with a higher credit score, and on other types of loans and credit you might obtain. Besides, this only applies to mortgages being bought and guaranteed by the Federal Housing Finance Agency, and there’s no guarantee that this fee structure will be in place forever.

Should You Wait for Mortgage Rates to Go Back Down to 5.5% Before Buying a House?

If you’re thinking about buying a house, you might feel that mortgage rates are high and that it might make sense to wait until rates come down before buying.

According to this CNBC article, you’re not alone if you feel that way. A recent survey done by John Burns Research and Consulting found that 71% of prospective buyers aren’t willing to take on a 30-year mortgage unless it’s 5.5% or lower. This explains why there aren’t as many active buyers in the market as there were in the past few years, since rates are currently in the mid 6% range.

Interestingly, the consulting firm reported that their survey also revealed only 55% of prospective buyers feel like it’s not a good time to buy a home, and 22% feel it is a good time to buy. Simply put, there are a lot of prospective buyers who won’t buy a house right now, even though they actually feel like it’s a good time to do so.

To be fair, the potential buyers who feel that way have gotten used to mortgage rates that were considerably lower than they currently are for quite a few years. But they’re choosing 5.5% on emotion, rather than data. According to data from Freddie Mac, the average rate over the past 50 years was in the 7.75% range.

The first time 30-year mortgage rates had a number 5 as a first digit on a regular basis was in 2003. But even from then through late 2008, rates were as likely to be in the mid to high 6% range as they were in the mid 5% range. Mortgage rates only came down below 5.5% on a regular basis due to two major events: the 2008 financial crisis and the COVID-19 pandemic.

That was a fairly long span of years where people got used to the rates being lower, so it’s understandable why many potential homebuyers feel like a 5.5% rate is “historically normal” — even though it actually isn’t — but it was being done in order to stabilize the economy during extremely trying times. If you think about it, the good news is that we’re no longer dealing with such difficult times, and things are going back to normal. Well, at least in some ways…

The real estate market is still trying to figure out what “back to normal” is.

Why You Should Buy Before the Market Figures Out What “Normal” Is

By nature, the real estate market is rarely perfect for everyone. Sometimes it’s more balanced than others, but it’s usually more in favor of buyers versus sellers, or vice versa. Over the past few years it was most certainly a sellers’ market. Many people who listed their house in the past few years received multiple offers, and were able to sell their homes for over asking price in a matter of days. Great for them, but very difficult for buyers.

Buyers had to brace themselves for bad news every time they submitted an offer on a house. Even if they offered way above asking price and waived all contingencies, there was a good chance they wouldn’t be the winning bid. Plenty of buyers lost out on dozens of houses before they finally landed a house, and many others just gave up trying.

Back then, buyers couldn’t wait for the competition to die down…

Well, it has!

While higher interest rates aren’t something any buyer wants, they’re also exactly what many buyers need in order to have a fair shot at finding and buying a house they want. Lower rates don’t do you any good if you can’t actually buy a house. And if rates do come back down to where the majority of buyers polled say they want them to be, the competition will probably kick right back up. (Especially when you consider how many of the prospective buyers recently polled felt that now is a good time to buy, but want rates to hit 5.5% in order to do so.)

So, at least for right now, there’s a window of time where you have less competition to buy a house, and may not have to offer over asking or waive contingencies meant to protect you, like so many people had to do in the past few years.

And, who’s to say rates won’t only not go back down to 5.5%, but rather go up instead? Considering the rates have truly been closer to 7.75% historically — and for much longer periods of time — there’s as much chance of that happening as there is for rates to decrease. But if you buy now and rates do end up going back down, you can always refinance if they go down enough to make it worthwhile.

The Takeaway:

Many potential homebuyers feel like mortgage rates are too high and are waiting for them to come back down to what they feel is the “historically normal rate” of 5.5% before they buy a house. However, the historical average for mortgage rates is actually 7.75% over the last 50 years. So the current rates in the mid 6% range are still below the historical average.

Interestingly, even though 71% of buyers polled said they’d wait for rates to come down, only 55% said it was a bad time to buy, and 22% said they thought it was a good time to buy a house.

This makes now a good time to buy a home, because there are less buyers competing for homes than there has been for years, and if the rates do come back down, the competition will increase.