In today’s hot seller’s market, it may be difficult to find and buy a home as quickly as you would like. As of February 2021, the average mortgage loan took 53 days to complete from start to finish. If you add in time for property search and making offers, buyers are averaging about four months to find and buy a home. While all factors are not within your control, there are several things you can do to speed the process along and avoid major delays.
In a competitive housing market, no seller will take you seriously unless you are already pre-approved for funding. You can get a pre-approval letter from a lender in a few hours depending on the lender. They will just need to take a look at your credit as well as a few other pieces of financial data. That letter will not only give you the green light with sellers but will also give you a good idea of how much house you can afford.
Bidding wars are a common occurrence in a seller’s market. You may see yourself outbid on several properties before an offer is accepted. That’s why its important in this situation to choose an experienced, knowledgeable real estate agent who knows how to negotiate hard for you. This type of market is not the best time to take a chance on your neighbor’s son who just got his agent license or your aunt who only works part-time as an agent. Do your research and ask for referrals to find an agent who knows how to win bidding wars and close deals.
Once you have an offer accepted on a house, your mortgage company will need a slew of paperwork and documentation from you. You can speed up the underwriting process by having all of this ready to go. While the exact requirements vary from lender to lender, in general you will need the following: the most recent two pay stubs from work, the last two years of tax returns and W-2 forms, the previous two months of bank statements, statements from retirement or other investment accounts, and statements from additional income sources like alimony, child support, or Social Security. If you’ve had any large deposits or withdrawals from your bank accounts recently, you may need to provide a written explanation for those.
One of the biggest delays to the home buying process is often issues that turn up in the home inspections. These cannot be anticipated but you can strategize ways to keep the process flowing even if problems arise. If the reports turn up repairs to be completed, you could negotiate for a lower price or money back at closing to have them done later instead of waiting for the seller to complete the repairs.
While you may not be able to speed up every part of the home buying process, you can help it go faster and smoother by being prepared as much as possible by following the steps listed above.