Timeline for Buying a Home: 12 Steps From Browsing to Moving
Buying a home is a multi-step process that can be as intricate as it is time-consuming. A lot goes on from the moment you begin browsing listings to when you finally move in and make your first mortgage payment. Figuring out what to expect and how long things usually take can be daunting for a first-time homebuyer.
But that’s why we’re here!
In the Bay Area, the average time of the home buying process is estimated to be two to three months. However, this can vary greatly depending on the specific market, the type of transaction, and if there are any bottlenecks (e.g., extra required time to satisfy contingencies, closing day scheduling issues, etc.).
While the timelines for buying a home will vary, each transaction's step-by-step process is largely the same. In this post, we’ll walk you through these steps so you’ll know what to expect and when.
Step 1: Sign Up on Aalto
Time: 5 minutes
Aalto is a self-service real estate platform that makes finding your dream home an easy and enjoyable experience. We’re here to handle the legal work, documents, and negotiations on your behalf, all for a fraction of what a real estate agent charges and without the opaqueness of traditional real estate.
Skip the daunting process of finding a realtor and start your homeownership journey the modern way instead!
Step 2: Get a Mortgage Pre-Approval
Time: 2 days to 2 weeks
Before you start house hunting, you must know which homes are within your price range. Work with a mortgage lender to begin the pre-approval process — and remember, this differs from the pre-qualification process.
Your pre-approval letter will provide an exact estimate of how much you can borrow based on information like your debt-to-income (DTI) ratio, credit report and credit score, income, and more. This is a very important document to have before you start to tour homes or get serious about your search, so make sure to prioritize this in your timeline!
Step 3: Define the Right Home
Time: 1 to 2 days
Write down a list of everything you want in your new home, like the number of bedrooms and bathrooms, single-family or multi-family, whether you want a backyard or a front yard, amenities, etc. Don’t hesitate to include everything you could ever want — you’re looking for your dream home, after all!
Once you’ve completed the list, separate it into “needs” and “wants.” This will help you when you start looking at listings and going to open houses.
Step 4: Explore the Housing Market
Time: 1 week
Next up is your home search. Browse Aalto’s listings and get an Aalto Report on any home with insights on the price, neighborhood, and more. On Aalto you can interact directly with the homeowners to see when they can schedule a showing or just select a tour time from the home’s page to schedule. We recommend setting up multiple viewings so you can compare the homes you like. To save time, you can also drive by some of these homes before attending a showing to determine if you even want to pursue them.
Step 5: Visit Open Houses
Time: 1 week to 3 months
Steps 4 and 5 of the buying-a-home timeline can take a while, especially in competitive markets where listings sell quickly and for way more than their estimated home value. Some people get lucky and find their dream home on the first try. For others (the majority), it can take months or even years to find their perfect place.
If you’ve followed steps 1-4 closely, you’ll at least be better prepared for this step and realistic about your expectations.
Step 6: Make an Offer
Time: 1 day to 2 weeks
When you find a home you love, make an offer — and prepare for their counteroffer. Sometimes you’ll get lucky, and your first offer gets approved. However, if your offer is well below the suggested sale price or has a lot of contingencies, or there are multiple offers on the table, you might be rejected.
Show you’re serious about your offer by making an earnest money deposit. This deposit is usually 2-3% of the home’s value. It gets held in an escrow account until the deal goes through or the seller approves someone else’s offer. If your offer is rejected, you'll get your deposit back.
Step 7: Schedule a Home Inspection
Time: 3 days to 2 weeks
Once a seller accepts your purchase agreement, it’s time to schedule a home inspection. During an inspection, a professional home inspector conducts a thorough walkthrough of the house to check for current and potential problems. They check the heating and cooling systems, doors, walls, floors, windows, the basement and attic, and anything else they can access.
After, you’ll receive a home inspection report, which details the condition of the house. If you have any inspection contingencies in place, you may require the seller to make repairs before continuing with the transaction.
Step 8: Schedule a Home Appraisal
Time: 3 days to 2 weeks
A home appraisal tells you approximately how much a home is worth in the current housing market. Much like your home inspection, the appraisal involves a licensed professional conducting a walkthrough of the house (sometimes, this is a virtual walkthrough, but we recommend requesting a physical one). After, they perform a comparative analysis of the house and the sales prices of similar homes in the neighborhood. Then, they submit an appraisal report to your lender.
If the home is close in value to what’s listed in the purchase agreement, the transaction can continue without issue. However, if it comes in lower, it’s called an appraisal gap. You may need to negotiate with the seller to reach a modified agreement and sometimes an updated purchase price.
Step 9: Get Your Loan Approved
Time: 2 weeks to 1 month
Even though you already have a pre-approval, things could’ve changed since then (e.g., you got fired from your job, you made a major purchase, etc.). The next step in the timeline for buying a home is to gather all the required documents again so your lender can complete the underwriting process and schedule a closing date.
Once your home loan is approved, you’ll lock in an interest rate and know your monthly mortgage payments.
Step 10: The Closing Process
Time: 2 days to 1 week
It’s time to complete the transaction! Closing day itself has a lot of moving parts.
Here, the buyer signs numerous documents, typically including:
- The purchase agreement
- Closing disclosure
- Deed of trust
- Mortgage note
- Escrow statement
- Loan estimate
You’ll also pay closing costs and prepay for homeowners insurance and property taxes. If there are any seller concessions (where the seller agrees to pay for some of the costs), these also get taken care of on closing day.
You’ll make your down payment too, which for many will be the biggest check you’ll ever write. Cue the butterflies!
Before closing, we recommend that you do a final walk-through of the house you’re about to buy, just in case something’s changed since the home inspector was there.
Step 11: Moving Day
Time: 1 week to 2 months
More often than not, the day you close and the day you move in aren’t the same. In general, buyers are expected to give sellers at least a week to gather their things and move out if they haven’t already. If they haven’t secured a new place, this transition can be 30, 45, or even 60 days. It all depends on the terms you and the seller agree on, so adjust your timeline accordingly now that you’ve officially bought a house.
Step 12: Your First Payment
Time: 1 to 2 months
Your first mortgage payment is usually due on the first of the month after the first full month past the day you close. For example, if you close on June 10, your first mortgage payment is due on August 1.
Your first payment must also be made within 60 days of your closing date, so if you’re closing on the 1st, pay close attention to months with 31 days. Ask your lender if you’re unsure when your first payment is due.
Start the Timeline Today
Now that you know the 12 steps in the timeline of homebuying, sign up with Aalto and begin your journey! We’re here to help you every step of the way.
Aalto is a real estate broker licensed by the State of California, License #02062727 and abides by Equal Housing Opportunity laws. This article has been prepared solely for information purposes only. The information herein is based on information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy of the information. Aalto disclaims any and all liability relating to this article.