How long does it take to buy a home (condo), starting at zero.

In My Humble Opinion
1

A friend and I are both looking to move soon, are thinking of renting an apartment, and have started looking for places. Up until now, I was just thinking of renting, but seeing a condo I kind of liked, got me started thinking about maybe buying. I’ve never owned a home in my life, and have only rented. I don’t want to say I’m seriously considering buying a place instead, but its something I’d like to find out more about.

In the condo scenario, I’d buy the place and charge my buddy rent to live with me. We’d have a “gentleman’s agreement” that he’d stay for a year or so, just like it was a lease. I wouldn’t even think of buying a place I couldn’t afford by myself without a roomate if I had to, but I may consider getting a place that would be cutting it close if I were to go solo.

The thing is, we’re shooting for a move in date of September 1, or maybe even earlier. As for today, I am at absolute ground zero as far as finding a place, besides looking at online listings a bit. Is it at all feasable to complete the home buying process all the way to being moved in less than a month? Or, would I be wasting my time even thinking about buying?

2

You can do it, but you need to get your financing lined up now.

3

In our case, we found a place we liked in October 2003 and moved in in March 2005.

Things may go faster if the place you want to move into has already been built.

4

Home purchases often have small snags requiring communications and negotiation over problems with the property (ex: carpet is very worn, would you consider taking $2,000 less since we will have to replace it immediately).

My initial home purchase was fairly smooth but took about 50 days to close from start to finish. It would have been longer but I decided to take a cash rebate in lieu of waiting for the seller to take bids on cleaning services.

5

Where do you live? If you’re in a market that got strongly inflated over the past few years, buying right now may be a very bad idea. You’re likely to do a lot better renting for another year or two and saving the difference for an eventual down payment.

If you’re in a market where prices are aligned with reality, make sure you know the true monthly cost of the house once you include insurance, maintenance, property tax and (if you put less than 20% down) PMI so you don’t end up buying more than you can afford. I have friends who bought houses that ended up costing them more than they expected because they didn’t factor all that stuff in.

6

No way. Buying a house is a very serious deal. If you are thinking about trying to buy a house before signing a lease in September, you are deceiving yourself. I’m a huge believer in trying to put 20% down and getting a fixed rate mortgage. The housing market crash in the “Inland Empire” was absolutely predictable and I have little sympathy for those losing their houses due to no interest negative amortization zero down loans. Such loans are a huge gamble, and when you lose, well you’ve lost the biggest bet you’ve made in your life.

Get pre-qualified for a loan and then take your time shopping. As Giraffe said, keep in mind all the additional costs involved. My theory is that you should plan on living in the place for at least 5 or 6 years just to break even. I think that if it is at all possible, you should buy a place that you don’t mind living in for a very long time.

7

In my experience, you can close on a property in about 10 days if you’re paying with cash, and rarely less than a month if you need financing (especially if you don’t already have that lined up).

But! And this may depend on how hot the market is where you are, you might very well be able to rent whatever place you want to purchase on a day-to-day basis until the closing if you can’t close for a few weeks after the day you need to move. We did that for a couple that bought one of our houses, and it worked out fine.

8

My experience was really fast. In fact, I was surprised at how fast it went. I was friends with my realtor’s girlfriend and she’d said to me “you watch - [realtor] will have you in that house in two weeks.” I thought she was kidding but it was true.

However, I had all my finances in line when i went in to it. I knew I wanted a home and in what price range. I had the downpayment, I had the mortgage approval (neither of which took very long in my situation) and I went to my realtor friend and said “ok get me this house for this price.” And she did.

I just looked at the paperwork and I signed the original agreement(s) for the property on 9/29/05. I got the keys on 10/31/05. There was an official inspection and bargaining and everything in the month between.

It can be done if you know exactly what you want, have the money to get it, are able to quickly get approved for a loan and have a kickass realtor.

9

The September 1 thing is the hard part, unless you were paying cash which doesn’t seem to be your case. For example, I just refinanced and it took about two weeks from start to finish. Could have been done faster if need be, but not by much. So to echo others, if you were serious, you would need to start working on the mortgage now.

On the plus side, around here the condo market has tanked so much (well prices have dropped from obscene to merely rediculous) that several developers are turning unsold units in newly opened properties into apartments, so there are some relative bargins to be had.

10

Once an offer is accepted there is generally around 2 to 4 weeks before you move in. The long part is finding a place to buy. You really need to spend some time looking around for what to buy.

11

I am a real estate attorney, so I deal with purchases all the time:

Once the seller and buyer agree on contract terms, the process could be completed in about 10 days (as Renee said), assuming you are paying cash and assuming the seller has relatively clean title to the property (i.e. the seller is the only owner, and you don’t have to track down some long lost relative with a partial interest in the unit, and the seller’s mortgage is not in foreclosure).

If you are getting a loan, then your lender is really the one who determines the pace of the sale. They will need to collect financial information from you and information on the property, and submit it to their underwriting department before they can provide a clear to close and authorize the loan. Assuming you have good credit, can easily verify your income, and the condo is relatively well established (and not embroiled in any lawsuits), this shouldn’t be too much of a problem, although it will still take about 30 days.

If, however, you have shaky credit, have an unstable income stream (perhaps you are paid for seasonal work, or on commission), or there are condo issues, the process may get dragged out longer.

All of this occurs after you’ve signed a contract, which is a process that shouldn’t be rushed. Real estate is a big investment, and it behooves you to take your time to make sure you end up in the right neighborhood, with the right place. A realtor (despite my disdain for them) can help you with this; real estate commissions are paid for by the seller, out of their proceeds, so you won’t have to pay the realtor (except, perhaps, a couple hundred dollars in a transaction fee, payable at closing). Of course, since the realtor is increasing the seller’s expenses, the seller may raise their price.

My advice would be to get a short term lease while you research your prospects. Then, you won’t feel rushed, you will be confident you are making a shrewd investment, you’ll have the ability to negotiate terms with the seller, and you’ll be able to handle the inevitable delays that occur before a closing without nearly as much stress. Plus, you’ll be able to live with your friend for a time and really find it if this is someone you can share a home with (lots of friends make for horrible roommates).