How long does it take to buy a house?

If you have decided to buy a house, it is crucial to understand that the process is long drawn, unlike buying any household product. Homebuyers need to be patient throughout the process, ensuring they meet all the legal and financial requirements and get the best property deal. The journey of purchasing real estate in India begins online with the advent of real estate platforms. This has simplified the home buying process and reduced the time taken. From finalising the budget and location where one wants to reside or invest to negotiating the price and fulfilling the legal obligations, there are various stages or milestones, each requiring some time and effort from the buyer.

According to experts, buying a property may take a few weeks or several months to up to a year or more, depending on several factors such as property’s availability, market conditions, home loan interest rates and negotiations.

Timeline for buying a house

• Budget planning
• Comparing lenders and getting pre-approved loan
• Home search online or offline
• Property inspection and due diligence
• Financing and loan approval
• Negotiation and deal finalisation
• Registration and transfer of ownership

#1. Budget planning

Buying a house requires proper budget planning, just like any other investment. The first question you need to answer is: How much can you afford? Determine the affordability of your purchase by considering factors such as your income, finances required for down payment, outstanding debts, etc.

House purchase requires a financial commitment. Hence, experts suggest starting early while you are still young. This will give you ample time to save funds for down payment and meeting other expenses. By saving sufficient funds for a downpayment, you can take a lesser loan amount and get the best home loan.

Make sure to track your monthly expenses and set a plan to reduce unnecessary spending. Create a realistic budget by assessing your financial situation. This is the stage when one needs to work on improving their credit score. A higher credit score will help you secure a better loan with lower interest rates.  At this stage, make sure to consider other expenses such as property taxes, insurance, maintenance expenses, etc.

Time required: Consider two or three months for this process. This will help you get a clear picture of your monthly expenditure and how much you need to save for your dream home purchase.

#2. Comparing lenders and getting a pre-approved loan

Prospective homebuyers should check different home loan options to get the best loan. Make sure you compare the interest rates, terms and eligibility criteria. You may seek pre-approval to help assess your loan borrowing capacity. A pre-approved home loan is an offer for a loan based on the applicant’s repayment capacity. The home loan disbursal is based on the applicant identifying the property within the validity period of the pre-approved loan and adhering to other requirements.

Time required: The time involved in this process will depend on factors such as the lender and the time taken to gather documents. A pre-approved loan offer is typically valid for a limited period (say, three months).

The loan processing time may vary depending on the lender. The loan application may be processed in one to two weeks.

#3. Home search online or offline

For home seekers, property search starts online these days. With the availability of online portals and the ease of viewing properties through pictures and video tours, home search has become simplified and faster. One can browse through hundreds of listings from the comfort of one’s home. The home search process is a crucial stage where a potential buyer tries to gather a lot of information and compare different properties.

At this stage, it is important to consider several points, such as:

• Location: A home buyer must decide the location where they want to buy a property, depending on their personal needs. Make sure the neighbourhood has access to public transport, social amenities are available, and business hubs are connected.
• Price: A buyer looks for properties that match their budget preference. Hence, a buyer must research the price trends in the locality.
• Property size and features: When selecting a house, a prospective buyer should consider their space needs in mind. In addition, one may check for the features and amenities available in the property based on their preferences.
• Resale value: It is a good idea to assess the resale potential of the property. That is, how much returns can one get in the future when they sell the property?

On the other hand, if one opts for the offline or traditional method of home search, the options available are:

• Approaching friends and family who have recently purchased a house
• Getting information about the credibility of a real estate developer through word of mouth
• Checking various advertisements in print and electronic media
• Reading reviews of projects on blogs and forums

One can hire a property broker in both online and offline home search methods. Real estate agents can help identify the right property. One must pay brokerage charges, usually around 2% of the transaction value.

Time required: Typically, if you have set a date for your planned move to a city or a location, your home search journey should start months in advance. Some experts suggest starting the home search journey a year and a half earlier. However, identifying the right property once your search begins may take a few days to weeks.

#6. Property inspection and due diligence

Once a buyer has selected a property and the seller has accepted the offer, the next step involves conducting a property inspection and due diligence. Inspecting the property helps identify potential issues or defects and verify the property’s title and legal history. One can approach professional services for real estate due diligence and inspection.

Time required: This stage may take several weeks or some months, depending on factors such as the type of property and the extent of the due diligence required.

#7. Financing and home loan application

At this stage, potential homebuyers consider obtaining home loans. This involves submitting a loan application to the lender and providing supporting documents such as proof of income.

 Time required: The stage may require a few weeks or up to some months, depending on the lender’s requirements and the complexity of the buyer’s financial situation.

#8. Negotiation and deal finalisation

Once you have selected your dream house, the next crucial stage is negotiating the price with the seller and finalising the deal. How fast a property sells in the market will depend on various factors. These include:

• Property buying seasons: Specific periods such as the festive months and tax seasons see maximum real estate activities. Buyers can benefit during the festive time as several developers come up with unique offers and discounts.
• Market conditions: Factors such as the inflation rate can influence the purchase decisions of property buyers. Economic factors also influence the real estate market. For example, an upcoming metro or expressway project can push demand for properties.
• Supply and demand: The supply and demand dynamics in the market can impact the time it takes for a homeowner or a developer to sell a property.
• Interest rates: Low interest rates by financial institutions can increase the demand for properties. This is the best time to buy a house. Typically, potential buyers often wait for the interest rates to come down before going ahead with their purchase.

Finally, negotiating a deal requires prior preparation. As a potential buyer, you should be equipped with information on the price trends in the market for a successful negotiation. If you make a price offer to a seller, they may counter it and you may be given a counteroffer. Keep sufficient time for the negotiation stage.

#9. Documentation process

Furthermore, this stage also involves certain legal procedures such as property due diligence and document preparation. Once the due diligence and financing part is completed, the next step is preparing the purchase contract and closing documents.

Time required: Consider these points before making a purchase decision. Typically, this stage can take a few weeks to several months.

#10. Registration and transfer of ownership

The final stage in the homebuying journey involves registering property documents and transferring ownership. One must approach the relevant government authority to transfer property ownership from the seller to the buyer. Several states provide an online facility for property registration. The time taken to complete the process will depend on the processing times of the relevant government authority and the availability of the parties (buyer and seller).

Time required: The entire process may take a few weeks to complete or even longer in certain cases.

Housing.com News Viewpoint

The time required from the stage of budget planning to house hunting and the final stages of negotiation and registration can vary widely depending on where you have bought the property (location), the type of property, the mode of home search, legal procedures and the efficiency of the parties involves. The entire journey may take several months or even longer in some instances. You may consider hiring a real estate agent for your home search and a legal professional to guide you through the legal procedures, which can simply the process and reduce the time involved.

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