How long does the home buying process take?

Buying a property can be an exciting experience and there’s nothing like the moment when the keys are handed over and your new home is finally yours, but the process can take some time. Just how long does it usually take to buy a house?

Buying a property timeline

Generally speaking, the process of buying a home can be broken down into a number of key steps:

• researching and inspecting properties
• obtaining pre-approval for a home loan
• making an offer and negotiating with the vendor, and finally,
• property settlement.

Each of these can take time, and below we’ll go through how long you might expect each stage to take.

How long does the research phase usually take?

There is no set time for how long it might take to conduct your research into properties. It could take you a short time to find the right home, or you could spend months searching property websites and apps and speaking to real estate agents to find one that appeals.

There are a number of key things you may want to keep in mind. It can be helpful to make lists to aid you in your property search, taking into account:

• things that are essential to you in a property: factors such as location, layout, access to amenities and public transport, and
• things you would like but that you could be happy to compromise on: this could include things such as a swimming pool or outdoor entertaining area.

Many popular property websites and apps allow you to refine your search by price and suburb, making the search for properties a relatively straightforward process.

Time inspecting properties

Generally speaking, when a property goes on the market for sale, the seller or their real estate agent will conduct open houses and inspections, to show it off to potential buyers. These can happen any day of the week, although Saturday tends to be a popular day.

A house will typically be open for half an hour to forty-five minutes, during which time buyers can walk through to get a sense of the property. Some sellers and real estate agents will also be willing to offer inspections outside of regular hours, and private inspections.

Learn more about how to inspect a property.

What factors can make the house hunt longer?

There is no set time for how long it will take you to find a house, as this will depend on your preferences, budget and tastes. You may decide to make an offer on the first house you inspect, or you could spend months or longer looking for your dream property.

If you are a particularly motivated buyer and you want to get a sense of how much demand there is in the housing market in your area, then checking the weekly auction clearance rate may be one way to get some insights.

The auction clearance rate is a number that indicates the percentage of properties that have sold at auction in a particular week or month. It is calculated by dividing the total number of properties sold at auction in a particular timeframe by the total number listed.

Property website CoreLogic lists weekly auction clearance rates for markets around Australia, and if you are curious about how hot the market is and how fast properties are selling in your state or city, this may be an indication.

A high clearance rate might indicate high demand in your local property market, meaning it might take you longer to secure the home of your dreams. Conversely, a low clearance rate could mean buyers are holding off, and demand is lower.

There are other factors that could influence how long it might take you to secure a property – for instance, the amount of stock on the market, and affordability in your area. The clearance rate, however, can still be helpful as an indicator of how hot or cool demand currently is.

Here are useful tips for buying in a low stock housing market.

How long does the offer process take when buying a property?

The offer and acceptance process when buying a property can take anywhere from a matter of hours to several weeks, depending on the seller and their priorities.

If a property that you have your eye on is listed as for sale, then you will generally be able to make an offer as soon as you feel comfortable. In some cases, if a seller is particularly motivated, a real estate agent may even set a deadline for offers – the Monday after inspection, for example.

A seller may even accept your offer on the day that you make it, if they are satisfied with the amount and have a particular desire to sell.

On the other hand, if a seller is not in a rush, then they might take some time to consider your offer and others that have come in, and they may even wish to enter into negotiations about the sale price of the property, which could make the process take several days or weeks.

How long does the auction process take?

If a property you have your eye on is listed for auction, you may wish to wait until auction day, then attend and place your bid. If you bid successfully, then typically you will sign the contract and pay your deposit on the day.

Some sellers, however, may be open to receiving pre-auction offers, and selling their property privately prior to auction day. If you have your eye on a particular property, you may ask the seller or real estate agent if they might be willing to consider one of these.

How long does pre-approval take on a home loan?

Your application for home loan pre-approval, also known as conditional approval or pre-approved finance, can take anywhere from a few days to a few weeks to be processed. Some online lenders advertise super fast approval or pre-approval, which they say can be granted in a matter of minutes.

Pre-approved finance is an arrangement between a borrower and lender, wherein the lender gives their conditional approval to lend money up to a set amount. It is not guaranteed approval, but it is a good way to get a head start on the home-buying process.

While pre-approval is not required, it can be useful to have your finance pre-approved, so you will know the limit of what you can spend, and can therefore make an offer on a home with a greater degree of confidence.

A search of Canstar’s database shows that many home loan lenders currently offer pre-approval as an option, although it would be wise to speak with your lender of choice to clarify its specific requirements and conditions.

Once granted, pre-approved finance is typically valid for about two to three months.

Does pre-approval make it faster to buy a house?

One advantage of getting pre-approval for a home loan is that it can speed up the process of buying a house. This is because your lender will already have a picture of your finances and the maximum amount of money they’ll be willing to loan you before you make a formal home loan application.

When you make an offer on a house without pre-approved finance, you will generally want to include a condition in the contract stipulating that your offer is subject to approval from a bank or lender. This finance condition is commonly around 14 to 21 days, although this can vary in different states and territories.

With pre-approved finance, your lender will already have approved your finances in principle, and in many cases, will simply need to make an assessment of the property and obtain a valuation, to ensure they are happy to loan you the funds to purchase it.

This means that you can stipulate a shorter finance condition in your contract, speeding up the property-buying process. If the seller is particularly motivated, a shorter finance condition may even give you the edge over buyers who require longer for finance.

Bear in mind that properties bought at auction are generally not subject to finance, meaning you could be locked into buying the property even if your chosen lender doesn’t approve your loan application. This is one reason why obtaining pre-approval can be an especially important step if you’re considering buying at auction.

What happens when pre-approval lapses?

Pre-approval for a home loan in Australia typically lasts for up to three months, and after this period, it will lapse. If you have not found a house to purchase in this time period you may decide to reapply for pre-approval, but there are things to be wary of before doing so.

Each time you make an application for a credit or loan product, a note goes onto your credit report, and too many applications can lower your credit score, potentially making you less attractive to lenders further down the line.

For this reason, if you are thinking of obtaining pre-approval for a home loan, you may wish to hold off until you feel you are very serious about purchasing within the next three months (or however long your lender’s pre-approval will last for), to avoid the impact of multiple applications on your credit score.

How long does property settlement take?

Once you have purchased a home, the length of time for a property settlement varies, but it typically takes between 30 and 90 days depending on where you live, ending on what’s known as settlement day.

Settlement is the process through which ownership transfers from the seller of a property to the buyer, and throughout this period beforehand, various important administrative tasks including title and town planning searches must be completed.

As settlement is complex, many buyers will choose to engage the services of a conveyancer or solicitor, who will carry out necessary title searches, undergo due diligence checks such as building and pest inspections, and ensure all legal requirements have been met.

Before settlement day, the buyer of a property will typically have the opportunity to conduct a final inspection, to make sure it is in the expected condition.

Come settlement day, a number of things will happen. Your bank or lender will:

• Transfer the balance of the purchase price to the seller.
• Register a mortgage in your name, noting the amount of money you now owe for the purchase.

In addition, your solicitor or conveyancer will:

• Liaise with your lender to make sure all necessary funds have been transferred.
• Register the new mortgage with your state or territory’s relevant land title authority.
• Ensure all clauses in the contract of sale have been fulfilled.

What if settlement is delayed?

A number of things can occur to delay the settlement of a property sale. According to conveyancing specialists bytherules.com.au, the top three things that can lead to a delay in settlement are bank complications, late documentation and issues arising at the final pre-settlement inspection.

Depending on which state or territory you are in and the terms of the contract, you may potentially be able to charge the seller penalty interest, terminate the contract of sale after a period of time, or even sue for damages.

If you are faced with a settlement delay as a purchaser, it is important to consult with your solicitor or conveyancing specialist, as they will likely be able to advise you on the most appropriate course of action and what is allowable in your state or territory.

About Alasdair Duncan – Senior Finance Journalist at Canstar

Alasdair has more than 15 years of experience as a journalist, and he specialises in home loans and lifestyle topics for Canstar. He has a Bachelor of Laws (Honours) from the University of Queensland and has lectured at QUT. His work has appeared in outlets including Pedestrian.TV, the ABC and Junkee.