 Personal Finance Powerpoint Presentation. How long does buying a home take? Get ready to get financially fit by practicing personal finance. Remember that finance decisions can basically be broken down into those short term decisions. Those long term decisions, the short term decisions being the ones that we're going to train our gut to trust our gut using tinkering, using trial and error. We're going to hone down our habits so that we can trust our habits making decisions into the future. The long term decisions are those often a bit more difficult for human beings given the fact that we're not as designed or as good at making those types of decisions that have implications multiple periods into the future. We have to rely more on the adage of we're going to measure once, we're going to measure twice and cut once as opposed to using tinkering or trial and error and therefore need a more formal process. You might think about these steps with a home buying process which clearly lies in the latter in a longer term type of decision, one that will have impacts multiple periods into the future therefore requiring generally a more formal decision making process. Number one, determine the home ownership need. Number two, find and evaluate a property to purchase. Number three, price the property. Number four, obtain financing. And number five, close the purchase transaction. How long does buying a home take? Most of this information is coming from Investopedia which you can find online and you can continue looking up your resources, your references, continuing your research from there. This is by Jennifer Nelson, updated April 20th, 2022. A home is most people's biggest purchase. When you're talking about individuals, the purchase of the home is going to be one of the largest investments that we invest in. A thoughtful, thorough and comprehensive approach will suit you well when it comes to buying the real estate where you're going to be spending a significant portion of your time. Clearly, once again, this being a more long term type of decision and therefore we want to spend more time on it given the fact that it will have that longer term impact. Once under contract, the typical timeline is about 40 to 50 days to close on a home. Let's not forget the steps leading up to that point, house hunting, pre-approval and application process. So there's kind of a lot involved. This is a longer term process than most other purchasing processes here that we have because once again, it's usually one of the biggest items that are going that we're going to be investing in. Whether it's your first home and upgrade from a starter home or something larger or downsizing after many years, you shouldn't rush the process. It's not something we want to just jump into. It's not something that should be an impulse buy typically. It's not something we can simply trust our gut because we haven't been able to train our gut given the fact that we can't use a trial and error method, but rather we want to have a more formal process in line. So find an agent seven days. Most of us know a friend, family member or colleague who recently bought a home. Ask those trusted sources and in about a week, you should be able to contact a reputable agent. So most of us find the agents or trust the agent possibly with word of mouth with someone else who liked the experience that they had with the agent. That's usually some more of your more or your better kind of resources than other resources. If you don't have that capacity, then you can look at references of course online to try to pick out that agent. You're looking for someone you like and trust and who has a knowledgeable grasp on the available inventory in your desired community. So clearly when you're picking the agent, you're going to be spending time with this agent and you're buying kind of an intimate thing. So you want to be able to talk to this agent as well as feel that the agent has the needed knowledge about the housing, not only the process itself of purchasing, but in that particular area, the knowledge of the places in that particular area. So a good agent should help you avoid a bad purchase and see you through the twists and turns of selling of sealing the deal. I get pre-approved. That's going to be eight to 10 days. We're saying here, loan pre-approval is required and we'll let you know if you qualify for a mortgage. So if you get the pre-approval process, then that'll obviously be a crucial step if you're going to be getting financing and needing financing, which most people that are purchasing homes will. So you'll require documents, including tax returns, paystubs, debt and credit information. So remember when you're dealing with the financial institution from the financial institution's perspective, they're trying to see and make sure that you can pay the loan. So they're going to want to know how much you make and get some standard information on that. And the tax returns are often going to give them a general idea because that's going to be an income tax. So it'll give you some idea of the income information. And if you're buying with a spouse or partner, both of you will need these things. So you can also apply with several lenders and check for the best rates. Of course, you might shop around for the renters, for the lenders and see the best rates that you can get. The more standard, the kind of loan that you're looking for. If you're looking for like the standard loan, which is generally the 30 year fixed type of loan, 20% down. It's usually, you know, a bit easier if you're looking for more exotic type of loans, trying to switch things up. Then of course it's going to increase the level of complexity and the need for more comparison shopping. So during the pre-approval process, there's a 14 day window in which credit bureaus count credit inquiries as only one since you're buying a home. House hunting less than one day. Many people consider browsing real estate sites a guilty pleasure and love to look at real estate trends in various areas around the country. So it's kind of nice. It's kind of fun to look at these real estate sites, which is a fairly new thing that we're able to get so much information about these sites and see what's going on around the country with regards to real estate, which is also a fairly good indication or gives you some signs about the health of the economy and so on, which is interesting stuff to look at. So including what homes are selling for and how much home you can get for your dollar. But when you're seriously in the market to buy, house hunting isn't always the most fun. So when you're actually get down to the nitty to the gritty, instead of just kind of browsing around, it might not be as fun just to look around because you got to get serious about the process. You may be stressed, pressured to compromise or need to make the purchase in time to relocate your family or get the kids settled before school starts. Clearly when you're purchasing the home, you have timing constraints involved and whatnot. You want to get things settled so that you can move forward with other things. So a study reported by the Insight Media found that it takes just 0.81 days to browse homes before finding one to buy, which is interesting. You think that would be a little, I would think that would be a little low, but that's an interesting stat here. And most people view about 16 homes online before finding one that they want, the average time looking before scheduling a visit right around four days. So they usually, I would think that most people when they're actually looking for the home, they might have a fairly narrow place where they probably got home down to saying, okay, I would like to be in this area, possibly they got information in terms of they got to be there for the school location and whatnot and that kind of stuff. So maybe that would make fairly good sense if that were the case because then there's going to be limited options based on a fairly limited location. So checking out those options might not take all that much time if you've got that much of a narrow focus already down. So the six steps and days to complete them, according to the study, 14% of people said they had to compromise on some aspects of their ideal home, about 14%. And in today's seller's market, where homes in many areas of the country receive multiple offers over the asking price or have a bidding war, a quarter or more of home buyers may experiencing an unsuccessful offer prolonging their home search. So it really depends on the market going forward. And obviously there's endless speculation on the market. There always is endless speculation, but we're in an interesting time these days. Currently at the time of the presentation here, you know, we're in basically at the end of the COVID, hopefully kind of thing. Hopefully that whole lockdown thing has an interesting impact on the markets. The laws that have been taken into consideration and now we possibly could have a situation with inflation taking place or not. The current thought process is it's more likely that inflation might not be, you know, transitory and whatnot. And that could of course have implications on the market as well. So obviously those conditions will differ. The markets will also differ from more local markets as well as the national kind of trends. So make an offer five days. So you found the house and now all you need to do is put in an offer. Your agent will explain everything you need to know, but basically you and the agent decide on the price you're offering and you'll need the standard 1% earnest money. Yes, you get it back if you're not accepted. So you got to have the money, you know, to make the offer and so on going forward. Plus in a tight sellers market, you might want to bump that up to 3% to 6% to show that you're playing for keeps. So you might, you know, if you've got competition going on there, you want to make sure that the person you're dealing with knows that you're, you know, you're in this to do to get this done that they have confidence that you're serious about this whole thing. So you could also include a personalized letter to the owner telling them how much you love the home and why you're the interested in their house. So get a mortgage 21 days. Your offer is accepted. Now the mortgage process starts. Now we're in the mortgage process. So though the lender you selected can lock in your interest rate, you're about to jump through more hoops and gather up more documents like current bank statements, like current current back statements and work stubs for the final mortgage documents. So you might have to gather more information to get through that final process of the lending process. Lenders will also require an appraisal and inspection and go through the lengthy list of closing expenses and estimate costs. So obviously the whole process of going through this final process takes a bit of time and then the process can take up to a few weeks during which you can hear from your lender via email or phone every few days with a new request. So you've got to be online to make sure that if they want anything, you're able to provide whatever it is they want to get this thing done to move forward and close this thing up. You'll have to manage your inspection and appraisal reports. And if there are any problems with either, then you may need to renegotiate the price, arrange the repairs or compromise with the seller on any work that needs to be done. So if there's an inspection or something like that, that it's going through during this timeframe and something comes up, then the question is, well, what are we going to do about that particular thing? And that could lead to some more kind of negotiations before the thing is finalized. And that of course would take a bit more time. There will be a title search to make sure the home is free and clear of liens and you'll be expected to select homeowners insurance and provide the lender all the information. Your insurer may even need a pre-inspection before insuring you. That's a lot to do in this week's Azure Mortgage is prepared. The one-third of the Insight Media Study respondents found that the process took longer than expected. Close on the house 40 to 50 days. You should have a final walkthrough on the day of closing or the day before to make sure that the repairs are complete and nothing has been damaged. Your lender has likely told you how you must pay closing costs, whether to bring a cashier's check or how you'll make a digital transfer of the money. So they're going to want the information that's going to have some somewhat of a secure thing, which might not just be a check, you might have that digital transfer option these days. You'll also need a photo ID and a good pen for the pages and pages of documents that you'll be signing. So obviously this could be large documentation. I'm sure they'll have a pen for you, you know, so they usually do. So in the end, keys are put in your hand and congratulations are in order. You've bought a home. The longest part of the home buying process, you might add, which part is the taking the longest actually closing on the home for which you've received a mortgage is typically the longest part of the home buying process, having a final walkthrough, paying closing costs, handling any inspection or repair issues and negotiating and exchanging contracts takes on average around five months. What should you look for when house hunting? Well, every situation is different. One of the most important things that people look for is a good location, clearly locate. We all know, we all know it. Do I have to say it? Do I? I'm not. I'm going to say it location, location, okay. You may want the property located conveniently for work or school, or perhaps you simply prefer a certain area. Other things that many people find helpful to note is curb appeal, the size and layout of the home, the number of beds and baths and the placement of windows for natural light. What are some red flags to note when house shopping? So red flags, look for big cracks in the driveway, foundation or walls that could be a foundational issue that could be costly. Obviously, the home shouldn't feel damp inside or have a musty odor. So if it's musty and damp, that could mean that there's problems somewhere there as well. Check for crack paint and window frames. Don't be fooled by staging furniture or backing smells. So if there's perfume in the house or something like that, or furniture covering over cracks and whatnot, make sure to check that out. On the bottom line, buying a home can be complicated and stressful. It sure can sometimes. The better prepared you are for each step, the better odds are of landing a good home, gather your documents and choose a real estate agent and an insurance provider before you start searching.