The Expenses of Buying Land Versus a House

The time it takes to buy a home depends on many factors, from saving for a downpayment to choosing the right realtor, to the type of home you desire.

By Emily Southey | 8 minute read

Sep 8

A house is a major purchase, so it’s no wonder it can’t be made in a day. If you’re considering buying a home and want to know how long the process will take, you’ve come to the right place. The length of the homebuying process depends on a variety of factors. In this article, we break down the average house-hunting time in Canada and provide some tips on how to buy a house fast. Read on to learn more.

 

Average House-Hunting Time

The average house-hunting time in Canada is between three and six months. It usually takes two to three months to find the right home and then another one or two months to close the deal. However, in some cases, buying a house can take as little as two months, especially if you buy a house with cash. The length of time it takes to buy a house ultimately depends on a number of factors, like the housing market, your preferences, your financing needs, the time of year, and whether you are buying a pre-construction home or a resale property.

 

How Long Is the Process of Buying a House?

As mentioned, it takes homebuyers in Canada roughly three to six months to buy a home, with an average time frame of four-and-a-half months. Please note that this process does not include the time it takes to save up for a down payment. Rather, it begins when you choose a realtor, start shopping for homes, and ends on the date the title to your new home is transferred.

The length of the homebuying process is an important piece of information for many homebuyers. It can help them decide on the right time of year to buy a house. Keep reading for a more detailed breakdown of how long each step in the homebuying process takes.

 

  • Saving for the down payment (six months to two years): Unless you intend to buy a home with no down payment, you will need to spend time growing your savings so you can afford to make a down payment between 5% and 20% of the purchase price. Saving for a down payment is typically the lengthiest part of the homebuying process and can take anywhere from six months to two years, or possibly even longer if you’re buying a house with a low income.
  • Getting a mortgage pre-approval (one to 10 days): Getting pre-approved for a mortgage is a crucial step in the homebuying process, one that usually takes an average of one to 10 days. Whether you choose to get pre-approved for a mortgage through a mortgage broker or bank, the pre-approval process gives homebuyers a better understanding of how much they can afford to spend on a house and what their estimated monthly mortgage payments will add up to.
  • Choosing a realtor (one to two weeks): Choosing a realtor is an important task. And while not necessary (you could opt to buy a house without a realtor), it is strongly recommended. Ask for recommendations from friends or do some research on the internet. Take the time to interview multiple candidates, asking them important questions to help you gauge whether they are the right fit.
  • Visiting homes (one week to three months): Touring houses is a fun process, but one that can be lengthy depending on your personal preferences and housing market inventory. For example, if you have a long list of “must-haves,” it may take longer to find the perfect home. Meanwhile, in a hot market, you might have to move quickly or risk losing your preferred home.
  • Making an offer on a home (24 to 72 hours): Once you’ve found your dream home, it’s time to make an offer. Most offers have expiration dates within 24 to 72 hours from the time the offer is made. Therefore, this part of the process tends to move quickly, though it can be slowed down by counteroffers.
  • Signing on the dotted line and taking possession of the home (30 to 45 days): Closing on a house takes an average of 30 to 45 days from the date the offer is accepted. However, in some cases, it can take longer, especially if the transaction is dependent on several homebuying contingencies, like a home sale, financing, or home inspection contingency.

The length of time it takes to buy a house ultimately depends on a number of factors, like the housing market, your preferences, your financing needs, the time of year, and whether you are buying a pre-construction home or a resale property.

How to Buy a House Fast

If you’re looking to speed up the homebuying process, continue reading for a list of tips on how to buy a house fast.

 

1. Get pre-approved by a mortgage lender

Our first tip for buying a house fast is to get pre-approved by a mortgage lender. Mortgage pre-approval has several benefits, one of which is speeding up the buying process. If you get pre-approved for a mortgage in advance, the mortgage approval process should be quicker. Plus, a seller will be more likely to accept your offer if they can see you’ve been pre-approved for a mortgage (this is why one of our strategies for making an offer is to include a mortgage pre-approval letter).

 

2. Pay closing costs on time

A second tip to help speed up the homebuying process is to pay all closing costs on time. A common reason the homebuying process is delayed is that the homebuyer does not have the funds to close on time. If a buyer cannot secure their financing before the closing date, the deal can be delayed or cancelled altogether. Avoiding a late closing is critical as the penalties of not closing on time can be steep, not to mention the fact that it delays the homebuying process. Making the down payment and paying closing costs on time is especially important if the purchase agreement includes a time-of-the-essence clause.

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3. Buy a home with cash

 

For a simpler and quicker homebuying process, consider buying a home with cash. While this might not be feasible for everyone, this method almost always translates to less paperwork and a faster closing date (often within 30 days or less of the offer being accepted). In contrast, paying for a home with a mortgage extends the homebuying process as the buyer will need to secure the necessary financing from a mortgage lender, and having a loan approved and processed takes time. Therefore, by purchasing a home with cash, you might be able to cut the closing time in half.

4. Boost your credit score

 

One last tip for buying a house fast is to improve your credit score. The better your credit score, the more likely it is you will be pre-approved for a mortgage. Plus, the mortgage loan you’re pre-approved for may be far more than if you tried to buy a home with bad credit. Ultimately, the higher your credit score, the faster you can get pre-approved and start house hunting. Plus, since the terms of your mortgage will likely be more advantageous, this can reassure sellers, making it more likely they will accept your offer. For these reasons, boosting your credit score is one way to speed up the homebuying process. Follow the tips below to improve your credit score.

 

  • Keep your credit utilization ratio (your total credit limit divided by your existing debt) below 30%.
  • Do not apply for lots of credit in a short time frame.
  • Keep old credit cards open (doing so can help keep your credit utilization ratio low).
  • Pay your bills on time and in full.

 

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Frequently Asked Questions

What Is the Longest Part of the Homebuying Process?

The longest part of the homebuying process is undoubtedly saving for the down payment. When buying a home, even if you plan to finance the purchase with a mortgage, you will likely need to save up enough money for the down payment. As homes are expensive, so too are down payments. Plus, there are several down payment requirements in Canada. Depending on the purchase price of the home and the type of home you purchase (pre-construction or resale), you might be required to make a 5%, 10%, or 20% down payment. Alternatively, if you choose to buy land and build your own home, the down payments are usually a minimum of 20%. 

What Should You Look for When House Hunting to Save Time?

If you’re trying to save time when house hunting, be sure to get pre-approved for a mortgage, consider buying a home with cash, make sure to pay closing costs on time, and follow the additional tips below. 

Narrow down your search according to location and budget

Streamline the house-hunting process by narrowing down your search according to location and budget. Assuming you got pre-approved for a mortgage, you should have a good idea of how much of a price you can afford. Use this information to instantly narrow down your search, and remember to avoid maxing out your budget. Next, think carefully about your preferred location — not just the city but the specific neighbourhood. If you’re having trouble deciding on a location, check out this list of cheap places to buy houses in Ontario.  

Make a list of deal breakers

The next step that will almost certainly shave time off the house-hunting process is to make a list of deal breakers. In essence, this is your list of “must-haves.” You can also include a supplementary list of “nice-to-haves” if necessary. “Must haves,” as the name suggests, are things you cannot live without. For example, if you’re a family of four, a must-have might be three bedrooms. Other examples of must-haves could be a finished basement, spacious backyard, or open-concept floor plan. Compare every home you visit against your list of deal breakers to help you decide if it’s the right fit.  

Ascertain the seller’s motivations

The final tip for saving time when house hunting is to ascertain the seller’s motivations. Some sellers are extremely motivated to sell their homes as quickly as possible. If speed is a top priority for you, it’s important to determine which sellers fall into the “motivated” category. A realtor can help you do this. For example, if the seller is urgently relocating or a family emergency is what precipitated the home sale, they might be more likely to agree to a fast closing date or more responsive to initial offers. On the other hand, if the seller isn’t in a rush (perhaps they are downsizing after decades of living in the same home), then they might prioritize the “right” seller over the first seller. Not only can ascertaining the seller’s motivations help you devise the best possible offer, but it can also help speed up the homebuying process if you find a seller who is motivated.

How Can I Avoid Delays When Buying a House?

To avoid delays when buying a house, make sure to get pre-approved for a mortgage. Mortgage pre-approval forces the buyer to gather all the necessary documents in advance, which will only serve to speed up the formal mortgage approval process when it comes time to apply for real. Documents and information vary by lender but homebuyers should be prepared to provide proof of income/employment, personal identification, proof of all major assets (for example, cars, cottages, boats), and information on any loans or outstanding debt. 

Another way to avoid delays when buying a house is to pay all closing costs on time. If you’ve gotten pre-approved for a mortgage, then you should have no trouble securing the necessary financing. This can help you pay out-of-pocket expenses, like closing costs and property taxes. Whatever you do, especially if you want the homebuying process to go as quickly as possible, do not miss the close date. Doing so can put the entire transaction in jeopardy and may come with serious financial ramifications. 

Lastly, avoid delays when buying a house by purchasing a home with cash. Cash purchases are usually simpler and have much shorter closing periods. In addition, if speed is a priority, we recommend against purchasing a pre-construction home, building your own home, buying a fixer-upper, or buying a house from a deceased estate. All of these options tend to significantly extend the homebuying process by anywhere from a few months to a year or more. 

How Can I Get Pre-Approved Faster?

You can get pre-approved for a mortgage faster by gathering the necessary documents in advance (we recommend starting the homebuying process with this step, even before hiring a realtor or visiting homes). The necessary documents for mortgage pre-approval are as follows: 

    • Proof of income/employment (for example, a pay stub that shows your current salary or hourly rate, a letter from your employer detailing your position at the company, your salary, and how long you’ve worked for them, or a recent notice of assessment from the Canada Revenue Agency (CRA), if you are self-employed). 

    • Proof of other major assets, such as a car, boat, or seasonal property like a cottage.

    • Personal identification in the form of a valid, government-issued ID, such as a driver’s licence or Canadian passport.

    • Information about any outstanding debt, loans, or other financial obligations, such as student or car loans, credit card balances, lines of credit, or child/spousal support.

    • Proof you can afford a down payment on a home and the closing costs, as well as monthly mortgage payments (proof could be bank statements or investment statements showing how much money you have in savings).

Further, if you don’t have the time to shop around for mortgages and compare rates, you may wish to work with a mortgage broker. Doing so might speed up the pre-approval process as they can contact mortgage lenders and obtain and compare quotes on your behalf.

Another way to avoid delays when buying a house is to pay all closing costs on time. If you’ve gotten pre-approved for a mortgage, then you should have no trouble securing the necessary financing. This can help you pay out-of-pocket expenses, like closing costs and property taxes. Whatever you do, especially if you want the homebuying process to go as quickly as possible, do not miss the close date. Doing so can put the entire transaction in jeopardy and may come with serious financial ramifications.

Lastly, avoid delays when buying a house by purchasing a home with cash. Cash purchases are usually simpler and have much shorter closing periods. In addition, if speed is a priority, we recommend against purchasing a pre-construction home, building your own home, buying a fixer-upper, or buying a house from a deceased estate. All of these options tend to significantly extend the homebuying process by anywhere from a few months to a year or more.

How Long Does It Take to Get Mortgage Approval?

On average, mortgage approval in Canada takes anywhere from two to 10 business days. However, it can take longer in certain instances, such as if you have bad credit. For this reason, you might wish to make your purchase agreement conditional on receiving the necessary financing.  

Emily Southey

Wahi Writer