How Long Does It Take To Buy a House?

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SOURCE: Realtor.com

How long does it take to buy a house? While estimating a timeline for homebuying will depend on many variables, real estate experts estimate that the average time required is around four months.

This timeline is important for buyers to keep in mind for a variety of reasons. Many buyers might hope to time their home purchase with when their rental lease is up. Other buyers might want to pace their house hunt so that they are settled in their new home before the start of school. Still other buyers might also be home sellers who first need to close on the sale of their old house before they can buy their next house.

In short, homebuyers might need to fit their home search into any number of time-sensitive situations, so knowing how long the buying process typically takes can help them plan accordingly. Plus, buyers should know that four months is how long it might take if everything goes smoothly. If problems crop up—with the home inspection, appraisal, mortgage, or other things—then the real estate buying process could take even longer.

Buying a house may take time, but there are good reasons why it’s no impulse purchase. To help illuminate what’s going on, here’s a rundown of the various stages you’ll encounter while home shopping to help you plan your buying timeline just right.

Step 1: Get pre-approved for a mortgage

Your first step shouldn’t be to check out homes; it should be to get mortgage pre-approval from a mortgage lender or broker. This is presuming you aren’t planning to make an all-cash offer to a seller, but rather need a loan to make your goal of home buying happen.

“Homebuyers will want to speak to a mortgage lender or  broker to start the loan process early so there are no surprises,” says real estate agent Beverley Hourlier with Hilltop Chateau Realty, in San Diego, CA.

There are a couple of reasons for this: One, unless you’re really organized, it will take you a while to gather all the documents you need to show your lender for your loan, including pay stubs and tax forms. Two, if the mortgage lender finds out that your finances are less than ideal for homeownership—because of, for instance, a poor credit score—it can take months to clean up your finances so you’re in better standing. Oh, and you’ll need to make sure you’ve got enough cash so you can afford to make a decent down payment on your mortgage, too.

If your finances are in good shape, you can get mortgage pre-approval, which is a contract that the lender will lend you a certain amount of money. Being pre-approved for a mortgage and having this paperwork in hand is a major asset, because it shows sellers that you can afford their house and mean business, and it’s a prime way to negotiate with a home seller. (Keep in mind that mortgage pre-approval is different than mortgage pre-qualification).

If your financial circumstances don’t change much by the time you close this real estate deal, you can ask a lender to extend that loan promise for an additional 90 to 120 days or longer; you can also lock in a great interest rate so it doesn’t rise by the time you’re actually buying a house.

Step 2: Find your dream home

While looking at real estate listings online is fun and easy, things slow down once you get to the point where you’re visiting houses in person. After all, buyers can’t just pop in whenever they want. Instead, you’ll have to schedule an appointment for a home tour that work for the home sellers, too.

So in the same way buyers have to kiss a lot of frogs before finding a prince, you’ll likely need to spend some time house hunting, and see a lot of homes before you find one you love. On average, buyers see 10 houses before they make an offer, but that number can be much higher.

But any good real estate agent will tell you that it’s time well spent. According to  agent Melanie Atkinson with Coldwell Banker Residential Real Estate, in Tampa, FL, when buying a house, “The last thing you want is to feel rushed or make a decision in haste that you will later regret.”

Step 3: Prepare for closing day

Once you’ve found a house you love, made an offer that’s been accepted, and are under contract to purchase the property (which can typically happen in a few days), the waiting game really begins.

On average, it takes around 50 days to close on a loan for buying a house, from the time lenders pre-approve your mortgage to underwriting the loan to the day you sign all the documents and move into your new home.

Can you see now why getting pre-approval early is so important for the buying process? In fact, securing a loan is the most common holdup in buying a house.

Even with a pre-approval, it can still take 30 days for the lender to do its due diligence by conducting a home appraisal to make sure it’s a good investment (since after all, the lender’s money is on the line) and underwriting your mortgage.

Meanwhile, if you’re under contract to buy a particular piece of real estate, it will also take time for you and your real estate agent to do your own due diligence to make sure the house isn’t hiding some glaring flaw you’ll regret inheriting. You can do this by checking the home sellers’ disclosure statements for any problems in the house that they’re aware of, and also hiring a home inspector to check out the house from top to bottom for any problems. All of this takes time. Closing is a not a time to rush; you and your agent will want to make sure to do everything right.

Bottom line: As much as people complain about how long it takes to buy a house, it’s all in the interests of making sure you’re happy once you’re a homeowner and this piece of real estate is finally yours. So when in doubt, there is no better time to start than now! If you’re worried you’ll find your dream house too soon, there are ways to negotiate with a seller and their agent so that it all works out.

SOURCE: Realtor.com

November 15, 2023 Weekly Market Watch with Chris Doucet

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November 9, 2023 Weekly Market Watch with Chris Doucet marketingcenter--

CURATED • NOVEMBER 2023 HOMES ACROSS THE STATES WITH CHRIS DOUCET

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CURATED • NOVEMBER 2023 HOMES ACROSS THE STATES WITH CHRIS DOUCET marketingcenter--

November 9, 2023 Weekly Market Watch with Chris Doucet

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November 9, 2023 Weekly Market Watch with Chris Doucet marketingcenter--

Debunking the 7 Myths and Misconceptions About Turnkey Investing

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SOURCE: Bigger Pockets

When it comes to the rabbit hole of real estate investing options, the word “turnkey” is among the most commonly used but poorly applied terms around. In fact, many businesses use “turnkey” in their marketing materials just to capture a large audience.

Turnkey investing is still a highly valuable investment strategy that offers many clear advantages that would otherwise be difficult to come by. The most obvious reason to use this strategy is that the properties are already livable—you won’t spend nearly as much time on renovations and repairs. 

I’ve found that these properties are also more affordable in comparison to building from scratch. Good prices are necessary at a time when property values are increasing rapidly. You won’t need to consider material costs or try to find affordable contractors, which will make it easier for you to maximize your returns. 

Turnkey investing allows you to add real estate to your portfolio quickly while benefiting from good loan terms and low down payments. In fact, this might be the simplest way to get into real estate investing if you don’t have much experience. Keep in mind that international real estate investing is also more feasible with turnkey properties.

When properly utilized, turnkey investing is among the best strategies you can implement when you’re trying to grow your investment portfolio. As with any investment, regardless of whether it’s classified as turnkey, you must develop a clear idea of your investment goals before making sure to properly vet any investment opportunity you find. 

There are also many preconceived notions about what exactly turnkey investing is, why someone should or shouldn’t invest in these properties, and what the pros and cons are. These ideas come from the assumption that “turnkey” can be placed under a single category, which is impossible. 

Over the past decade that I’ve been in the industry and part of the leading turnkey investment company, I’ve observed how the industry has evolved over time and why it’s necessary to address the most common misconceptions about turnkey investing. Here’s a look at them.

Myth Number 1: Turnkey Investing Is Fully Passive

Turnkey investing is often more passive than other types of investing when you’re self-managing, attempting to rehab/BRRRR properties, or investing on your own. However, this approach isn’t entirely hands-off. You’ll need to manage the property manager you hire and make sure that everyone on your team is operating as they should.

If you’re working with a great turnkey team, all the necessary systems should already be set up for you. That said, you’ll still be tasked with spending some time on this investment strategy. 

In fact, I would argue that there’s no such thing as fully passive income. You always need to manage your money, which requires at least a small level of involvement. However, in the world of real estate ownership, turnkey investing can be more passive than other forms of active investments.

Myth Number 2: Turnkey Offers Lower Returns Than Investing on Your Own

Another turnkey investing myth is that it offers lower returns than investing on your own. This can be true if you’re an experienced investor with a proven business model where you add value to rental real estate. I do think, however, that the risk is higher if you’re a new investor.

It’s fine to do things on your own, but you should expect to make more mistakes in the beginning as you learn. Some of those mistakes can wipe out decades’ worth of returns, which is just part of the game. Having a consistent experience with a long-term tenant in a strong market is far more important for long-term returns versus trying to force equity through rehab or buying a below-market property in a location that might not provide consistent long-term returns.

Over the years, I’ve learned that choosing the right market location is much more important for long-term equity growth than trying to rehab a property in a market that has low returns in an attempt to force equity. I’ve been able to create way more equity and cash flow in properties I didn’t rehab in good markets than properties I rehabbed in markets that weren’t as attractive. 

We’ve all heard the saying “location, location, location,” so I guess there’s some truth to that.

Myth Number 3: There Is No Equity in Turnkey, and They’re Overpriced

This myth is certainly not true with many of the markets that turnkey investors focus on, especially with new construction. In this case, many properties have immediate equity that can be as high as 10% to 20%. 

There have definitely been some bad actors in the past that have overpriced inexpensive homes in poor locations while also requiring all-cash sales, where you can’t obtain an inspection or appraisal. However, this isn’t true of the turnkey industry as a whole. I believe that a few of the businesses that have attempted this strategy didn’t survive for very long. This is likely where the misconception came from.

All sellers want to offload their homes at the highest market value possible, especially if the home was newly built or recently renovated. In the turnkey industry, however, there are times when the buyer has more negotiating power and incentives that the average seller wouldn’t provide.

When looking at it from a volume perspective, it’s possible to achieve below-market pricing in situations where there’s volume. By partnering with a real estate investment company, individual investors are able to benefit from wholesale pricing in certain new construction locations. This option exists because the real estate investment company is able to commit to many transactions.

The company can then use this position to negotiate discounted prices that the individual investor otherwise wouldn’t have access to. If an individual investor is purchasing one or two properties, they’ll likely pay at or above the market price. This is yet another example of how buying properties via a turnkey group allows for discounted pricing that you wouldn’t be able to access on your own.

There are also many additional benefits that occur when you buy with a reputable turnkey provider that will stay on even after the transaction. The turnkey provider you partner with can assist with things like management and potential maintenance or tenant issues. This benefit isn’t available when you buy from a random seller on the MLS. 

In short, there are turnkey solutions that can be purchased below market value and may come with added benefits.

Myth Number 4: Investing in Turnkey Removes All Risks

If you own rental real estate, you’ll invariably be subjected to the same risks as everyone else, including market changes, costly maintenance items, property management issues, and unfavorable tenants. While many of these risks can be mitigated by investing in real estate with a well-established team that has the right systems in place, they will never be fully removed. Make sure you keep adequate reserves for any investment property you buy and know that, ultimately, you are the owner of the property.

Turnkey can be an easy, effective way for investors to get started, diversify their portfolios, and scale their holdings. Whether you’re a new or seasoned real estate enthusiast, the turnkey strategy can be advantageous to your position.

Myth Number 5: Turnkey Operators Won’t Rehab Older Homes in Cheap Markets that Won’t Appreciate

This is partially true because some rehabbers give turnkey a bad name. However, it’s certainly not true of everyone in the turnkey space. 

There are turnkey providers across the country that operate in almost every market throughout the U.S. Remember, turnkey investing is a diverse industry that has many different business models.

There are some turnkey operators that specialize in new construction in growth areas, while other investors focus on more affordable markets like the Midwest. It’s important to match your goals with the team and market that makes the most sense for you. 

Garnering long-term success with this strategy is only possible with the right approach. Look for great growth markets that have low maintenance, strong cash flow, some amount of immediate equity, and the ability to attract quality tenants.

Myth Number 6: You Need a Significant Down Payment to Buy Turnkey Properties and Have Limited Financing Options

Among the most common misconceptions about turnkey investing is that you need to make a sizable down payment to purchase turnkey properties since the financing options are limited. This is simply not the case at all. 

In my opinion, a turnkey operator should never dictate what financing you need to use or require things like all-cash purchases. These are red flags that you should be on the lookout for during your research. 

If a team wants to set you up for success, they’ll present multiple financing options and help you understand what they mean to you based on your goals. However, they’ll leave the final decision up to you.

You can get some great terms when it comes to seller financing or investor loans. For example, some investor loans are available with a down payment of just 5% to 10% and no private mortgage insurance. These are true portfolio loans that don’t require the same underwriting as a conventional loan. If you want to use conventional financing, however, you certainly could.

It’s ultimately up to the investor as to what type of loan options they’d like to use that makes the most sense to them. There are numerous loan options you can select from when investing in turnkey properties, which include low down payments, DSCR loans, and seller financing. Having multiple financing options at your disposal is a tremendous benefit at times when interest rates are highly dynamic.

Myth Number 7: Turnkey Properties Are Only Single-Family Homes

As mentioned, turnkey investing is a very diverse space with a myriad of business models. Turnkey operators can specialize in alternative investment options, multifamily properties, commercial investments, etc.

You can invest in single-family, multifamily, commercial, new construction, and development projects, all of which are classified as turnkey properties. It’s also possible to put your money into syndication funds. There are plenty of opportunities to engage in turnkey investing without limiting yourself to single-family homes. 

Don’t Walk Away From Turnkeys

I hope this has helped you understand how to further research and consider turnkey investing to determine if it’s a strategy that will assist you in accomplishing your investment goals. 

SOURCE: Bigger Pockets