Buying a home is most folks biggest purchase in their lifetime. It can be scary because of the huge commitment that is undertaken. It can also be scary because of all of the steps, the forms and the ‘lingo’ of the real estate transaction.
We work with all buyers – both experianced and first time. We have the unique ability to sit with a family and walk them through the process, one step at a time and make it understandable. We work with you to find a home in which you will love…and guide you through the process. This process is the whole process. From searching for the perfect home, to making and negotiating an offer and contract, and all of the way through the close of escrow and you actually get the keys.
Our website is set up for today’s home buyers. Today’s home buyer uses the internet to search for properties that they like, and then call a Realtor. We offer a ‘Free Customized MLS Search’ in which we discuss your search parameters, then we set you up a custom web page that you can sort through all of the matches. We then can go out and look at what properties interest you. IF YOU SEE A HOME IN A HOME MAGAZINE – We CAN SHOW IT TO YOU!. We can show you any home in the MLS System.
There are also other tools and information in the buyers section of my website. Feel free to look around and explore. And when you are ready, please either call or email me. We am never too busy to talk on the phone or via email.
ALSO, be sure to check out my blog for the latest on buying homes!
Home Buying Process
Step 1 – Get pre-qualified. Call a few lenders and interview them. Tell them that you are in the process of looking for a house and that you want to get ‘pre-qualified’. Some Lenders will handle this over the phone and some will ask that you meet with them in person. They may meet you at your home or at their office. Expect that the Lender will ask you questions about your income, your debts, and your assets.
In addition finding out what kind of loans and rates they offer, Pre-qualification determines;
1) How much down payment and closing cost money you will need.
2) What interest rate options are.
3) How much you can afford.
4) How much your monthly payments will be.
After you have interviewed a couple Lenders choose one.
Step 2 – Go look at homes
The typical home buyer looks at between 5 to 20 homes before they are looking for. This is just an estimate, it could be more or less.
I will typically set up a home buyer with a customized MLS Web Portal to assist in the home search. In the Web Portal, you will be notified automatically of any house that comes on the market that meets your search criteria. The stricter your search criteria, the less homes that will be found. In the Web Portal, you can choose to ‘reject’ or ‘save’ the listing. Then we can get together and go look at homes.
In addition, any home that you find in any of the numerous Home Magazines, I can show you. My experiance is that if it didn’t come up in your MLS search criteria, then something doesn’t fit your needs; typically price or location.
Step 3 – Writing an offer on a home
All offers to purchase a home should be in writing. In Arizona, the Statute of Frauds require this. In addition, verbal contracts or agreements are very dangerous..
Offers are typically written on an Arizona Association of Realtors approved Purchase Contract, which is 9 pages long. I will give you a sample contract early in the home search so you can read through it at your leisure and understand all of the clauses. If you have a question on a certain section, I am always available to help. It takes a while to write a contract and sometimes there are several addendums that are incorporated into the offer. Please expect at least 2 hours to write an offer.
When we sit to write an offer you will need to write a check for what is known as the Earnest Money or Earnest Deposit. This check is usually made out to an Escrow Company of your choice. This money can be applied towards your total amount needed as a down payment at the Close of Escrow. The amount of earnest money depends upon several factors. All of which I will explain..
Contract negotiations occur through the buyers agent and the sellers agent. Typically in Arizona, the buyers agent faxes the contract over to the listing agent with a cover letter. Phone conversations may take place between the two agents. Less frequently is the opportunity to present the offer directly to the seller in person. The seller then reviews the offer and determines how to respond.
Step 4 – Contract Acceptance
When an Offer is presented to the Seller, the Seller is given a specific time frame to reply. The Seller has three choices when receiving an offer.
1) Accept the offer as written
2) Counter Offer the Offer
3) Reject the Offer
In the event there is a Counter Offer, the Buyers Agent will present it to the Buyer. The Buyer is given a specific time frame to reply. The Buyer has three choices when receiving a Counter Offer.
1) Accept the Counter Offer as written
2) Counter Offer the Counter Offer
3) Reject the Counter Offer
At some point in this process either an acceptance or rejection will be achieved. Rejection means going back to Step 2. Acceptance means to proceed to the next step!
If the contract is accepted, both the buyer and seller are legally bound by the terms and conditions agreed upon in the contract.
Step 5 – Escrow
The Escrow Period begins at Contract Acceptance and ends at the Close of Escrow. Close of Escrow (COE) is the moment the home is legally recorded in your name at the county recorder.
An Escrow and/or Title Company is an unbiased neutral third party that is used to take care of the accounting part of the Real Estate transaction. The Escrow/Title company uses the terms and conditions of the Purchase Contract as the Escrow Instructions. An Escrow Officer will be assigned to handle your transaction.
There are a number of fees incurred by the Escrow and/or Title Company. The party responsible for paying some of these fees is negotiated and agreed upon in step 4. Typically if the seller pays fees customarily paid by the buyer it is usally reflected in a higher price than the seller would have accepted without paying those fees.
If at anytime in the process you feel the need for legal or tax professional advice – please do so. Earlier the better.
Step 6 – Time is of the Essence There are MANY time frames mentioned in the Purchase Contract. Time of eht Essence Clause – means that the specific time frames are strictly adhered to. “Days” are calendar days unless otherwise noted.
Escrow is opened at the Escrow or Title Company and Earnest money deposited within 24 hrs or one business day from contract acceptance.
The Buyer begins completing loan process upon contract acceptance. The Buyer will give money to the Mortgage Lender for ordering the Appraisal.
The Escrow Company will order the Home Owners Association (HOA) documents.
Sellers Property Disclosure Statement (SPDS) are delivered to the Buyer within 5 days of contract acceptance. Buyer responds within 5 days.
Insurance Claims History delivered to Buyer within 5 days of contract acceptance. Buyer responds within 5 days.
Step 7 – Inspection Period – Buyer’s opportunity to perform any and all inspections that are material to the Buyer.
Buyers Inspection Period begins upon contract acceptance, and expires as identified on line 182 of the Purchase Contract. Typical Inspection Period is 10 days after Contract Acceptance.
At a minimum, the Buyer will order and have performed a professional Home Inspection and Wood Infestation (Termite) Inspection during this time frame.
A Buyers Inspection Notice delivered to Seller prior to the end of the Inspection Period.
Seller has 5 days to respond to the Buyers Inspection Notice. Any party in receipt of additional Inspection Period Notices has 5 days to respond to the other party.
Buyer applies for Homeowners Insurance . If not done already, Appraisal should be ordered at this point.
Buyer to approve/disapprove Preliminary Title Report within 5 days of receipt.
Buyer to approve/disapprove HOA CC&R’s within 5 days of receipt.
Step 8 – Appraisal
In the event the home does not at least appraise for the purchase price, the Buyer may elect to cancel within 5 days.
Step 9 – Final Stages of Closing Escrow – The Closing Date is identified in the terms and conditions agreed upon in the Purchase Contract.
Buyers Final Walkthrough should take place 3-5 days prior to the Close of Escrow date. Seller must have had all repairs that were agreed upon in the Inspection Period completed by this time.
No later than 3 days prior to Close of Escrow date, Buyer will review the HUD Settlement Statement , sign loan documents, and deliver closing funds to the Escrow or Title Company. This is a full 3 days which I will explain more on how this is calculated.
Buyer should have arranged for utilities and insurance to be effective on the close of escrow.
Step 10 – Close of Escrow Date – This is the day that the Escrow and/or Title Company will properly disperse funds and Record the new Deed , to complete the Real Estate transaction.
Title Company properly and officially disperses Buyer and Seller’s funds.
Title Company will record the new Deed in the new Buyer’s name, with the county recorder.
Title Company will notify the Buyers Agent that Recordation has taken place.
Buyers Agent will notify the Buyer, and arrange for house keys to be delivered to the Buyer.