Happy Saturday! This is Gary Edelbrock. I know that it's possible some of our readers are considering buying a home in Arizona for tthe first time. Nancy and Brian Biggs have provided a list of the steps to take when you're ready to make that investment.
The Process of Buying a Home in Arizona
If you are thinking about buying a home in Arizona, and you are wondering what the process is, then you have come to the right place. As agents who help people buy homes all the time, we are intimately familiar with the process of buying a home in Arizona. We need to be cognizant that buyers may need some instruction and coaching. Buyers should be informed as their home purchase is progressing and there should be no surprises. Surprises should be kept for engagements and what's behind door number two.
The following steps occur during a typical residential home purchase transaction. Your particular purchase may have intricacies not described here, but these steps are a good baseline.
- Decide to Buy a Home: This step may seem obvious, but it is very important. You do not want to waste the valuable time of agents and sellers if you are not committed to buying a home. If you are just investigating an area, please inform your agent. Your agent will still be very helpful, but can focus on the big picture rather than specific homes.
- Find a Lender: Prior to contacting a real estate agent, you will need to determine how much you can afford. You may be able to afford a lot more than you want to spend, or vice versa. Your lender will provide your agent with a Prequalification form as evidence that you can qualify for a particular loan. Once you determine how much you can afford, your agent can help you find a home within your price range. For further help on this topic, see: Choosing the Right Lender.
- Find a Competent, Compatible Agent: This is probably the most important step. You can gain a lot of peace of mind and save a lot of heartache if you find a really good real estate agent. For further help on this topic, see: Top Ten Questions to Ask When Buying a Home and Who to Work with When Buying a Home.
- Find Your Home: Work with your agent to find and view homes that best match your criteria and price range. The more information that you can provide to your agent the better. Make a list of your must haves, your wants, and your would-be-nices. Also write down your turn offs. Deal breaking attributes are just as important as your must haves.
- Write an Offer: Wonderful. You found your next home! Make sure your agent runs a detailed market analysis to determine the home's value prior to making an offer. Your agent should review and explain the purchase contract and help you determine the details of the offer. Your agent will then present the offer to the seller's agent. The seller may accept, reject, or send you a counter offer. Hopefully you will both come to agreement and arrive at an accepted purchase contract.
- Open Escrow: Your agent will open escrow. The escrow company will deposit your earnest money check and mail you an opening package with various documents that you will need to fill out. Make sure to fill these out quickly and send them back to the escrow company.
- Do Your Inspections: Inspections will usually be coordinated through your agent. You may choose to have a general home inspection, a pest inspection, or any other inspection that you decide is important to you. Make sure you read the seller's disclosure, and the seller's insurance history. After inspections, your agent will help you draft a 'BINSR', which is the document where you ask the seller to make certain repairs. The seller can fix all of the items, some of the items, or none of the items (although the seller is required to fix major systems, such as a non-functioning water heater). If the seller refuses to fix something, you can choose to accept the seller's response, or cancel the contract.
- Process the Loan: If you are getting a loan, you will have applied for the loan, and should be busy getting the lender any paperwork that the lender might require. Your agent should make sure that your loan is progressing. You will have a loan contingency and an appraisal contingency. If the home does not appraise or if your lender refuses to give you a loan, then you can cancel the contract and get your earnest money returned.
- Read the Title Commitment and CC&Rs: At some point during the transaction, you will be mailed the Title Commitment and subdivision documents (if you are buying in a home owners association). The title commitment will give you details about things that might restrict your use of the property (such as an easement) or things that might cost you money (such as inclusion in an improvement district). The subdivision documents such as the Conditions, Covenants, and Restrictions (CC&Rs) are the rules that you are agreeing to follow when you own the house.
- Phone the Troops: When you are sure that your loan will be approved, call the movers and start packing. Call the utility companies and have the utilities transferred into your name as of the day of close. The sellers should also be calling to have the utilities transferred out of their names.
- Sign the Closing Documents: Once the escrow company has all of the paperwork from your lender, the closing documents can be drawn up, and you will be contacted to meet with the escrow officer to sign the paperwork. Be sure to review and understand the closing documents and, in particular, the settlement statement (HUD-1). Don't forget to bring the certified funds for your down payment and closing costs!
- Await the Call: On the day of close, after the escrow company has received all of your funds and the lender's funds, the escrow officer will send the deed to be recorded with the Yavapai County Recorder's Office. Once the deed is recorded, the escrow officer will call you or your agent to inform you that your sale has completed. Congratulations! You now own your new home.
We hope that this information helps you understand the process for buying a home in Arizona and we hope that your home purchase goes as smoothly as possible!
Nancy and Brian Biggs, Broker/Owners
Prescott Home Realty
1177 Old Chisholm Trail
Dewey, AZ 86327
Nancy's Cell: 928-273-7113
Brian's Cell: 928-273-7112