Buying a Home in Arizona
The home buying process is pretty similar state to state, but there are some variables. Whether you are buying your first home or your 20th home, we are here to guide you through the process.
What makes the Amy Jones Group different?
At the Amy Jones Group, our Buyer Specialists work exclusively with our buyers. Why should this matter to you? They are showing properties almost every day and are experienced with every community both established and new builds. There is a special set of negotiation tools that are specific to buyers and our agents are extremely qualified in all of them and have negotiated hundreds of great deals for our buyers.
You will be working with one of our qualified buyer specialists who will get to know exactly what you’re looking for in a home. Knowing that the best homes sell quickly, you will also benefit from our agents work together as a team. This means that you will never risk missing the perfect home because your agent was not available on short notice. We are all here to make sure you find the perfect home, get the best deal and have fun during the process!
If you will be financing your purchase, your first step is to speak with a qualified lender or mortgage broker.
If you do not have a lender, we have qualified lenders that we can refer you to. Not all lenders or mortgage brokers are created equal. It’s extremely important that your lender be able to perform in a timely manner. If your lender fails to provide all required documents to the Title Company on time, you could risk being in breach of contract, which could ultimately result in forfeiting your earnest money deposit and losing the home of your dreams.
It’s a good practice to interview at least 2 lenders to compare rates and terms based on income & credit report and various other factors. The pre approval will provide you with information regarding:
- What interest rate and loan programs are available
- How much home you can afford based on a variety of factors including income
- How much your monthly payments will be
- How much down payment and closing cost funds you will need
Your lender will provide you with a Pre-Qualification Form (PQF)
It’s important to have a copy of your this (PQF) in your file as it must be submitted with your offer on a home. You do not want to risk losing the perfect home because you didn’t have the PQF.
Choosing Your Realtor®
Make sure you feel comfortable with the Realtor you select. You will be spending a lot of time with this professional and you should feel confident in his or her knowledge and expertise and also be comfortable with his or her communication style.
The agents with Amy Jones Group breath real estate every day of the year. It’s extremely unlikely that you or your friends or relatives, know the local real estate market better than your Realtor.
Viewing Homes with Your Realtor®
Use your Agent’s knowledge and experience to your advantage. If you are communicating well, your Agent will soon be able to show you only those homes that match your search criteria pretty accurately. The Internet has drastically changed the way buyers look for homes, but it’s still of utmost importance that you have a licensed professional guide you so that you get the best deal on a home.
If you're looking at New Home Communities, MAKE SURE YOUR AGENT ACCOMPANIES YOU ON YOUR FIRST VISIT TO THE MODEL HOMES OR YOU WILL LIKELY FORFEIT YOUR RIGHT TO REPRESENTATION! Most Buyers don't realize how valuable a Realtor® can be during the purchase of a "New Build" Home. Remember, the agents working at the Model Home Centers work for the builder. They do not represent you! It doesn't cost you a penny more to be represented by your own Agent, so take advantage of that right of representation. Let your Agent read the fine print of those builder's contracts (which are different than the standard Purchase Contract). Your Agent will also help you make decisions about upgrades and lot selections for the best potential appreciation and resale advantage in the years to come.
If you're visiting open houses without your Agent, that's ok...just make sure you mention it to the Agent who is hosting the open house. They will appreciate knowing that. (Ask your Agent for a handful of business cards to take with you to open houses. Just hand one to the hosting agent and he can then contact your agent for feedback)
You’ve found your dream home! It’s time to write an offer.
Your Agent will review and share with you all comparable sales within about a mile of the home you are writing an offer on. You will decide on an offer price, along with all any other terms of the sale, such as the amount of your earnest money deposit (this number is typically about 1% of purchase price), the date you want to close, any of the seller’s personal property (washer/dryer & refrigerator) you would like to to be included in the purchase, etc.
All offers to purchase a home must be in writing. Verbal offers are not entertained.
- Offers are written on an Arizona State approved Purchase Contract.
- There are additional documents that are incorporated with the Purchase Contract, so please expect at least 2 hours to write an offer.
- Bring your Checkbook! A check for your earnest deposit will be made out to the Title Company of your choice at the time your offer is written. Upon contract acceptance it will be deposited in a non-interest bearing account with the title company. The Earnest Deposit is refundable to you during the 10-day inspection period if you cancel your offer to purchase within the terms of the contract. Your earnest deposit could be forfeited and released to the seller should you breach contract during the escrow period and not close on your home. This is why it is so important that you have a competent Agent working on your behalf, monitoring all deadlines. Your Agent will explain this in more detail. Upon successful close of escrow the earnest deposit will be applied to your down payment.
- Contract negotiations between the Buyer and Seller are strictly done through the Buyers Agent and Listing Agent - much like the function of a Lawyer in legal matters. Again, all contract negotiations must be done in writing.
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:
- Accept the offer as written – Do the Happy Dance!
- Counter Offer the Offer – The seller wants to change your offer, either price, terms, conditions or all of the above.
- Reject the Offer – Boo. This doesn’t happen to often unless an offer is far below market value.
In the event there is a Counter Offer from the seller, it will be sent to your agent with a deadline for a response from you. You will have three choices when receiving a Counter Offer.
- Accept the Counter Offer as written
- Counter Offer the Counter Offer
- Reject the Counter Offer
At some point in this process either an acceptance or rejection will be achieved. Rejection means starting the process all over again and find another home.
Contract Acceptance – a meeting of the minds!
Congratulations! You are one step closing to owning the home of your dreams!
The Offer to Purchase has now become the Purchase Contract between the buyer and seller. Both you and the seller are legally bound by the terms and conditions you both agreed upon in this contract.
The Escrow Period begins at Contract Acceptance and ends at the Close of Escrow. Close of Escrow (commonly referred to as COE) is technically the moment the home is legally recorded in your name. However, the phrase “Close of Escrow” is used often to refer to the final stages of closing the transaction.
An Escrow or Title Company/Agency is employed to essentially take care of the accounting part of the Real Estate transaction. They function as an unbiased party in the transaction, using the existing terms and conditions of the Purchase Contract as the Escrow Instructions. An Escrow Officer will be assigned to handle your transaction, with assistance from their associates.
There are a number of fees incurred by the Escrow or Title Company. The party responsible for paying some of these fees is negotiated and agreed upon in the Offer to Purchase.
During the Escrow period, both you and seller will receive many important documents relating to the transaction. Your Escrow Officer will offer guidance and recommendations as to how to properly fill these out.
Time is of the Essence
Time is of the Essence means that there are specific time frames identified in the Purchase Contract that are strictly adhered to. “Days” are calendar days unless otherwise noted.
Escrow opened Title Company/Agency and Earnest money is deposited typically within 24 hours or one business day from contract acceptance.
You will begin completing loan process upon contract acceptance. An appraisal will be ordered by your mortgage lender. The cost of the appraisal is typically paid for by the buyer, however, this is a negotiable fee. Depending on the lender, this fee may be required to be paid at time of appraisal. Some appraisers will bill at Close of Escrow and the Title Company will bill either the Buyer or the Seller as negotiated within the contract.
Home Owners Association (HOA) C.C.& R. documents will be delivered to Title and Title will forward a copy to the you within 10 business days after contract acceptance for your review and acceptance. You have 5 days from receipt of documents to approve/disapprove HOA CC&R’s.
Title will also provide a copy of the Preliminary Title Report to you. You have 5 days to approve/disapprove Preliminary Title Report within 5 days of receipt.
During this time you will apply for Homeowners Insurance.
The Sellers Property Disclosure Statement (SPDS) is a document filled out by the seller that provides you with information that the seller knows about the property. This document is delivered to you within 5 days of contract acceptance. You will have 5 days to review this document and cancel or move forward with the purchase based on the information contained within the SPDS.
Insurance Claims History (or C.L.U.E.) will be delivered to you within 5 days of contract acceptance. You will have 5 days to review this document and cancel or move forward with the purchase based on the information contained within the Claims History.
Inspection Period – This is your opportunity to perform any and all inspections that are material to you. Be sure to discuss the Buyers Inspection Period with your Agent at the time of writing the Purchase Offer.
The Buyers Inspection Period begins upon contract acceptance, and is typically 10 days long (but this is another negotiable timeframe). When counting the 10 days, day 1 is the day following contract acceptance. A general inspection is not mandatory, but HIGHLY recommended. This is a cost to you and the price depends on the size of the home and whether it has a pool. This fee is payable to the inspection company at the time of inspection.
At a minimum, you will have a professional Home Inspection and Wood Infestation (Termite) Inspection (which is required if you are financing your purchase) during this time frame.
Once all inspections are completed, you will likely have a few items that will require repair by the seller. The Buyers Inspection Notice/Seller's Response (BINSR) will be completed by your Agent after you have discussed the inspection. The form will itemize corrections you are requesting and will be delivered to Seller prior to the end of the Inspection Period. If property issues are discovered during this inspection that are unacceptable to you, you have the right to cancel the contract during the inspection period with full refund of your earnest deposit. Be sure to discuss the Buyers Inspection Notice with your Realtor at the time of writing the Purchase Offer.
The Seller has 5 days to respond to the BINSR. Seller can respond is one of the following ways:
- All requested repairs will be made.
- None of the repairs will be made.
- Some of the repairs will be made (itemizing the items that will be repaired)
- A credit in the form of a dollar amount will be offered by the seller in lieu of repairs to be credited to the buyer at close of escrow.
Should the seller’s response be unacceptable to you, you may cancel the contract with all earnest monies fully refunded to you.
An appraisal will be ordered by your lender. In the event of a low appraisal, one or more of the following may happen:
- Appraisal can be appealed though the success rate of this is low.
- Seller may agree to lower their price to match the appraised value
- Seller may agree to reduce their price but split the difference with you.
- Seller may decline to reduce their price which would mean that you would have to bring additional funds to closing to make up the difference between the contracted price and the appraised value.
- You can elect to cancel the contract due to low appraisal and your earnest money will be refunded to you.
Your Realtor will certainly be of prime value in this circumstance.
Final Stages of Closing Escrow
The Closing Date is identified in the terms and conditions agreed upon in the Purchase Contract.
10 days prior to the Close of Escrow date, you should arrange for utility company connections to be placed in their names on the Close of Escrow date. Your Realtor can help you by providing the contact numbers for these companies.
No later than 3 days prior to Close of Escrow date, your Lender must have all documents to the Title Company. you will review the HUD Settlement Statement, sign loan documents, and deliver closing funds to the Title Company /Agency
Your Final Walkthrough should take place 1-2 days prior to the Close of Escrow date. Seller should have all repairs that were agreed upon in the Inspection Period completed by this time.
Close of Escrow Date – This is the day that the Title Company/Agency will properly disperse funds and Record the new Deed with the County, to complete the Real Estate transaction. This is all done electronically.
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 Office where the property is located.
Title Company will notify the Buyers Agent that Recordation has taken place.
Your Buyers Agent will notify you and arrange for house keys (and garage door openers & mailbox keys – if applicable) to be delivered to the you.
CONGRATULATIONS YOU HAVE JUST BOUGHT A HOME!