Buying a Home in Arizona
Home Buyer’s Guide
Buying a home is exciting! It’s also one of the most important financial decisions you’ll make. Approaching the task of buying a home can also be overwhelming; there’s much to consider:
- How much can I spend on a house?
- How can I find the best loan?
- How much will I need for a down payment?
- Should I work with an agent or look at homes on my own?
This Buyer’s Guide will answer these questions and more, and help familiarize you with the process of buying a home in Arizona.
But before you begin shopping for a home, take care of some important tasks, such as checking your credit report, and if necessary, improving your credit score by resolving errors or discrepancies. To qualify for a mortgage, you’ll need good credit and a history of paying your bills on time.
Don’t forget to consider the additional costs to home ownership, such as property tax, homeowners insurance, homeowners association fees, and general upkeep.
Here’s an overview of the steps you’ll need to take when buying a home:
Meet with a Real Estate Professional
Don’t go it alone! Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, the process of buying a home is a complex transaction that requires the experience and support of a team of reliable professionals including a Realtor®, a lender, a home inspector, title and escrow officers, and a range of other professionals to assist in the process.
It’s tempting to call the listing agent whose name is on the sign, or in the Zillow ad, or walk into an Open House or sales office, but know that the agent you meet works for the seller and is acting in the seller’s interests.
When you work with an Accredited Buyer’s Representative®, however, you’ll have someone working exclusively for you to arrange private showings, negotiate price, terms, inspections and repairs, and expertly guide you through every step of the home buying process.
So before beginning the process of shopping for a home or visiting open houses, buyers should always secure the services of their own real estate agent. Best of all, when you work with me to buy a home, representation costs you nothing.
With your finances in order, you’ll need to contact lenders to get pre-qualified for a home loan. Getting pre-qualified for a loan before shopping for a home will help you:
- Determine a comfortable price range;
- Understand the types of loans you qualify for;
- Determine your monthly payment;
- Estimate the down payment and closing costs.
If you haven’t met with a lender, or are applying for a mortgage for the first time, my Introduction to Mortgages will prepare you for talking to lenders and choosing the best option for you. When you’re ready to appy, I can refer you to one of my trusted lending partners. (If you’re planning to make a cash purchase, you’ll need to provide a letter of credit or financial statement from your banker or asset manager when you’re ready to make an offer.)
Find A Home
There are many factors to consider in selecting a property, including location, property features, association rules and fees, taxes, and proximity to schools, recreation and amenities. As your Buyer’s Agent I’ll help you narrow your search to the homes that best fit your criteria.
When you’ve found the home you wish to purchase, I’ll help structure an offer based on property and market conditions — I’ll prepare the purchase contract and advise you of protective contingencies, including home inspections, warranties, title and escrow arrangements. Along with your offer, you’ll need to provide your loan pre-qualification (or proof of funds) and “earnest money” (usually 1% of the offer is customary).
Unless you’re offering full asking price and paying cash, expect that your first offer is not likely to be accepted without some negotiation. This is another reason why you should have your own agent negotiating with only your interests in mind.
Escrow & Closing
Escrow begins once the contract is agreed upon and signed by all parties and your earnest money is deposited with an escrow agency, a neutral third party that will receive, hold, and ultimately distribute all funds associated with the transaction. The escrow period is usually 30 to 45 days or more, but can be as little as two weeks on a cash purchase. This is often the most complicated time in the process, but as your Buyer’s Agent, i’ll coordinate all the activities for you, and keep you advised of your role each step of the way.
During escrow, you’ll need to finalize your loan application and your chosen lender will order an appraisal to confirm the property’s value. You’ll also be able to conduct inspections on the property, and based upon the results, you can negotiate with the seller to make repairs, or cancel the contract and receive a refund of your earnest money.
“Closing” is the process of finalizing the sale, ultimately transferring ownership of the home from seller to buyer. Several days prior to closing, you’ll have an opportunity option to conduct a final walk-through of the property and to confirm any negotiated repairs have been completed.
Expect to sign your closing documents 1 or 2 days prior to the closing date — that’s also the day you’ll bring a certified check or arrange a wire transfer to cover the balance of your down payment and closing costs. On closing day, the escrow agency will “record” the deed, transferring ownership, enabling you to take possession of your new home!