If you are contemplating buying a home in Phoenix, Scottsdale, Tempe, Mesa, Cave Creek, Carefree, Fountain Hills and any other metro area there are a few things you need to know. I hope that this Home Buyers Guide will provide Assistance and better understanding of the process.
Use A Professional Real Estate Agent
Honestly, I’m not kidding. There are far too many pitfalls in a home purchase and purchasing a home with the use of a Realtor and the Arizona Real Estate Purchase Contract is like blindfolding a brain surgeon. And, imagine getting that surgery with the surgeon un-blindfolded and not having to pay them for the operation! That’s one of the best things about using a buyers Realtor, you generally don’t have to pay your realtor to represent you because the seller actually pays ME to work for YOU
Have your Mortgage Ready to Purchase a Phoenix Home
I can not emphasize this enough…. GET YOUR FINANCING ARRANGED FIRST! If you are arranging to purchase a home by mortgaging, you MUST do this before going to look at any home at any time. This market right now is extremely challenged because financing can be incredibly difficult to acquire. If you havent spoken to a lender yet then speak to to a mortgage lender. I use Angie Keene. Call Angie Keene with Amerifirst and ask her to pre qual you for a mortgage. It will take about 15 min, she’ll review your credit, calculate your payment and be certain if you have enough funds available to be able to purchase and close on your home purchase. You can reach here at 480-220-5627 or via email at email@example.com
You should also be certain to have 1 to 2% of the sales price of your homes list price available to place in escrow as Earnest Money . Remember that some sellers of foreclosed homes will require that the Earnest Money be NON-REFUNDABLE so be absolutely certain you qualify to purchase BEFORE you commit your hard earned cash.
You Are Responsible to Investigate
There are several different things about Arizona you should be looking at that are both environmental and man made that may affect your decision in where you decide to purchase a home and when you do decide on where it will help outline what things to look for regarding the home specifically. You would be best served to go and look at a great booklet provided to you FREE and it’s called the Arizona Buyers Advisory and if you click on the underlined link to the left you will be taken right to that page.
Search WITH Your Phoenix Real Estate Agent
A common mistake most buyers make is that they independently search for homes without any organization in mind Or they write down addresses and things on their own and then show up to meet a Realtor and provide them with the list… Bad Move. I advise setting up a free search for you to view and save homes you find such as the ARMLS search portal that is again FREE where you can look at homes. Then choose what type of home you would like to view and save them so that when you are ready to go visit those homes we can view what you saved in advance so that arrangements can be made with owner occupants or tenants and can also organize the property visits so that you can get the maximum amount of viewing possible in the shortest period of time. Really, spending more than a couple 3 hours in a car and in homes is enough. Make a short a list as possible because after viewing like 10 or more properties, you will have a difficult time remembering all the details even if you make notes.
Prepare To Purchase your Phoenix Home
You should prepare in advance of looking at homes on what to expect. This is where an experienced Realtor is a key asset in your tool belt. Say for example you are going to purchase a FNMAE (Fannie Mae) foreclosed home. What some Realtors will do is present an offer with a traditional contract and then get a response that there are additional terms and conditions that you must comply with. So now the contract has to be “addended” ( is there such a word?) to comply with those terms and conditions and this has to be explained to you. Don’t you think it would be a better idea to know what those might be in advance of presenting a contract? That’s what an experienced Realtor who has written FNMAE offers (that would be me, the “experienced Realtor”) should be doing for you.
So let’s say then that the offer is accepted (Yea!) Now FNMAE sends over what they call an “overriding addenda” that changes the terms and conditions of the original contract. It might be a nice thing to review that multi page addendum (it is more like it’s own little contract) FIRST so you’ll know what to expect, right? In fact, I have a buyer I’m meeting with this weekend who won’t be ready to purchase for a couple months and in order to prepare him I’m showing him 4 home purchases with 4 different foreclosed lender types (Fannie Mae, Fredie Mac, HUD and one a short sale) so that I can help educate him in advance.
Ask Questions and Inspect
You typically have an “inspection period” of 7-10 days when you have an accepted offer. That period begins at midnight of the day you receive written response to your Realtor that the offer has been accepted (except on some government foreclosures they can use a verbal response to begin the inspection period) and ends 10 calendar days from the date of delivery of the acceptance of your offer at midnight. The important thing to remember here though is that EVERY day is counted which included weekends and holidays!
During that 7-10 day inspection period it is your responsibility to inspect the home for defects
I recommend hiring a qualified home inspector like my preferred home inspection company “Primespec“. They are licensed, educated and brought up to speed on anything that is related to home inspections. You can also bring in other contractors like plumbers, roofers, re-modelers, flooring people and so on to gather estimates for things that might need repairing. There are other things you can inspect for that are outlined in your buyers advisory.
Remember though, one very important thing about most all bank owned homes, they are sold “AS-IS” on the day you viewed the property and they will not make repairs of any kind unless those are negotiated in advance and included with your offer. Short Sales almost never provide the repair contributions because the sellers have no money to make repairs.
After your inspection period ends wich is either at the end of the 10 day period or upon delivery of the Buyers Inspection Notice, the seller has 5 days to respond to your request for repairs in writing either 1) accepting to make those repairs, 2) accepting the seller will make only certain repairs or 3) rejecting any repairs all together. If no response is delivered, then it is assumed the seller is not agreeing to make any of the requested repairs.
“No Reply = No Repairs”
Once they deliver that response to you, there will be one of two choices. You will need to make a decision on whether you want to accept the sellers response to your request of repairs or cancel the purchase contract based on the response.
One other key ingredient when you visit a home you are contemplating a purchase on is to make a list of things that you may want to have the seller include to be sold with the home. The basic rule of real estate when viewing a property is “all things attached are part of the purchase”. So if you see a shelf bracketed to a wall in the home, it is generally “assumed” that it will be included with the home. NEVER ASSUME! If you like the shelf, include it in the list if things to be included in the sale and be specific in your description. Something like “Dark Wood Shelf with glass attached in the hallway” or something to that effect. In some cases there may be so many things in a home you would like to have stay, your Realtor may have to draw up a separate “Schedule” showing the list of items to be included. In some cases I have included the serial numbers and model numbers of appliances like a refrigerator because sellers will substitute those items without telling the buyers.
HOA’s & Hidden Costs
If you are purchasing a home that has an HOA, you should be reviewing the CC&R’s (Covenants, Conditions and Restrictions) to find out what you can and no not do within your community. Title will usually arrange the request for that documentation including any fees or assessments coming due or any unpaid HOA dues the seller has not paid and they will pass that on to you. You have a 10 day window to review those starting on the day they deliver that documentation. Getting the title company to gather that info from a property manager if it is a professionally managed HOA can be costly. Most management companies provide that information at a cost. The most expensive I have see was $500.00 which included two months up front HOA dues. So the point is, try and be prepared for unexpected charges the seller and their realtor are not disclosing ESPECIALLY if you are purchasing a foreclosed home!
Consider A Home Warranty
Home warranties will vary from company to company. I have used a few different companies when I started, but the one company I have had the best results with has been Old Republic Home Protection. I have had situations come up that Old Republic has always come to the rescue to help me with and that means helping my clients. I recommend getting coverage enough to cover the HVAC at a minimum. The general costs for a home warranty can be found on their web site, but typically I ask for the standard coverage plus Pool coverage if there is a pool and perhaps a few miscellaneous items. The cost is usally around 475 dollars for a home under 25oo sq feet.
Communication Is Key
Communicating with everyone involved in a real estate transaction is so key to completing a successful experience for everyone. I always encourage you to call your Realtor if you have any question even the most minor. Keep in contact with your lender to insure they have everything they need and remember, it’s not your Realtors job to drive your lender to do their job, it’s yours. Also, call the title company to make sure they are on schedule to close. Your Realtor can help you stay in contact with the different parties, but your participation will make things just that much easier. Remember that you and all those other parties are a “Team” of performers trying to accomplish a common goal. There is no “I” in team and that goes for everyone.
Planning Your Move to Phoenix Arizona
Hopefully when you had your Realtor present your offer, you had the discussion of when you would like to move in and take possession. If you are living in a rental then I advise my clients to allow enough time for an overlap of time so you have two seeks to move out and move in. One thing to keep in mind though about arranging move out dates… DO NOT give notice to move out until you have confirmation from the lender your loan is approved! If you own your home, you are likely having to deal with two separate signings and move in move out dates. I ALWAYS recommend in that case getting out a calendar and plotting those dates as best you can. As a general rule, most lenders will be able to have your loan prepared in 3-4 weeks providing there are no issues with you not providing the information needed in a timely manner. so use that time line and the overlap date and generally you should ask for 45 days to close at a minimum if you are financing. In most cases, that will work pretty well. If you are paying cash, then you can close when ever the time line works for the seller and yourself. Your Realtor can usually pick up the phone and ask the listing agent when the seller will be able to move out of the property.
Wrapping It Up
Providing all the repairs you requested were made to the property, your Realtor should be arranging to perform a final walk through of the home. Although most Realtors try and arrange that 3 days before the close of escrow, I like to do it the day before. The reason I do that is because often times the seller will attempt to remove items attached to the home when they move out and doing the walk through 3 days before only gives in to temptation for the seller to think they can remove things and then leave.
Title should be calling you to arrange a signing appointment of your documents. Those documents will include the lenders finance documents, Title closing documents and possible some other required documents. A key thing here is to ALWAYS have the title company make copies of everything you signed and wait at their office until they do so!
The first question I receive after the signing appointment is “When can I get the keys and move in. The answer is always “When the title company has received the funds fro the lender, passed those on to the seller and recorded the note and deed with the county showing you as the owner”. Basically, “When it funds and Records” is the typical verbiage used.
As far as transferring the utilities, that can be done usually very easily on line as most utility companies and city services now allow internet access. There is one exception to the rule though of having utilities on. If the water company for example is operated by the city they may require you show proof of the ownership to them before they will turn on the water. You should have copies of everything you signed from the title company available to you as you got those when you signed, right? Show the Settlement statement (HUD) to the utility company showing you are the purchaser and they will usually have no problem turning them on in your name. If you call the other privately operated utilities and tell them that you are the new owner on a specific date, they will transfer those utilities into your name without turning them off. GAS can be a pain because they will almost always turn off the GAS and ask you to arrange to be at the home as the new owner to have it turned back on and you will pay a fee for them to do that.
I hope that this will help you at least understand the “Basics” of the real estate purchase transaction in Arizona so that you might be better equipped to handle the things that you will be confronted with in the journey.
* * This information is intended to be used for general information and guidance by the general public and is not an interpretation of real estate contracts or real estate law. Each real estate purchase and sale will have specific circumstances and details that may or may not be part of this general description and is not intended to be used as written rule. Only for general purpose based on my personal experience as a Full Time Realtor in the Phoenix, AZ metro area as a licensed Realtor. eXp Realty LLC, it’s owners, broker or staff are not endorsing this article nor are they a part or contributors of it’s content.