buying a home

If you are contemplating buying a home in Phoenix, Scottsdale, Tempe, Mesa, Cave Creek, Carefree, Fountain Hills or any other metro area there are a few things you need to know. I hope that this Home Buyers Guide will provide assistance and a better understanding of the process.

Use A Professional Real Estate Agent

Honestly, I’m not kidding. There are far too many potential pitfalls in a home purchase, and purchasing a home without the use of a Realtor and the Arizona Real Estate Purchase Contract is like going under the knife of a blindfolded brain surgeon. Instead, imagine getting that surgery with an un-blindfolded surgeon AND not having to pay for the operation! That’s one of the best things about using a buyer’s 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 haven’t spoken to a lender yet, then GO SPEAK TO A MORTGAGE LENDER. I use Angie Keene. Call Angie Keene with Amerifirst and ask her to prequalify you for a mortgage. It will take about 15 minutes: she’ll review your credit, calculate your payment and be certain you have enough funds available to be able to purchase and close on your new home. You can reach her at 480-220-5627 or via email at angiejkeene@gmail.com.

You should also be certain to have 1% to 2% of the sale price of your home’s 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 environmental and man-made factors to consider in Arizona that may affect your decision about where you purchase a home. Once you where, you can start to outline what things to look for regarding the home specifically. You would be best served to check out a great FREE booklet called the Arizona Buyers Advisory.

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. This is a bad move. I advise setting up a free search using the tools on this site for you to view and save homes you find. 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. This allows for arrangements to 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 few hours in a car and in homes is enough. Make as short a list as possible because after viewing 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

Before you start looking at homes, you should prepare yourself for 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, only to then get a response from buyers that there are additional terms and conditions that you must comply with. So now the contract has to be appended 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 then let’s say 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? Enter the experienced Realtor. I am personally working with a buyer who won’t be ready to purchase for a couple months, and in order to prepare him I’m showing him four home purchases with four different foreclosed lender types (Fannie Mae, Freddie Mac, HUD and 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 your offer has been accepted. That period begins at midnight of the day you receive written response to your Realtor that the offer has been accepted and ends 10 calendar days from the date of delivery of the acceptance of your offer at midnight. A notable exception is that some government foreclosures can use a verbal response to begin the inspection period. The important thing to remember is that EVERY day is counted, including 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 up to date 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: one very important fact about nearly all bank-owned homes is that they are sold “AS-IS” as of the day you viewed the property, and will not have any repairs made 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 (either at the end of the 10 day period or upon delivery of the Buyers Inspection Notice), the seller has five days to respond to your request for repairs in writing. They may either 1) agree to make those repairs, 2) agree that the seller will make only certain repairs, or 3) reject responsibility for 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, you will have one of two choices: you can either accept the seller’s response to your request of repairs or cancel the purchase contract based on the response.

One other key factor 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 of 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 similar. 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.

HOAs & 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 cannot 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 that will be passed on to you. You have a 10 day window to review those starting on the day that documentation is delivered. If the HOA is professionally managed, then getting the title company to gather that info can be costly. Most management companies provide that information at a cost. The most expensive I have seen was $500.00 which included two months’ upfront HOA dues. 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 since I started, but the one company I have had the best results with has been Old Republic Home Protection. Old Republic has rescued me and my clients in a variety of situations. I recommend getting enough coverage 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 usually around $475 for a home under 2500 square feet.

Communication Is Key

Communicating with everyone involved in a real estate transaction is essential to creating a successful experience for everyone. I always encourage you to call your Realtor if you have any questions, no matter how small. Keep in contact with your lender to ensure 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 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

Ideally once you’ve had your Realtor present your offer, you’ve had a discussion of when you would like to move in and take possession. If you are living in a rental, I generally advise my clients to allow enough time for a two-week overlap period so you have plenty of time to move out and move in. One thing to keep in mind 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 dealing with two separate signings and move in/move out dates. In that case, I ALWAYS recommend 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. Use that timeline 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 whenever 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 walkthrough of the home. Although most Realtors try and arrange that three 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 increases the temptation sellers 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 lender’s finance documents, Title closing documents and possibly some other required documents. A key factor 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 from 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 Realtor saying.

As far as transferring utilities, that can usually be done online very easily, as most utility companies and city services now allow internet access. There is one exception to the rule 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 (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 things 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 along the way.

* * This information is intended to be used by the general public for information and guidance 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. This document is not intended to be used as written rule, only for general purpose based on my personal experience as a Full Time licensed Realtor in the Phoenix, AZ metro area. Gentry Real Estate Group, its owners, brokers or staff are not endorsing this article nor are they a part of or contributors of its content.