In part 1 of our step by step guide to buying a home in Arizona we discussed the main steps one should take to get ready to find and buy a home. In part two we discussed making an offer on a property and some elements of the Residential Purchase Contract. In part 3 we will take a look at several items you’ll need to do once you have an accepted offer. Not every variable is covered here, yet it should give you a general sense of what happens during this phase of the home buying process.
Step 1: Opening Escrow: Once your offer has been accepted by the home seller, we will place your home in escrow. Your earnest money check will be given to the escrow company and a deposit receipt will be given. NOTE: Your earnest money check will be deposited immediately so make sure fund are available to cover the check.
Step 2: Sending Your Contract to Your Lender: A copy of the purchase contract will be emailed to your lender so they can begin working on your file.
Step 3: Home Inspections: You have a right to hire a professional home inspector to examine the property and prepare a report of any problems they find. We STRONGLY recommend you have a professional inspection. We can supply a few companies for your review and the Internet can certainly offer more choices. We like to set up inspections ASAP since you typically have 10 days to conduct them. You will need to be present at the conclusion of the inspection to review the results and ask questions. A written with pictures is provided by most inspections. In addition, many inspection company will provide a termite inspection as part of their service. If they do not, you’ll need to schedule that inspection as well.
Step 4: Property disclosures: The seller of the home may provide a seller property disclosure statement (SPDS). The SPDS has several pages of questions and the home seller is expected to give honest answers that will help you determine if you want to move the purchase process forward. In addition, an insurance claims history report will be provided offer more information about the home. Read through these reports, they may contain information that make the purchase unwise for you. NOTE: If you are buying a bank owned home you will not get a SPDS.
Step 5: The Title and Escrow Company will send you a variety of information soon after you open escrow. Some of the documents include:
- Preliminary Title Report: The preliminary title report provides information about the property and will outline if there are issues that may make purchasing the home difficult such as tax or mechanics liens. You need to carefully read this document. We will do so as well.
- Home Owners Association Information: If your property is located within a HOA, the title and escrow company will send you several documents that outline the rules and covenants that are part of living in the neighborhood. Again, it is important that you review these rules to make sure they would not be an imposition on your lifestyle.
- Additional Info: They will also send you other documents that will require a variety of information from you such as marital status, how you want to take title, contact info and more. If you have any questions, give your title agent a call or email. We can help as well.
Step 6: Other Inspections: During your 10 day inspection period we suggest you walk around the neighborhood, talk to home owners, visit schools your kids may be attending, test out the drive times to work, review the local crime statistics, and scrutinize any other factors that could effect the quality of life you in your potential new neighborhood. It is your responsibility to uncover any potential problems prior to the end of the inspection period. NOTE: The inspection period is a good time to take pictures and room measurements too.
Step 7: The BINSR: Prior to mid-night of the final day of your inspection period we will prepare a document called the Buyers Inspection Notice Sellers Response, AKA BINSR. The BINSR has several elements outlined under the Contracts tab on the menu bar.
Step 8: The Loan: Throughout the home buying process your lender will need information required to process and approve your home loan. Please be alert to mail, emails and phone calls and respond quickly to their needs.
Step 9: The Appraisal: Your lender will order an appraisal of the home to make sure its current value matches or exceeds your offer.
Step 10: Ongoing Stuff: This is the technical term for a mishmash of things to keep in mind.
- Be careful about buying anything on credit during the home buying process. Your loan can be denied at the last minute if your debt to income ratios change. Some have found the purchase of major appliances or furniture on credit cards resulted in their loan being denied… they had a new refrigerator but nowhere to put it. Not fun.
- Keep on the lookout for letters and emails from the title and escrow company. The documents can be confusing so don’t hesitate to ask questions. In addition, many are time sensitive.
- Same as above, except from your lender.
Step 11: Plan Your Move: Make sure and contact your mover or reserve your truck in advance. We also suggest you pack a little every day so it does not overwhelm you at the end. Make sure you know where tax returns and financial/legal documents are as they may be needed by your lender.
Step 12: Utilities: A week or so prior to taking possession of the home (close of escrow) make sure and arrange turning on or transferring utilities. We also suggest you arrange for the locks to be rekeyed… who knows who has a key to the house.
Step 13: The Final Walkthrough: Approximately 3 days before you take possession of the home we will revisit the property to make sure any promised repairs were completed and insure the home is in the same condition as when you made your offer. Often the home owner will be there to give you additional information.
Step 14: Signing Loan & Escrow Documents: About the same time as the final walkthrough we’ll be meeting at the Title & Escrow Company to sign a lot of documents. The title officer is there to answer any questions. If we are your agents, one of us will be there too.
Step 15: YOU OWN THE HOME: If all has gone on schedule, you will take possession of the home on the close of escrow date noted in the Purchase Offer. Officially, the home becomes yours when the deed is recorded with the County. Don’t worry, this is handled by your title and escrow company. YEAH… you made it.
BIG NOTE: The Step By Step Guide does not cover changes to the home buying process when buying a bank owned home or short sale. Your agent can help you understand the differences.