10 Steps to Buying a Home
– 1. Get Pre-approved for Financing –
Meeting with a good mortgage lender is the critical first step so you’ll know what you can qualify for, how much you comfortably afford, and how much cash you’ll need for the down payment and closing costs. See our Mortages pages for more detail on loan types and some of our trusted lenders. If you're paying cash we'll just need a bank statement or letter from your financial institution as proof of funds.
– 2. Meet Your Realtor for a Buyer Consultation –
We’ll dive deep into what you’re looking for in your new house and neighborhood, and will guide you to homes and areas that closely match your goals, location and budget. If possible we’ll do this in one of our 7 offices so you can see what’s available in real time on the big screen as we fine-tune your search.
– 3. Set Up MLS Search and Tour Homes –
Once your search parameters have been set up, you’ll get daily email updates on newly listed homes that are possible matches for you. You can tell us which homes you’d like to see or we can set up tours of homes we think you’ll like, whichever you prefer. We’ll set up showings and ask for your feedback at each home we see to get a better idea of exactly what you’re looking for, and may tweak the search parameters as needed.
– 4. Craft and Negotiate Purchase Offer –
When we find the home you want, we’ll create a financial analysis of neighborhood supply & demand metrics and what similar homes have sold for so you can make an informed decision on what price to offer. We’ll also talk with the listing agent so our offer has a high probability of being accepted. We’ll write up our offer with details like price, closing date, financing terms, and any terms & conditions we need (like selling your current house first) and submit it to the seller. They may accept or reject it outright, or there may be some back and forth counter offers. Resale homes almost always use the standardized Arizona Association of Realtors contract templates, while new home builders each have their own contracts.
– 5. Offer Accepted, Open Escrow –
Once we have an accepted offer, all contractual timelines begin and we’ll guide you through each step. Arizona doesn’t use attorneys for real estate transactions, instead we have an independent 3rd party Title & Escrow Company that sits between buyer and seller and holds all contracts and monies until the transaction closes, and ensures the contract is executed as written. To open escrow, you will deposit your Earnest Money (typically 1% of purchase price) with the Title Company to demonstrate you’re a serious buyer. This money is not a separate fee, it will be applied toward your down payment and closing costs.
– 6. Inspection Period –
We have 10 days from contract acceptance to do our home and termite inspection, as well as any other due diligence needed to be sure you’re comfortable with what you’re buying. We maintain a list of respected inspectors and contractors if you’d like recommendations. A home and termite inspection typically runs from $250 to $400 which you’ll pay at the time of service. At the end of the 10 day inspection period, we deliver a Buyer’s Inspection Notice and Seller’s Response (BINSR) to the seller that either (1) accepts the property in its current condition, (2) cancels the contract and returns your Earnest Money, or (3) lists repairs we want the seller to make. If we ask for repairs, the seller has 5 days to agree to everything (which closes the inspection period) or respond with what they are willing to do, in which case we have 5 days to accept their response or cancel the contract and get your Earnest Money back. During this period you’ll also receive a number of other disclosures which you can also choose to accept or reject. Once the inspection period is closed, you can no longer cancel the contract at will without risking loss of your Earnest Money. You do have two additional outs if this is a financed offer, however, see below.
– 7. Appraisal –
If you’re financing your purchase, your lender will order an appraisal to make sure the property is worth at least as much as you’ve offered to pay for it. Cost varies by lender, and condos are higher because they also require a condo certification. $400 to $750 is typical, and your lender will collect this from you when they order the appraisal. We’ll usually wait to order it until the inspection period is complete and know we’re moving forward. If the appraisal comes back lower than what you’ve offered to pay, you have the right to cancel the contract and get your Earnest Money back, but more commonly we will try to negotiate an equitable compromise with the seller first.
– 8. Loan Approval and Documents to Title –
At least 3 days prior to Close of Escrow we expect to hear from your lender that your loan is approved, they’ve sent you final disclosures, and all their paperwork is at the Title Company ready to be signed. This is the final milestone to buying your home. We strive to make your financing bullet-proof from the start, but on rare occasions something will be discovered during underwriting that causes a loan to be declined. In the unlikely event this happens, the contract is canceled and you get your Earnest Money back (but unfortunately you would lose what you paid for the inspections and appraisal).
– 9. Document Signing and Final Steps –
Once the Title Company receives the lender’s documents, they will generate a Settlement Statement that lists all the debits and credits for buyer & seller, and shows the amount of cash you’ll need to bring to closing, either as a certified check or funds wired from your bank. Next we’ll set up an appointment to sign all documents at the title company a few days prior to the closing date, and we’ll join you for that. If you’re out of town or signing at title is not convenient, we can arrange for a mobile notary to meet you. Once signed, documents go back to the lender and they schedule the wiring of your loan funds to arrive on your closing date.
– 10. Closing & Recording –
Even though you’ve signed everything, the house isn’t yours just yet. On closing day, once the Title Company has received the wired loan funds from the lender as well as your check or wire for down payment and closing costs, they will release the file to the County Recorder’s office. When we receive confirmation that the transaction has been recorded, the home is officially yours and we can give you the keys. Congratulations, you’re a new homeowner!