The Buying Process
Once we find a home you love and decide to buy it, the first thing we’ll do is to prepare and make an offer. We use the standard Arizona “Residential Resale Real Estate Purchase Contract.” In it we’ll have the offer price, the closing date and how the closing costs are going to be split. There are four main contingencies in this offer. The first one is your loan approval, then the property appraising for at least the purchase price, the inspection and the approval of the Homeowners Association (HOA) rules and financials. Any one of those contingencies allows you to cancel the contract and get your earnest money back. There are timelines for all of this.
The earnest money is usually 1% of the offer price but that’s just sort of a guide, there’s no set rule. The more the earnest money, the stronger the offer looks to the seller. Even though we get it back if one of the contingencies isn’t met.
As soon as we’ve agreed to the price and the contract is accepted, we deposit your earnest money with the Escrow Company and “open escrow”. At this time the escrow company begins their work as far as checking the title and ordering the documents from the HOA. They will also let the lender know of their fees so lender can provide approximate cost disclosures to you. We send the contract to the lender and then the lender will prepare their disclosures for you to sign. At this time, once we have an accepted contract, you can “lock” your interest rate.
Immediately after that we do the physical inspection of the property. We want to get that done right away in case there’s something seriously wrong with the home. Normally there are defective items that come up during the inspection that we give the seller an opportunity to correct. If he’s unable or unwilling, then you can cancel the contract and get your money back. You would just be out the money you had paid the inspector.
The inspection of the home starts with an overall general inspection and a termite inspection. The price is based on the size of the house, the age and whether or not they have to inspect a pool. It’s going to be in the neighborhood of $300-$600. Sometimes the first inspector recommends we get a further inspection of a flagged item. The most common one is the roof.
During our ten day inspection period is also the time for you to make sure you’re OK with everything else about the area. That would be checking crime statistics, checking the schools, talking to the neighbors. We just want to make sure that we get all of your questions and concerns addressed during this time. We only have one opportunity to cancel for any of these reasons and it’s going to be during the inspection period.
Just before the close of escrow, we go back to the home for a final walk-through to make sure all the agreed to repairs have been made and that the house is in the same condition as when we inspected it. Sometimes we have to have the inspector back to check the repairs, it all depends on how many there were and how complicated they were.
Once your loan is approved by the lender, all the documents will be sent for signing to the Escrow Company. You will have to bring a cashier’s check to complete your transaction. After signing, the Deed is scheduled to be recorded the same day or next, as a public record. When the Deed is recorded at the County Recorder’s Office, it is the moment that ownership transfers to you. Congratulations! You’re now a homeowner.