We love representing home buyers! Whether you are downsizing/upsizing, relocating or retiring to Tucson, or you are a first time buyer (congratulations!), working on your behalf doesn’t usually cost you anything; zero, zilch, nada. We are compensated from a share of the Listing Agent’s commission which is paid for by the Seller.
Real Estate Law and processes differ state-by-state. In a nutshell, here are the most important steps to purchase a home in Arizona:
- Funding the purchase. If you are purchasing your home via a mortgage (loan), then the very first step is to get pre-qualified, preferably by a local lender. Local lenders are fluent with the Arizona home buying process, and know that a requirement of the Residential Purchase Contract is to include an AAR Pre-Qualification Form. If you will be paying cash for the purchase, you can skip this step, however, you will be required to provide Proof of Funds with your offer. We are affiliated with several local lenders and are happy to refer you to a few to interview.
- Work with a trusted REALTOR who you are comfortable with. As noted above, having representation from a seasoned local REALTOR typically doesn’t cost you anything. The Listing Agent represents the seller and works on behalf of the seller’s best interests only, not your best interests – there is no compelling reason to go it alone. Some REALTORS will ask you to sign a Buyer’s Representation Agreement. We won’t lock you in to working with us and therefore won’t require this form. Once a Purchase Contract is presented to a seller a document identifying, explaining, and defining Agency Representation will executed. We will then work hard on your behalf with only your best interest that we focus on.
- Determine your home-buying criteria and set up a Multiple Listing Service (MLS) search portal. We will set up an account for you directly within the Tucson Association of REALTORS MLS system. You will receive available (Active) properties for sale directly from our local MLS, as well as continuing daily updates based on your set criteria. No need to use any other online search that doesn’t update in real time.
- Tour properties. Prior to the advent of the Internet, we would spent hours in the car driving around visiting properties, many of which we nothing close to what you desired. The Internet facilitates – with property specifics, photos, neighborhood & school information, etc – narrowing down your search considerably, and greatly reduces wasted time in the car. Keep in mind that new to market listings that are appealing and priced right sell quickly. Years ago REALTORS selected homes for buyers to tour, and now the process in juxtaposed, whereby buyers typically identify the properties that have potential and then the agents set up the tours. The home preview process has become much more efficient for everyone.
- Write the offer. The nine page Residential Purchase Contract is the main document that will be present to the seller after we complete this offer document with you. Among the key points to discuss with the offer are:
a) Offer financial terms: Offer price, including proposed down, amount of earnest money, financing details (not applicable if cash).
b) Proposed closing date, Title/Escrow selection, home warranty purchase, special provisions (if any), expiration date for seller to accept offer/counter offer/reject, homeowners association transfer fees, etc.
6. Upon executed Purchase Contract (seller acceptance). Escrow is opened, which includes your earnest money check. The Inspection Period time period begins the day after the Contract acceptance; the default time period is 10 days. Your lender is re-engaged at this point and will furnish a Loan Status Update (LSU).
7. Inspection Period. This is the buyer’s due diligence period. Also, a buyer can cancel the Contract during this period for any reason and be refunded their earnest money. During the Inspection Period, the buyer is entitled to perform, at the buyer’s expense, any and all inspections they deem relevant. The Seller’s Property Disclosure Statement (“spuds”) document is reviewed and acknowledged by the buyer. Three inspections that are almost always completed are 1) physical Home Inspection 2) Termite Inspection, and 3) Roof inspections. There are other inspections, such as onsite waste water (septic) inspection, structural inspection, HVAC inspection, sewer line inspection, and others. Homeowners Association (HOA) documents, to include CC&Rs, and the insurance claims history report are also reviewed and acknowledged. By the end of this 10 day inspection period, the buyer completes the Buyers Inspection Notice and Sellers Response (“binser”), which essentially items any repairs that the buyer is asking the seller to remediate. Or the buyer has the option with this document to cancel the transaction or to accept the property in its present condition. The seller gets one shot at responding to the buyer’s repairs request, and the seller can either agree to fix the requested repair items, fix some of the repair items, or not fix anything. The buyer then gets the final word based on the seller’s response.
8. Appraisal. If the BINSR noted above is agreed to, then the lender will now order the Appraisal, which the buyer typically pays for. Appraisals can take anywhere from a week to two weeks to complete, and are also a contingency for the buyer (and for the seller is the Appraisal comes back at a lesser valuation then the Contract price).
9. Final processes to close escrow. The buyer will perform a final walk through, typically within a few days of escrow closing (change of possession) to verify the property condition and the seller repairs. Buyer will also arrange to have the utilities connected in their names. An estimated final Settlement Statement will be prepared by the Escrow Agent. The Lender will also prepare Closing Disclosure (similar to the estimated Settlement Statement) no less than three days prior to closing escrow.
10. Close of escrow. Final buyer and seller documents are typically signed at the Title Company the day prior to the actual close of escrow (which is also the official Recordation/change of possession. Congratulations! Now it’s time to get moving ~