Steps To Buying A Home In Arizona
You found the perfect agent, they did all the right steps into finding you the perfect home. The home evaluation by your buyers agent is complete, and you decide to put an offer on your dream home!
The excitement is a little overwhelming! As with any good agent, you understand the purchase contract, which in the state of Arizona is 9 pages long...did I say that correctly?
Yes, not to mention, additional documents; HOA addendum, a Buyer Broker agreement, a Buyers Advisory, A Real Estate Agency Disclosure, (and we are just getting started)! Thank Goodness you found a seasoned, competent agent! So many forms, and after a counter or two from the seller, all parties come to an agreed contract price; executed, you are finally ready to open Escrow.
What is Escrow; let me state it in a simple way. Many states have an attorney, Arizona works with Title Companies. Once the contracted is executed, delivery and transfer of the escrowed funds and documents takes place. Your escrow officer acts as a fiduciary party; retains documents entrusted assets until specified conditions are full-filled. The escrow officer is a third party and impartial to both parties of the transaction, and acts according to the escrow instructions given by both. PLEASE note, that the escrow officer does not advise, they merely take directions from both parties to the contract and act on them in a confidential manner. A good buyer agent will review your title report. A seasoned escrow officer is able to answer and explain all your paperwork at the time of closing escrow. This is completed after inspections, appraisal, and full lender approval is executed.
Seller Disclosures and Inspections
After Escrow has been opened, a buyer agent requests a "Seller Disclosure." The Seller Disclosure consists of 7 pages, which the seller discloses ANY MATERIAL fact about the property. This can include or exclude any information, even if not asked by the buyer agent, or buyer(s). As Stated on the Seller Disclosure; "The SPDS is designed to assist you, the seller, in making these legally required disclosures and to avoid inadvertent nondisclosures of material facts. To satisfy your disclosure obligations and protect yourself against alleged nondisclosure, you should complete the SPDS by answering all questions as truthfully and as thoroughly as possible. Attach copies of any available invoices, warranties, inspection reports, and leases, to insure that you are disclosing accurate information. Use the blank lines to explain your answers. If you do not have the personal knowledge to answer a question, it is important not to guess ‚Äď use the blank lines to explain the situation." Once your buyer agent reviews, and ensures that the Seller Disclosure is fully completed by the seller, the buyer initials, signs, and dates the document. The next step;
As a buyer, you have a right to have your future home inspected. The buyer can choose anyone to inspect the home, as well as to hire any termite company of their choosing. I always recommend my inspector; with over 20 years of compiling inspection reports, he also is certified in termite inspections. As stated earlier, this is only a recommendation; remember as a buyer, you have every right to choose any inspector of your liking. A good agent, and by law; will accompany you along to your home inspection. I always meet my inspector at the end of his inspection with my buyers; this gives him the hours to focus to his duties, without distractions. We we speak with the inspector, he reviews the inspection report with my clients, walks us through the home to show any concerns he may have, and answers any questions my clients may have. (Note; every inspector is different, and their level of experience is pertinent to the quality of you inspection report).
Once the inspection is completed, your agent can request for repairs from the seller. The seller may do all, or none of the repairs. The inspection form is called, "Residential Buyer's Inspection Notice and Seller's Response" which is also nicked-named, the "BINSER". Please note that if a home is listed as, "AS-IS" that the seller will not pay for any repairs on the home. The buyer may still conduct a inspection, but acknowledges that the seller will not make repairs. PLEASE NOTE, that the buyer can elect to cancel the contract during the INSPECTION PERIOD.
A good buyer agent, will ensure any major repair issues are completed prior to having a appraiser view the property. If a appraiser goes to the property prior, they may see things, that they will request to be repaired, then request to come back to evaluate the property. The issue with this is time, and money. It costs the buyer an extra 150.00+ (depending on the particular appraiser; which is randomly assigned), to come back to the property to do their evaluation.
Property Values vary based off location, market conditions, the condition of the home, the neighborhood, and the age of the home.
Please note, that selecting a competent buyer agent is essential in this area. Remember at the beginning of the article, a good buyer agent conducts a thorough home evaluation. I always conduct mine similar to an appraiser, and unlike most agents, run a manual evaluation, instead of a automated evaluation. Accuracy is imperative, as being as close to market value, will save you time if a appraisal does not come in at value.
If an appraisal comes in below market value, the buyer may do the following;
Negotiate with the Seller
Pay the difference from the contracted price to appraisal price
Cancel the Contract
Finally, Closing Time!
The appraisal is completed, and came in at value! Almost to the finish line.
The next step, the buyer agent conducts a final walk-thru with the buyers to ensure that the home is in the same condition as it was at the time of executing the purchase contract.
In the last week, the lender sends all the documents to title; every buyer has a 3 day right of rescission. This is a RIGHT, under the American Federal Law set for my TILA (TRUTH IN LENDING ACT), that gives you the right to cancel a home loan with a new lender within 3 days of closing. Once the 3 days pass, the buyer goes to title to sign. I always schedule closings on a Monday or Tuesday, just to ensure that we have plenty of time to close within that week, incase any delays should incur.
If a buyer signs early in the day, and contingent of the lender funding that day, recording usually takes place prior to 5 p.m. At this time, the buyer agent coordinates with the listing agent to attain the keys.
IF you have any questions about buying or selling, please don't hesitate to contact me.
Author: Joshua Smith
October 21st 2016
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