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I understand that buying a home is one of the most important personal and financial decisions that you will make in your life. That is why my job as your Realtor is so important to me. I value your trust and will answer all your questions and do all I can to ensure that your home buying experience will be as pleasant and successful as possible. On this page you will find information that will help you to better understand what’s involved in purchasing a home.
Preparing To Buy
Congratulations on your decision to become a homeowner! The best way to approach home ownership is to become an educated consumer. For example: many people believe that it is cheaper to rent than to buy, or that you must have a huge down payment to buy a home. The reality is that starter costs of renting may be almost as much as closing costs!
During our first meeting I will talk with you about the neighborhood where you want to live and the prices of the homes, as well as your commute to work, schools and surrounding areas. I will also talk with you about the process of applying for a loan. The first step in applying for a loan is obtaining a mortgage pre-approval. In Arizona this is called an LSR or Loan Status Report and must accompany your offer to purchase. It is helpful to get this pre-approval before shopping for your home because you will know the amount of money you will have to spend, and it will be easier to calculate what you can afford to pay monthly.
Your Credit
Having an established credit history will help you to obtain the loan for your home. A good credit history is important for getting a loan with a low interest rate. Establish a good credit history by paying for your bills on time, limiting your indebtedness, keeping your use of credit cards to just a few, and using them responsibly. Your credit history is what gives a lender confidence in your ability to pay your mortgage. The better your credit history, the better your credit score; and this may translate into more mortgage options for you.
Mortgage Pre-approval
A pre-approval is a simple calculation that tells you the amount you’ll be able to finance and what your monthly payment will be. A pre-approval also provides the Seller some confidence that you have the financial means to purchase their home.
The Offer
When we find the home you want we will need to make an offer in writing.
This is the first step toward negotiating a sales contract with the Seller and involves much more than simply determining the price. Some of the things specified in the purchase contract are:
- How you intend to finance the home,
- Amount of the down payment, if any.
- Who will pay the closing costs.
- The amount of your earnest deposit and who holds these funds.
- How the earnest deposit will be used at closing.
- The time period during which inspections will be performed.
- Whether personal property is included in the sale.
- Terms of cancellation.
- Date of the closing.
- Which title agency will handle the transfer of title, issue title insurance and handle the signing of all the closing documents.
- Date you will take possession of the property.
- How to settle disputes should they occur.
- Any contingencies.
- How long the Seller has to make a response before the offer is considered withdrawn.
Once we have submitted your offer, we must wait for the response of the Seller. The Seller could accept, reject, ignore or think about your offer. Often, the Seller will counter your offer requesting a higher sale price or different terms. This begins the process of price and term negotiation that may continue until both parties either agree to price and terms or decide to go there separate ways. This is where negotiation skills and people skills are crucial.
The Earnest Deposit
Along with your offer you must provide the amount of your “earnest deposit” that is designed to, among other things, demonstrate to the Seller the seriousness (or earnestness, hence the name) of your offer. This money is only deposited (with the title agency) once the offer has been negotiated and accepted by both you and the Seller. This money may be applied toward down payment or closing costs at close of escrow.
The Inspection Period
Now begins the inspection period. As outlined by the contract you will have a definite number of days to perform your inspections of the property. A termite inspection is usually required by the Lender, and you will need to choose a home inspector who will inspect all the systems of the home and the soundness of the home. Your inspector will create a report of all findings and will usually discuss any aspects of the property that may be of concern and may need to be repaired or corrected before close of escrow. At this point, if any issues of significance have been discovered we may need to do some more negotiating with the Seller. There is a specific amount of time during which these negotiations may take place.
The Final Walk-through
Before close of escrow takes place we may visit your future home. The final walk-through provides an opportunity to ensure that the home is being left in the expected condition.
Closing Day
You will have an appointment with a title agent at your chosen title company to sign all the documents to transfer title. I can, and often do, accompany my buyers to this important event. Actual transfer of the property usually takes place 24 to 48 hours after this signing, when your lender has funded your loan and the state has recorded the transfer of title from the Seller to you.
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