The Process of Buying Home in Arizona – Step by Step
Buying a house is a big decision. There is a lot to consider. There are no real secrets for buying a home as much as there is advice. It is so important to get educated on the real estate process and industry. We are talking about one of the biggest investments of most people’s lives; a little time to empower yourself will go a very long way.
Below is a step by step guide to walk you through each step in the home buying process in Arizona. This guide should serve as a reference. However, don’t forget to ask your REALTOR® whenever you have questions. You will be guided by your REALTOR® through each step.
Determine How Much You Can Afford
The hardest part of the home-buying process is figuring out how much you can afford. When you buy a home, the amount you can spend depends on how much you have in cash to use for a down payment and how much you can borrow. Some first-time buyers rely on the amount the lender is willing to lend.
Before you meet with a lender to get mortgage prequalification, it’s a good idea to evaluate your personal financial situation and come up with a monthly payment range that you and your family can comfortably afford. You can use your current comfort level with your rent payment and look at your monthly income and expenses to estimate your own ideal mortgage payment. Don’t forget that when you become a homeowner your housing payment will include principal and interest, property taxes and homeowners’ insurance. If your down payment is less than 20 percent, you’ll need to pay mortgage insurance. In addition, you may need to budget to pay homeowner association dues.
Your Down Payment
The next step of the process is to determine how much cash you can put down on a home. Save as much as you can and make sure to set aside some money for appraisals, inspections, closing costs and moving expenses. If you can save enough to put 20 percent down, you will be much more attractive to lenders.
However, if you can’t save that much, don’t be discouraged. There are plenty of ways to buy a home with little to no down payment. However, your interest rates may be a little higher, and you will have to pay private mortgage insurance.
Putting the Data Together
Once you have an idea how much you are willing to pay each month and cash for down payment, look online for a good mortgage calculator. A good mortgage calculator will allow you to enter all of your data, including purchase price, interest rate, loan term, PMI rate, taxes and insurance.
Once you have a rough idea on price range you can start browsing online for best mortgage rate. You are about to begin your home owner journey.
Initial Meeting or Consultation
Working with a real estate agent who has your best interest at heart is very important. You need someone that you feel comfortable working with and who is going to work hard for you. After selecting your agent, you will want to schedule a sit down meeting.
You don’t want to skip this step. It will be virtually impossible to properly represent you without having actually sat down to discuss things, as they fit your unique situation. Discuss your situation and goals with the agent. Be sure to get a clear picture of what representation you will get such as buyer representation, seller representation and others. Each representation will have different role and responsibility in a real estate transaction. Once you have assessed your situation, this is where you will express your goals and determine an appropriate action plan so you can confidently move forward.
Your real estate agent will also help you to narrow down your need and want list. He/she may recommend lender to you based on your unique situation. Remember, not all lender are same.
Get Pre-Approved for a Loan
You want to sit down with your potential lender before you start shopping to purchase a house. Ask lender to analyze your entire financial history and abilities so that they can give you a tentative approval for a certain amount of money. They will present you with a letter that states how much money they are willing to commit to financing you for the purchase of a home. You don’t want to get your heart set on a house only to find out that you won’t be able to qualify for it. If you don’t have preferred lender, ask your Realtor. Your Realtor will be more happy to recommend lenders for you.
Determine your Housing Needs
After you been pre-approved for loan, you want to start to determine your want and need. Your home should fit the way you live or want to live. Space and features for the entire family should be considered. Make a list of your priorities. You’ll want to consider location as a priority although here you can make it to one side of town to the other in 30-40 minutes. Do you want to live near work? Should your home located inside particular school district? Do you want a pool? single story or two Story? HOA or no HOA?
Select a Home
Once you and your real estate agent finalized your need and want, your real estate agent will create a “search profile” or “listing alert”. You will receive email alert of all of the homes currently listed in the MLS (Multiple Listing Service) that match your search criteria and needs. You choose the homes that you like to tour in person. Many buyers also like to do “drive-bys” of the homes to determine if they like the neighborhood. From this list you will make arrangements with your Agent to view the homes.
Tour the Homes
Having compiled the list of homes you want to see in person, contact your Realtor® and arrange a time to view them. Every showing coordination and details will be handled by your realtor. You can take notes, photos or videos of the details to serve as a reminder since you will be viewing multiple homes same day.
This is where you really want to keep the goal you set during the initial meeting top of mind. It will make the buying process a whole lot easier, not to mention less stressful. During your showings, if you visit a property that isn’t inline with your goal, it is easy just to erase it from your mind. However, if it is inline, you can easily add it to your shortlist or even write an offer. Quickly identifying a property which is inline with your goal will save you the headache of viewing hundreds of homes and getting discouraged.
Making an offer
Once you had found the ideal and perfect house that will suit your needs, you are ready to make an offer. At this point, your real estate agent will provide comparable market analysis and assist you to determine a good offer price. Furthermore, factors that should guide you to determine a fair and strong offer are house location, price range and home style.
Negotiate the Terms of Transaction
After your Realtor presented your offer, you may likely receive a counter offer from the seller. Negotiate the contract terms such as closing date, deadlines for appraisal and inspection, seller concessions, repairs, and so on. As your real estate agent, I will guide you through the process. Be patient to go through variety of variables to negotiate on a sales contract because it is not easy to change things afterwards, once you are under contract.
Satisfy Contingencies
Once the offer is accepted, it is time to proceed with satisfying your conditions and contingencies. This process usually involves arranging and performing a home inspection, getting all your personal information and the property information to your lender and escrow. Conducting due diligence and research to gather whatever information is required and important to you, such as school information, crime rate and so on. As real estate professionals, we play a huge role in gathering this information and making the necessary arrangements to ensure the process continues to run smoothly.
Pre-Closing Walk Through
A pre-closing walk through or final walk through is different from all of the earlier showing. Pre-closing walk through is the buyer’s last chance to go through the house and make sure that it is in the condition that your contract specified. It allows to you make sure any requested repairs or changes have been made accordingly, and to make sure that the seller did not cause any additional damage when moving out.
Close on Your Home – Congratulations!
You will sign all the paper work and loan documents before the closing date. This is the day where transaction is complete and recorded. In Arizona, you can assume about 30 days to 45 days from escrow to close if you are getting a loan. In this state, you don’t get your keys until everything is signed and then recorded. Your agent will get you your keys once the home has recorded with the county.
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Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Chandler AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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All data relating to real estate for sale on this page comes from the Broker Reciprocity (BR) of the Multiple Listing Service, Inc. Detailed information about real estate listings held by brokerage firms other than Real Estate include the name of the listing broker. Neither the listing company nor Real Estate shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. The Broker providing this data believes it to be correct, but advises interested parties to confirm any item before relying on it in a purchase decision. Information contained herein is deemed reliable but not guaranteed.
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