Your Step-by-Step Guide to Buying a Home
The home buying process involves a number of different steps which can be simple or complicated depending on your knowledge of how each step works. Below we will outline for you, each of those steps and give some details about each so that you can be better prepared when the time comes for you to begin your home buying journey.
Step 1 - Determine Your Timeframe:
1-Year or More - If your plans to purchase your new home are a year or more in the future, the best first step will be to start educating yourself about what homes in the area you're looking to buy sell for, how quickly they sell and what features and amenities will come with homes at different price points. Keep an eye on these trends up until closer to the time you plan to buy so when the time comes, you'll already have a great feel for what you can expect to find within the price range you will be targeting.
6 Months to 1 Year - If you're looking to buy within less than 1 year, we recommend taking the advice above to educate yourself about the local housing market, but it's also highly recommended that you speak with a mortgage lender to determine if you will need to work on your credit rating, pay off any debts, or take any other actions that could put you in a better position to buy when the time comes. Many buyer avoid this step until closer to their ideal purchase date only to find out that they will need another 6 months to increase their credit score or pay down debts to qualify for the financing that is most beneficial for their needs.
3 to 6 Months - Once you're within the 3-6 month timeframe, you will want to start getting serious about the following steps on this list, especially if what you will be searching for is very specific or will yield a low number of options based on the features that are must-haves on your list of criteria.
Step 2 - Schedule a Time to Meet With Your Agent:
Once you have selected your real estate agent, you will want to set up a time to sit down and discuss your goals for your new purchase plans. This will give your agent the opportunity to ask you questions which will allow him or her to better serve you and your needs as you begin the home search and buying journey. If you hire our team to help you with this process there will be no charge for your initial consultation or any other additional fees or commissions due from you for allowing us to advise you throughout the process. We will also help get you set up with a highly successful lender who can help you with the next step listed below.
Step 3 - Get Pre-Qualified for Your Financing:
If you plan on using financing to cover all or a portion of the cost of your new home you will need to get pre-qualified with a mortgage lender prior to making an offer on a home. All offers made on the standard AAR Purchase Contract require that a pre-qualification letter accompany all financed offers. For making the strongest offers possible, you will want to make sure that your pre-qualification letter is written on the standard AAR Pre-Qualification Form once the lender has run your credit and requested and reviewed your supporting documentation (i.e. - W-2's, Paystubs, Tax Returns, Cash Reserves, etc.). If a lender provides you with a different form with their letterhead at the top, we will want to ask them to fill out the AAR form as well as the AAR form provide more information to seller's and their agents as to what steps have been taken by the lender to verify your ability to obtain your financing with the lowest possibility of issues arising down the road.
Step 4 - Start Shopping and Make an Offer:
Once your agent knows the details of what you're looking for and you have you financing lined up, you are ready to get out and start looking at homes. Your agent should be able to provide you with lists of homes meeting your criteria along with photos from which you will be able to select which homes you will want to schedule to view in person. Because some agents will pick the homes for their clients, if you find that the homes you are seeing are not meeting the criteria you set up from the start or have updated since, be sure to make your agent aware of this to avoid wasting time seeing homes that aren't going to be the best fit for your needs. Once you find the perfect home, you'll want to advise your agent to begin the process of writing up an offer. Different agents will go about this process in slightly different ways, but in all cases, your agent should be able to help you with determining what price you will want to go in at to start the negotiations so be sure to request this advice from your agent if he or she doesn't offer it on their own. Another tip is to have your agent contact the listing agent to get a feel for what the seller's motivation is as well as to find out if there are presently any other offers on the property that would be competition for your offer before sending yours in.
Step 5 - Home Inspections:
Once a seller has accepted your offer, you will have the following 10 days to complete any form of inspection(s) on the home you choose. The most common type of inspection is a general home inspection by a licensed home inspector. The earlier you can schedule your inspection(s) the better in case it is discovered that further evaluations are needed by a specialist to further determine the condition and cost of repairs for any specific areas of the home (i.e. - HVAC, Roofing, Electrical, Plumbing, etc.). Once inspections have been completed you will have the opportunity to request any repairs or credits from the seller and they will have 5 days to respond to your requests by either agreeing to them or declining them. If they accept all of your requests, they you will continue moving forward. If they don't agree to some or all of your requests, you will have 5 days to respond to the seller with whether you would like to proceed with the purchase, or if you would like to cancel the contract entirely.
Step 6 - Appraisal:
If you are using financing for your purchase, your lender will require an appraisal of the property to ensure that the property's value is equal or higher than the agreed upon purchase price of your offer. If the appraisal comes in at or above the purchase price, you will continue moving forward with the purchase. If (in the appraiser's opinion) the home is not worth the amount of the purchase price the lender will not loan on the property unless you are able/willing to bring the difference to closing or the seller is willing to drop the price to the appraised value (or a combination of the two). If an agreement can't be reached then you will need to cancel the contract within 5 days to receive a full refund of your earnest deposit.
Step 7 - Final Loan Approval:
Once you are through the appraisal stage there will likely be a few more pieces of information your lender will request from you before your loan is fully approved and you are ready to close.
Step 8 - Sign Your Closing Documents:
Once your loan has been fully approved, the lender will send loan documents to the title company who will put together all of the documentation you will need to sign to close on the sale of your home. Keep in mind, because Arizona uses title companies, not attorneys for real estate transactions, you do not get the keys and own the home immediately after you have finished signing. For this reason, the title company will usually schedule your signing for 1-3 days before your scheduled closing date.
Step 9 - Record the Deed:
After you sign you closing paperwork, the title company will send your signed loan documents back to the lender for approval. Once approved, the lender will release the funds for your loan to the title company who will then release the deed to record with the County Recorder's Office. Once recording takes place, your agent will be able to get you your keys and you will be ready to move in to your new home!
Contact us today to get started on your Phoenix area home search!