The Home Buying Process in 5 Easy Steps

Thinking of buying your first home in the Phoenix area? Here’s 5 easy steps to Buying a Home

Remember all the fun times you had while going to school? All the great friendships, picking teams in Phys ed class, your favorite teacher and the teacher you couldn’t stand? Remember all the scary coming of age stuff too? Your first crush?Your first date? Your first kiss? The butterflies in your stomach so many times for so many reasons? And how after you survived each experience it seamed not so bad after all?

Now, your all grown up. You listened to the advise of your elders. You established some credit and made sure you always paid on time. You have a job and saved some money or have a family member that is willing to give you money for a down payment. Now you’re thinking you want to buy your first home and begin building for the future. Are the butterflies back?

It’s easy to own and easy to qualify. The home buying process is fairly simple but there is a few things you need to know. Here’s how in 5 easy steps.

Step 1: Prequalify for a home loan

It really doesn’t matter what real estate market conditions exist when you begin the process. Unless you are paying cash sellers will require that you have at least had preliminary conversations with a mortgage lender. If the market’s hot you’ll have competition and a seller will automatically eliminate those unprepared. In a buyer’s market a seller is unlikely to accept an offer unless they know you can complete the sale for fear of missing out on a truly qualified buyer. Plus it can be very frustrating finding the home of your dreams only to find out you can’t afford or qualify for it. A knowledgable lender will know after only a few minutes whether you can qualify and for how much. The loan process will be ongoing throughout the transaction. Be sure to provide the lender with all documentation they request promptly. You don’t want to be the reason for costly delays at the end.

Step 2: Find a Home

Today 98% of people start their search on the internet. That’s pretty much everybody. While the internet is a great tool to look for a house it’s not necessarily the best way. The best deals and the cream puff properties always sell fast. Realtors generally get the information on newly listed homes at least several hours and sometimes several days before the information is available to the public online. You need an agent to unlock the doors to show you homes for sale and prepare your offer anyway so you may as well find one before you set out. You’ll be less likley to miss out on the perfect house if you pick your agent in advance. Did you know that with rare exception the seller will pay your agent for you? It’s true. You are very unlikely to pay any money to a Realtor when you buy. You’ll still be searching online and that’s good and it’s fun. Be smart and take advantage of the resources you have available to you.

Step 3: Make an Offer

Once you locate a home you want to buy your agent will prepare an offer to present to the seller. Your agent will know what information is required to prepare your offer. You decide how much you are willing to pay. An experienced agent can counsel with you on strategy to get the best deal. Be prepared to provide a check for a deposit known as earnest money. Your deposit will usually be refundable if the home doesn’t appraise or if you fail to qualify.

Step 4: Get the Home Inspected

You will normally have 10 days to perform any inspections you choose. It is a good idea to hire a professional home inspector to reveal and defects or problems that exist. You will also want to get a termite inspection. There are other types of inspections you may perform like a lead paint or mold inspection but those are most commonly only done when a problem is brought to light from the Home Inspector or there is reason to believe a problem exists. But you are entitled to perform any inspection you wish. Once the inspections are complete you will have 3 options: 1. accept the property as-is, 2. request the seller correct any items you disapprove, 3. Cancel the sale and get your deposit refunded. If you request items to be corrected there are time frames that apply for the seller to respond to your request. If you are unable to agree with the seller on repairs you can cancel and get a refund of your deposit.

Step 5: Close Escrow

When your loan is complete the lender will send documents to the closing agent for signatures. In Arizona we use Title Companies as closing agents. The title company will also prepare title transfer documents for you and the seller to sign. You will typically sign documents a day or two before the closing date known as Close of Escrow. You will usually take a cashiers check or arrange a wire transfer for the balance of your required closing funds to the title company. They will collect all monies including the loan proceeds and disperse as needed to the parties at close of escrow. They’ll disperse money to your insurance company, appraiser, termite inspector and the seller for any proceeds they have coming. They will also record all necessary documents with the county. Once the deed is recorded the deal is closed and you will be the proud owner of your new home!

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