The Home buying process in AZ is something many buyers want to find out more about. People from all over the country and international buyers mainly from Canada migrate to AZ and they are not familiar with how the home buying process works in AZ.

Buying a home can be a stressful time especially when you don’t know the steps involved. The procedures are different from State to State and even more so in international comparison.

In Arizona real real estate agents most commonly get paid by the seller. If a sale is a short sale, the seller’s lender typically pays the commission.

As a real estate agent I have a fiduciary duties towards my clients. I owe them loyalty, disclosure, obedience, confidentiality, reasonable care and diligence and accounting duties. The Arizona Buyer-Broker Agreement creates these duties for the agent and at the same time clarifies the basis for the real estate agent’s commission.  A buyer broker agreement is the standard form of the Arizona Association of realtors. The Agency Disclosure form proofs to the seller that the Realtor is authorized to negotiate the terms of a contract and speak on your behalf.

When you visit a new home community you need to bring your real estate agent to the model home center the first time you sign in. If you visit the models without representation, and later decide to buy a home there, you will likely not be able to have your representation get paid for by the seller /home-builder. In a new-home community the sales person is the agent for the seller! It is not the responsibility of the agent in the model home center to look out for your best interest. Remember, representation by an agent does not cost you a penny and you will not receive a better price if you don’t have an agent. The law does not allow that. Therefore, there is really no benefit in going there without representation.

The next step in the home buying process in AZ is that the buyer gets pre-qualified for a mortgage before touring homes. Cash buyers need a copy of their account statements showing the funds for the purchase. Realtors usually provide referrals for mortgage companies upon request. The mortgage officer will provide you with a pre-qualification form that says that you are able to receive financing based on the information you provided. You probably will have to send in your W2, tax return, and account statement to proof income and to show you have the funds for the down payment.  As a result of the pre-qualification you will learn 1. Your down payment and estimated closing costs  2. Your interest rate options and loan programs  3. How much home you can afford and 4. What your monthly payment will be.

You don’t necessarily need to go forward with a complete pre-qualification. You can get an opinion by providing your information verbally and then move forward with your documentation if you decide to do so.

There is a special loan program available in some rural areas of Arizona. The city of Maricopa, where I live and work, is one of those areas. We have almost “outgrown” this program but our city is still eligible. The USDA mortgage program offers 0 down with very reasonable credit requirements. There are certain requirements to qualify for this program for example it;s for primary residents only. A mortgage officer can help you with this. Buyers who live in Canada need to get financing in the US. Usually a down payment of 20-30% is required.

The next step in the home buying process in AZ is to look at properties that are available for sale. My clients receive information and photos about properties that are for sale and match their criteria. The information on internet search sites is often not current . Therefore when you are getting “serious” you better review the properties that are actually available to you for purchase. When you tell me which properties you would like to visit I will call the agent to make sure the seller hasn’t accepted an offer yet.

In this market we see many short sale properties. As much as possible I will evaluate the circumstances of a particular short sale and inform my client, for example has the bank approved a short sale before and the buyer cancelled? Is there 1 or 2 loans on the property? Is one of the loans a cash out? What about a hardship? There are a few indicators that point to what are the chances to get it approved and how long could it take. However, those are only indications and with short sales there are no predictions.

Before making an offer on a short sale the Realtor should do the comps and compare the price with similar properties that closed in the past 3 months. Eventually the lender will make the decision if the short sale gets approved and the seller’s lender will order an appraisal to determine the value. If you make a low ball offer chances are you will end up paying more or the deal will not be approved. As a general rule, if the buyer needs to move in at a certain time in the near future, a short sale is not the way to go. In that circumstance I recommend a traditional sale or a lender owned, Fannie Mae or HUD owned property.

When you found a home that you would like to write an offer on, we send a purchase contract with your signatures to the listing agent. An offer is typically written on a contract form from the Arizona Association of Realtors.

The title company opens escrow upon acceptance of the purchase contract. You will provide a check for the earnest money to the title company after the offer has been accepted and the title company opened escrow. With short sales sometimes the seller requests earnest money upon seller accepting the offer.  The buyer completes the loan process. An appraisal is ordered by the mortgage company. In the event of a low appraisal the buyer has the right to cancel the contract or renegotiate the price. During a 10 day inspection period the buyer has the opportunity to perform inspections. During this time the buyer can cancel the contract for any reason without loosing the earnest money deposit. The cost of an inspection is typically $250 to $400. The buyer has the right to demand repair of any problems discovered in the inspection. The Buyers Inspection Notice/Seller’s Response (BINSR) will be completed by your Realtor after you have discussed the inspection. However, in the distressed property market most lender owned and short sale properties are sold “as-is” and sellers will not agree to do repairs.

Within 5 days of contract acceptance the seller provides a Sellers Property and Disclosure Statement (SPDS). The seller fills out this form and answers questions about the property. The buyer has 5 days to review the document. When a lender owns a property usually SPDS will not be provided since the seller has never lived in the property.  Insurance Claims History (or C.L.U.E.) needs to be given to the Buyer within 5 days of contract acceptance. The buyer has 5 days to review this document. The buyer applies for Homeowners Insurance, approves or disapproves of the preliminary Title report and the HOA CC&Rs within 5 days of receipt. Buyers final walk-through should take place 1-2 days prior to the Close of Escrow date. Before the final walk-through all repairs a seller had agreed to need to be completed by this time.

At the Close of Escrow Date the title company will disperse the funds and record the new deed. The title company will inform buyer’s agent that recordation has taken place. Buyer’s agent will arrange for buyer to receive keys. The listing agent will order the sign on the property and the lock box to be removed. This is roughly how the home buying process in AZ works.

These are Arizona homes for sale:

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