A GUIDE for Home Search and Purchase for the FIRST TIME BUYER (I know, it looks a little wordy, but its jam packed with information!) The home search and purchase process is not complicated but it is involved and can be tiring, confusing, and often frustrating if not managed effectively. The following information and process will, if understood and committed to, help to make your home search and purchase a more pleasant and effective endeavor. - Partnering with a Realtor® and especially an Accredited Buyer Representative (ABR), will engage valuable resources, significant expertise and time saving services at no direct cost to the buyer. All Buyer Agent services are normally paid by the selling side of a purchase.
- It is important to select and counsel with your Realtor® before you begin your search.. This will help solidify your goals, wants and needs, as well as give your Realtor® valuable data to help determine your, search criteria, financing, and gain a better understanding of you and your family. Your Realtor® will lead your real estate team and will be able to assist you with finding the other team members, such as your financing partner, and home inspector, etc.
Be assured that all information you share with your Realtor® will be held completely confidential. Your Realtor® is governed by a strict code of ethics and is your personal representative and counsel as you search, select and close your real estate transaction. A simple written employment agreement between the buyer and Broker/Realtor® is required to ensure agency, mutual commitment, and outline the responsibilities for one of the most important purchases of your life. In Arizona, this agreement provides the legal basis for your Realtor® to carry out his/her fiduciary duties to you, the buyer. - NOTE: A financial analysis and counsel with your financing partner is required prior to viewing any properties as your financial requirements and limitations must be known to effectively select properties. A financing pre-qualification/approval (LSR) must be provided to your Realtor® by a lender before property tours begin or any offer can be placed on a property.
- Once you have counseled with your Realtor®, you will begin to search for your property in the MLS inventory and any private listings available. Based on your criteria, you will select properties to visit with your Realtor®..
- Your Realtor® will be your tour guide and counselor at all property showings and provide transportation at your option.
- If you choose to visit any open houses, for sale by owner properties or any other properties without your Realtor®, please inform him/her so you may be scheduled in advance. Please keep your Realtor®’s business cards handy at all times and provide to any other Realtor® or seller you may encounter. This will protect you and your Realtor® should you wish to pursue any property.
- A maximum of three to four properties should be visited at a time. More properties will tire and confuse you. Carefully select these properties with your Realtor® to meet your criteria as closely as possible.
- Bear in mind that a 24 hour notice may be required to view a property. This time is necessary to contact the selling Realtor®, arrange the showing time and date with the seller and coordinate the logistics of the showing.
- A written viewing analysis should be completed after each showing and a comparison and ranking completed at the end of the visits.
- If your criteria, needs and wants are well thought out, you should be ready to choose a property after viewing six-ten properties. If you are not ready at this time, your Realtor® will initiate a review session and adjust criteria for selection of future properties to visit. Your Realtor® will recycle this process and show you properties until you are comfortable making your selection.
- When you are ready to place an offer on a property, your Realtor® will prepare the offer, present it and negotiate it as your representative.
- Earnest money is usually required with each offer (a check). Usually this sum is from $500-1000. up to 5% of the purchase price. The greater the sum the stronger the offer. Your earnest money is generally not cashed until your offer is accepted. Earnest money becomes part (or all) of your down payment/closing costs, as appropriate.
- Once an offer is presented and accepted you have ten business days to review it and request any changes in the contract. You have the same ten business days to conduct a professional building inspection and any other inspections you desire. You should have a loan commitment from your financing partner within the next 30 days. It takes a minimum of 30 days from offer acceptance to closing. Longer if issues arise. Rarely shorter. The average time is 45 days.
- Your Realtor® facilitates the process from agreement to close, working with all parties involved to keep the process on track and moving to a close. Your Realtor® should be your first point of contact for information, issues or concerns and action as you move toward a closing.
- Your financing partner is the driving force in closing your purchase in a timely manner. Until you receive a clear to close from your finance partner, no closing can take place. As a buyer, you should be in close communication with your finance partner at all times.
- Once you have a “clear to close” your Realtor® and the seller’s Realtor® work with the title/escrow company to meet the closing date. Buyers and sellers generally close in escrow separately at "Document Signing", 2-3 days prior to the closing date.
- The escrow agent will conduct the closing process with you at the title company.
- Once closed you will receive the keys to your new home and you can arrange to “move in”! Your Realtor® will continue to assist you with arrangements settling in as needed.
Things that go “bump” in the night……. - A minimum of 3-3.5% down payment (FHA) is usually required and is deposited with your offer as earnest money or within 10-15 days of acceptance.
- Are you a citizen? A Resident? You must be to obtain financing, in most cases.
- Do you have a break in employment in the last five years?
- Is there a third party that will have decision powers in your home purchase?
- Are your credit cards maxed out?
- Do you have at least 3% of the purchase price available in cash for closing costs and pre-paid expenses?
- Are your current HOA assessments paid to date?
- Must you sell current real estate before buying new? Does your spouse or significant other want to do this?
- Don’t make any large purchases of any kind between offer acceptance and closing.
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