The "7 Phases of the Home Buying Process" Overview
Buying a home is one of the biggest investments you will ever make. Part of my job is to keep you informed of new listings and what's going on in the market, but even more importantly, my job is to guide you through the actual home buying process. I take my clients through the entire process, step by step, and make sure you are kept in "the loop" and feel comfortable with all the steps in the transaction.
"I Operate at a Higher Level of Customer Service and Client Satisfaction That Puts My Clients First."
By simply working closely with each and every client, like they were my only client, I am able to provide a superior client level experience and make the entire home buying process go as smoothly as possible and appear seamless - even easy, in today's world of otherwise complex real estate transactions.
Below, I have put together a quick overview of what you can expect in a typical real estate transaction from the buyers perspective. This, of course, is the short version and each step contains deeper levels and many variables, but will give you a pretty good idea of the process!
So let's get started!
Phase 1 - We've Made Contact!
- Initial consultation - Fortunately, how ever you found me, if you are reading this, you already have an AMAZING agent on your team, ME, and we will work together to establish your "wants & needs" list in a no-pressure, consultation style atmosphere. Remember, you don't pay me a dime to represent you!
- We will go over the home buying process together so you are part of, and have a basic understanding of the process and feel comfortable with it.
- Discuss my services and define agency relationships, how they are setup and how they protect you.
- Go over current market conditions so you understand what we are doing and why we're doing it.
Phase 2 - The Mortgage Lender
- Getting a loan - This is the step a lot of people get wrong. They start looking for homes first, and figure out what they can afford later. This can sometimes lead to disappointment and heartbreak when you discover you fell in love with a home you can't afford.
- The first thing you want to do is speak with a reputable mortgage lender that won't just tell you what you want to hear, but strategize with you to figure out what loan program would work best for your particular situation. This way we know what we can do... and what we can't do. I have worked with many lenders and banks over the years. Here are my recommendations.
- Show sellers you are serious - Get a pre-approval letter from the lender, not a pre-qualification letter. (While the lender will give us a general pre-approval letter for a certain max amount you can afford, we will typically have the lender write up a pre-approval letter to match any offers we make. This protects your position without showing our hand to the seller.)
Phase 3 - Let's Go Home Shopping
- Home Shopping! - This is the fun part right?
- We will tour homes that meet your initial search criteria. Although some agents will pressure you to "make a decision", I suggest taking your time and see a lot of inventory before making a purchase. Why? This leads to a very happy and satisfied client... and future referrals from you! ;-)
Phase 4 - The Offer and Negotiations
- Now that we've found the perfect home, it's time to craft our offer and negotiate price.
- I will pull comparable sold and active home data, the homes previous sales and loan history and any other type of clues that could help us learn about the seller's position and to see where the home fits into the market, price-wise.
- While your favorite part of the transaction is probably home shopping, my favorite part of the job is the negotiations! Part of my job is to get you the best deal on your new home, while the sellers agents job is to get their sellers the most money!
- Based on all the data available, we will craft an offer that is in the "range of negotiation", meaning it's not too low where they tell us to get lost or counter with a high price, and it's not too high allowing us to negotiate a fair price that makes everyone happy.
- Once we have strategized together and come up with a probable scenario and initial offer price, I will write up the AZ Purchase Contract.
- In addition to the purchase contract, there will also be various other disclosures and addendums that will typically accompany the contract. These can be the pre-approval letter from your lender, "Pool Addendum", "As-Is Addendum", "Agency Disclosures", a copy of the Earnest Check we will use to open escrow, etc.
- I will continue to negotiate on your behalf any counter offers.
- At this point - We will either come to a mutual agreement with the seller and have an executed contract, or both parties will walk away if we can not make a deal. No money is exchanged or risked at this stage.
Phase 5 - Honey, We Got The House!
- This is when it gets real - We have an accepted offer!
- I will open escrow and provide all title/escrow company information to you. (In AZ, we do not use lawyers and the title and escrow company is one in the same.)
- Upon contract execution, this will start our "Inspection Period". This is the time frame, typically 10-15 days, in which we will have to do all of our due-diligence, home inspections, etc.
- I will schedule and setup the home inspection. This is typically a same day turnaround. You do not need to be present.
- I will schedule and set up the termite inspection. Again, same day turnaround and you do not need to be present.
- I will pull all relevant permits to make sure any additions, patio enclosures or outbuildings are permitted, etc.
- The title company will pull a chain of title to make sure all liens on the property are cleared and paid in full so a clean title can be conveyed at close or escrow.
- Sellers will provide us with a copy of the SPDS (Seller's Property Disclosure Statement) to review and sign. Any questions or concerns are to be addressed within the buyer's inspection period.
- Sellers will provide us with a copy of their CLUE report - a insurance claims history while they have owned the home. This is for our records only, however, any questions about prior claims will have to be addressed within the buyer's inspection period.
- Complete BIN - Once we have completed all of our due-diligence, we will complete the "Buyers Inspection Notice" within the inspection period. We can A) Accept the property and move forward to close of escrow, B) Reject the property and cancel the contract or C) Provide the seller an opportunity to correct any disapproved items.
- If we choose "C" above, the seller will then also have an opportunity to either, A) Agrees to make corrections, B) Unwilling or unable to make corrections or C) Sellers "fill in the blank" response.
- Once the Buyers Inspection Notice is signed and agreed upon, the contract will move forward to close of escrow.
Phase 6 - Preparing to Close Escrow
- At this point in the transaction, we will be dealing with the lender a lot more.
- The lender will order and schedule the home appraisal.
- You will want to start shopping around for home owners insurance, as a policy will have to be in place at close of escrow.
- Provide the lender with all requested paperwork and documents in a timely manner as to keep our close of escrow date on track.
- Lender provides borrower and title company HUD1 and all good faith estimates and any disclosures to include in closing package.
- Once appraisal comes in and home meets value, file moves on to final underwriting approval.
- Once all underwriting conditions have been met, we will have funding approval and "clear to close"!
- We will schedule utilities to be transferred into your names about a week before close of escrow.
- A couple days before we close escrow, we will do a final walkthrough to make sure any requested repairs were completed and the overall condition is the same as when we first saw the home and made our initial offer. I usually take care of this on behalf of my buyers if they are out of town.
Phase 7 - Closing Escrow and Taking Ownership
- The lender sends the loan docs and closing package to the title company. You will either sign in person or in most cases, a mobile notary will be scheduled to meet you, wherever you are, and have you sign and notarize all the paperwork.
- We do NOT do roundtable closings in AZ and you do not have to be present to close escrow!
- Any down payment money is typically wired to escrow company at this time as well.
- When the closing package and loan docs have been signed and title/escrow has received the buyers bank wire, the file is sent off (usually electronically) to the county recorder's office and the deed of trust is recorded! This typically happens the same day.
- I am notified the the file has recorded and in Arizona, there are no waiting periods. The date of recording is the date of ownership and I can hand you the keys to your new home in Lake Havasu! Congratulations and welcome to the club!
Although it may seem like a lot of work, there is actually even more that goes on behind the scenes in a typical real estate transaction - because no two real estate transactions are ever the same. There are a LOT of different variables and scenarios that can take place - like contingent offers, contingent offers on other contingent offers, FHA, VA loans, gifted funds, LLC and corporate buyers and sellers, long escrows, homes for sale that have tenant rights, lease backs, 1031 exchanges... and on and on.
That's why I am here. I handle all the details from start to finish! That's my job.
Are you ready to get the process started? Just give me a call or text me at 928-846-6474 or you can start your search for homes in Lake Havasu!
Did You Get Some Value Out of This? Please Share Below!