This page will guide you through the 10 steps to buy a home in the Phoenix-Scottsdale area. We are referring to buying a resale home here, but buying a newly built home is similar. The differences are in steps 4-6. The builder will write the contract so there's no back & forth negotiation, and there is no inspection period. Everything else is pretty similar.
1. Get Pre-approved for Financing
Meeting with a good mortgage lender is the critical first step. You'll know what loan programs fit your needs, how much you comfortably afford, and how much cash you'll need for the down payment and closing costs. See our "Home Loans" tab for more detail on the process, loan types and some of our recommended lenders.
2. Meet Your Realtor for a Buyer Consultation
We'll dive deep into what you're looking for in your new house and neighborhood. Then we'll guide you to homes and areas that closely match your goals, location and budget. If possible we'll do this in one of our eight offices across the valley or online via a Zoom call so you can see what's available on our MLS (Multiple Listing Service) in real time as we fine-tune your search.
3. Set Up MLS Search and Tour Homes
Once your search has been set up, you'll get daily emails with new listings that are possible matches for you. You can tell us which you'd like to see or we can set up tours of homes we think you'll like. We'll set up showings and ask for your feedback at each home to get a better idea of exactly what you're looking for. We may tweak the search parameters based on your feedback.
In the age of COVID, many listings now include virtual tours so you can tour the property from the comfort of your home. For those that don't we can do previews on your behalf via video.
4. Craft and Negotiate Purchase Offer
When we find the home you want, we'll create a financial analysis. This will include neighborhood supply & demand and what similar homes have sold for. We want you to make an informed decision on what price to offer. If possible we'll also talk with the listing agent to understand the seller's motivation so our offer has a high probability of being accepted. And finally we will write up our offer with details like price, closing date, financing, and any terms & conditions we need (like selling your current house first) then submit it to the seller. They may accept it outright, or there may be some back and forth counter offers.
Virtually all resale home purchases will use the state-wide Arizona Association of Realtors purchase contract. This standardized form has the most common protections for buyer and seller already built in. New home builders will use their own customized contracts. We have the ability to do virtually all contracts electronically, and can set up a Zoom call to walk you through the contract details step-by-step if you'd like.
5. Offer Accepted, Open Escrow
Once we have an accepted offer, all contractual timelines begin and we'll guide you through each step. Arizona doesn't use attorneys for real estate transactions. Instead we have an independent 3rd party Title & Escrow Company that sits between buyer and seller. They hold all contracts and monies until the transaction closes, and ensure the contract is executed as written. To open escrow, you will deposit your Earnest Money (typically 1% of purchase price) with the Title Company to demonstrate you're a serious buyer. This money is not a separate fee, it will be applied toward your down payment and closing costs at the close of escrow. This deposit can be via a check or wired from your financial institution.
6. Inspection Period
We have 10 days from contract acceptance to do our home and termite inspection. We'll also do any other due diligence needed to be sure you're comfortable with what you're buying. We maintain a list of respected inspectors and contractors if you'd like recommendations. A home and termite inspection typically runs from $250 to $400 which you'll pay at the time of service.
At the end of the 10 day inspection period, we deliver a Buyer's Inspection Notice and Seller's Response (BINSR) to the seller. We will either (1) accept the property in its current condition, (2) cancel the contract and return your Earnest Money, or (3) list repairs we want the seller to make. If we ask for repairs, the seller has 5 days to agree to everything (which closes the inspection period) or respond with what they are willing to do. If we don't like their response we have 5 days to cancel the contract and get your Earnest Money back.
During this period you'll also receive a number of other disclosures which you can also choose to accept or reject. Once the inspection period is closed, you can no longer cancel the contract without risking loss of your Earnest Money. You do have two additional outs if this is a financed offer, however, see below.
If you're financing your purchase, your lender will order an appraisal. They want to make sure the property is worth at least as much as you've offered to pay for it. Cost varies by lender, and condos are higher because they also require a condo certification. $400 to $750 is typical, and your lender will collect this from you when they order the appraisal. We'll usually wait to order it until the inspection period is complete and know we're moving forward. If the appraisal comes back lower than what you've offered to pay, you have the right to cancel the contract and get your Earnest Money back. More commonly we will try to negotiate an equitable compromise with the seller first.
8. Loan Approval and Documents to Title
At least 3 days prior to Close of Escrow we expect to hear from your lender that your loan is approved. They've sent you final disclosures and all their paperwork is at the Title Company ready to be signed. This is the final milestone to buying your home. We strive to make your financing bullet-proof from the start, but on rare occasions something will be discovered during underwriting that causes a loan to be declined. In the unlikely event this happens, the contract is canceled and you get your Earnest Money back. Unfortunately you would lose what you paid for the inspections and appraisal.
9. Document Signing and Final Steps
Once the Title Company receives the lender's documents, they will generate a Settlement Statement that lists all the debits and credits for buyer & seller. It also shows the amount of cash you'll need to bring to signing, either as a certified check or funds wired from your bank. Next we'll set up an appointment to sign all documents at the title company a few days prior to the closing date, and we'll join you for that if possible. If you're out of town or would rather not sign in person, we can arrange for a mobile notary to meet you. Some Title & Escrow Companies also support Remote Online Notarization. Once signed, documents go back to the lender and they schedule the wiring of your loan funds to arrive on your closing date.
10. Closing & Recording
Even though you've signed everything, the house isn't yours just yet. On closing day, once the Title Company receives your loan funds they will release the file to the County Recorder's office. When we receive confirmation that the transaction has been recorded, the home is officially yours.
Congratulations, you're a new homeowner and here are your keys!