Your Home Buying Process Checklist
Buying a home can be an exciting and overwhelming time, especially if it’s your first home. Because of this, it’s important to understand exactly what the home buying process consists of, so you can make the right decisions.
So, with that in mind, what is involved in the home buying process?
Note: this buying guide is specific to real estate practices in Arizona.
Read on as I list the 14 most important things you need to check off on your home buying process checklist.
Determine Your Budget
Before you start looking around for your perfect home, you first need to figure out exactly what you can afford.
You don’t want to go overboard and bite off more than you can chew, but you don’t need to go too low either.
The best way to do this is by looking at your income, expenses, and credit score to determine how much you feel comfortable paying for a monthly mortgage payment.
Get Pre-Approved
Once you’ve done this first step, the second step on the home buying checklist is to speak to a loan officer and get pre-qualified for a home loan.
Having worked in the Arizona housing market for many years, I know some great loan officers in the area if that’s relevant to you. Feel free to send me a message, and I’ll be happy to give you some names.
When working with a loan officer, they will ask for your personal information and financial documentation.
They will then use this information to tell you exactly what you qualify for and what sort of loan you can receive.
Find a Real Estate Agent
Many first-time home buyers in Arizona need to know this information before they proceed.
Finding a real estate agent isn’t just going for the first one you meet. You need to find one you feel comfortable with and who you can communicate effectively with.
Why?
Well, during the whole process, you need to make sure the agent can give you great advice and most importantly, get you through the entire process smoothly.
House Hunting With Your Real Estate Agent
Now you’re well on your way to getting your first home. One of the most exciting parts of this journey is house hunting.
Once you’ve got your criteria sorted, you can narrow down exactly what sort of house you want and start looking!
Making an Offer
Once you have found the perfect home, your real estate agent will write and send an offer!
If you have any questions at this stage, don’t be afraid to ask! You need to understand exactly what is going to be written in the offer, so it’s better to be safe than sorry.
Once your offer has been accepted, congrats! You are now officially under contract.
Deposit the Earnest Money
With an accepted offer, we need to open escrow. We open escrow by depositing the earnest money also known as good faith money.
The earnest money deposit depends on how much was negotiated in the purchase contract. This step is important to secure the contract and demonstrate to the sellers you are a serious buyer.
Due Diligence Period
During your due diligence period, you can do as many or as few home inspections as you wish. I recommend at the bare minimum scheduling a general home inspection to come out and take a look at the home.
Every transaction is different. There may be 0 inspections, or there may be 5. But why do you need a home inspector?
The home inspector will evaluate the condition of the home and let you know of issues that need addressing.
This is relevant for helping you later down the road, so you don't have any unexpected repairs or cost renovations when you eventually move in.
Obtaining a Home Appraisal
Assuming you're receiving a home loan, you will be required by your lender to get a formal appraisal. The appraiser will come to the house and determine a fair market value. Their report will inform if the home’s appraised value is higher or lower than the contracted purchase price.
Best case scenario: The appraised value is higher than the contracted price, you can go forward with the process and onto the negotiation stage.
If the appraised value is below the contracted price, your lender will only be able to finance up to the appraised value.
There are three options:
Option A: The sellers agree to lower the purchase price to match the fair market value,
Option B: You as the buyer make up the difference between the contract price and appraised value
Option C: You cancel the purchase contract.
Negotiations
After completing inspections and appraisals, it’s now time for the negotiation stage. If the home inspections didn’t go very well, and items need replacement or repairs, this could all be negotiated during this period. Or, as noted earlier, a low appraisal value can also be negotiated during this period.
However, if the inspection and appraisal stage did go well, then the negotiation phase will be very quick. If this is so, you can get started on the next step.
Underwriting and Final Loan Approval
All while we negotiate inspections or appraisals, your home loan is being sent to underwriting for the final approval stage. At this moment in time, it’s best to help out your loan officer as much as possible, whether it is answering any questions they have or signing/sending over documents they may need.
Apart from that, you don’t need to do much else. You can just kick back and relax as your loan officer team works to get the paperwork and final loan ready for the final sale.
Final Walkthrough
In the final walkthrough, you need to make sure the house is in the same condition as when you first walked through it and made the offer. This is extremely important, and I suggest you do not skip this.
Final signing appointment
At this point, it’s time for the final signing appointment. You will be going to the escrow office or through a mobile notary and signing all the final paperwork to finalize the purchase.
Sidenote: in the state of Arizona, buyers and sellers do not sign together, each party has their own signing appointments separate from each other.
Wiring Funds to Escrow Account
Around the signing appointment, you will be transferring closing funds to the escrow account (this includes things such as your closing costs and downpayment). Your loan officer will also be transferring your home loan into the escrow account.
The escrow team will work hard to ensure all the funds are in and all the paperwork is signed and ready for you to move in.
Recording
Finally, your closing officer will be sending all information to your county reporter's office. The county will issue a newly recorded deed on public record. After this is done, you will have officially closed, and your realtor will provide you with your home keys.
Start the Home Buying Process Today
This may be a simplified and Arizona-specific version, but if you want more detailed info, it’s always best to talk to your real estate agent.
All in all, I hope you enjoyed this guide! You can now get started on your journey through the process, whether you’re a first-time home buyer in Arizona or an experienced pro.
If you have questions for me, whether it’s about the home buying process or the Arizona real estate market, my team and I will be more than happy to help. Please contact us at, Realtor@StephanieHernandez.com
Or if you’re ready to for the next step & need professional services,
Schedule your free consultation today and let's build your perfect home together!
