How to Purchase a Home in Arizona
In some states, using an attorney in a real estate transaction is common practice. In Arizona, most residential real estate transactions occur without attorney participation. The standard residential real estate contract used in Arizona is one designed by the Arizona Association of Realtors (AAR). Yet, if you intend to purchase a home without the assistance of a licensed Arizona real estate agent, you will need to use another contract, such as one provided by a local title company. Unfortunately, that contract does not provide as much protection for the buyer as the one by AAR.
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Instructions
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Contact a lender licensed in Arizona, to get qualified for a loan. Before you look for property, you need to know what you can afford and if you can qualify for a loan. When making a purchase offer, the seller will typically ask for proof of loan approval.
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Set money aside to use as the down payment and earnest deposit. After talking to a lender, you will have an idea how much money you will need for a down payment. Depending on the type of loan, you might need from 3 percent to 20 percent of the purchase price.
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Contact a licensed real estate agent in the area to show you property that meets your criteria. While you can navigate the process without an agent, unless you are only looking at “for sale by owner” properties, you will need an agent to gain access to most houses listed on the local multiple listing service (MLS). Rather than having the seller’s agent show you the property, get your own agent to represent your interests. Normally, there is no charge for this service.
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Select a title and escrow company to use in the transaction.
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Read the purchase contact to understand the terms expressed in the contract. If using an agent, he will provide the contract. If you aren’t using an agent, you will need to obtain a generic sales contract from the title and escrow company.
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Prepare to give an earnest deposit when making the offer. Typically, write the check to the title company. Depending on the terms of the contract, the deposit is subject to forfeiture when cancelling the purchase.
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Fill out the standard residential purchase contract when making an offer to the seller. When using a licensed agent, she will assist you in completing the form, and will deliver the offer to the seller’s agent.
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Deliver a completed contract (signed and dated by the buyers and sellers) to the escrow company, and open an escrow. Your agent will typically do this for you. You will receive an escrow number, and the name of an escrow officer, who will help you through the process.
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Arrange for inspections of the property by a licensed home inspector and termite inspector during the inspection period specified within the contract. The standard contract grants a 10-day inspection period.
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Check with your insurance company to verify the property is insurable, do this within the inspection period. The seller should present you with a Comprehensive Loss Underwriting Exchange (CLUE) report, which shows claims on the property, during the past five years.
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Request any repairs from the seller within the inspection period. Under the standard contract, if the sellers refuse to make repairs, the buyer has the option to withdraw the offer, if this option falls within the contract's inspection guidelines.
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Communicate regularly with your lender, escrow officer and real estate agent and deliver necessary documents to the appropriate party, as requested by the lender, escrow officer or agent. The escrow period might be 30 days or longer, depending on the purchase contract's conditions.
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Review the settlement, title and escrow papers received prior to signing any loan documents. These will typically come from the escrow company. If there are any issues with the property, they should show up in the title report.
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Transfer necessary down payment funds to the escrow company, as per the agreement of the sales contract and prepare to sign necessary documents, as requested by the lender and the title and escrow company.
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Tips & Warnings
During escrow, do not make any major purchases, such as a buying a car or furniture on credit, which may change your financial status and adversely affect your loan approval.
References
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