PHOENIX HOME BUYERS ESCROW GUIDE AND RESOURCE MAP
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GET HOME INSURANCE DURING THE INSPECTION PERIOD UNDERSTANDING THE LOAN PROCESS Every buyer will benefit from understanding your money and the loan process. This article tells you what you need to know about interest rates and help you understand the loan jargon and the loan options available to you. You will want to know mistakes to avoid when buying a home so your home purchase will close on time and be a positive experience. WANT TO KNOW WHAT ESCROW IS AND NORMAL BUYER CLOSING COSTS? Unless you buy homes often, the escrow process is bewildering. This document highlights the important phases within a Arizona residential escrow that transfers title out of the seller's name and into your name. Just because the buyer and seller have agreed to contract terms, you need to know what can go wrong at closing. Depending upon the home purchase loan type, Closing Costs are typically allocated between the buyer and seller as shown. If the buyer and seller want costs paid differently, this must be included in the purchase contract and negotiated and agreed to by both the buyer and seller. There are several ways to take title to Arizona real property and you don't have to be a lawyer to decide which way is best for you after reading this chart. How you take title determines who owns the property and the percentage of ownership held by each owner. In the event of sale or death, ownership is passed to the new owner and the amount of taxes owed are affected. Top 11 Home Buying Tips For Short Sales - A Guide To Understanding Short Sale Foreclosure Real Estate and how short sales generally work. 1) The short sale list price is usually set by the agent & seller, not the bank - though the bank has the final say. In many cases it's a "teaser price" to get an immediate offer to start the hardship approval process. Remember the sales price is subject to what the lender's investor will accept based upon a Broker Price Opinion (BPO) and or Appraisal. The list price and offer price are irrelevant if they are not close to current market value and what the lender BPO states is the value. 2) Homes financed with one loan usually has a better chance to sell than one with a first and second loan. 3) Lowball offers get slow or no response. A good listing agent will accept lowball offers as backup offers only and continue marketing the property to attract fair market value offers. 4) Your buyer's agent should calculate current market value using recent sales comparables to determine the lender's BPO value before writing and submitting your offer. You want to make sure you can afford what the lender will counter. 5) Buyers shouldn't "hang their hat" on one property. There are many reasons why a short sale is not acceptable to the lender, seller and/or the buyer. Keep your options open. 6) Sellers with strong financials may not have a hardship that qualifies for a short sale, may be asked to take back a personal note to repay part of the lender's loss or may be subject to a deficiency judgment. A foreclosure may be in the seller's best interests when they learn what their lender requires of them. 7) "Approved" short sales can close more quickly. The short sale has been approved and the bank has agreed to sell the property at the listed price. 8) Some banks want the strongest buyers, while others want the highest offers. 9) REO and Short Sale homes are sold "As Is" without repairs. The best plan is an FHA203K loan that allows the cost of repairs to be financed and done after the close of escrow. 10) Once approved, the escrow must close on time or there are daily penalties of $50 - $100 until escrow closes - no excuses for buyer delays. 11) Buyers must pay their own closing costs. The seller can not pay buyer closing costs and the bank will not either. HOME WARRANTY POLICY COVERS PROBLEMS THAT APPEAR IN THE FIRST YEAR A Home Warranty Service Contract will take care of many home problems that may arise in your first 12 months of home ownership for the nominal cost of a technician "call out" charge. For instance, an electrician can be called out to fix one or more electrical problems at once for a single call out charge (check the home warranty company contract for their charge). But if you have an electrical and plumbing problem, you will be charged two call out charges. Each home warranty company has similar, but not identical coverage, call out charges and cost of options can also vary dramatically. Home warranty of America provides one additional month or 13 months coverage. Take the time, choose your coverage carefully and ask me what to look for in coverage. HOMESTEAD PROTECTION IS AUTOMATIC - BUT WHAT IS IT? Arizona homestead protection of up to $150,000 of your equity is automatic when you own one home, but you will have to designate which property is your principle residence when you own more than one. Go to Arizona Homestead Law Summary and Statutes for the actual law and more information. Throw away offers you receive in the mail to file your homestead on your property. It's automatic! ADDITIONAL BUYER RESOURCES Learn about the Home Selection, Inspection and Repair process. Want help finding the ideal home? Define Your Dream Home For Sam and he'll find it for you. Before escrow closes, you have to arrange for electricity, gas, telephone, water sewer, cable, etc and this Phoenix Area Utility Services Directory has all of the utility contact information in one place for you. NEED HELP PLANNING YOUR MOVE? For assistance in helping your children to adjust to the idea of moving and planning your move, go to my Phoenix Area Guide - Planning your move or just call me for help. Now that wasn't so bad, was it? I hope the information was helpful. But feel free to ask me with any other questions you have that I haven't anticipate. Sam at 480-213-1799.
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