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  Serving North Scottsdale, Cave Creek, North Phoenix, Rio Verde Foothills. Luxury, Golf Course, Homes, Land, Lots, Horse Property.

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Buying |Home |House |Horse |Luxury |Real Estate |Scottsdale |AZ

Buying |Home |House |Horse |Luxury |Real Estate |Scottsdale |AZ.  There are several steps involved in buying a home in Scottsdale Arizona.

The first major step in buying a home in Arizona is to go through a “Prequalification” Process.  Your Realtor can provide you with names of Mortgage Brokers they have had good experiences with. Locating a reputable mortgage broker is not difficult.  There are many in Arizona that are licensed to broker loans.

The process is relatively simple and the mortgage broker will need to know some relative things about your income and expenses.  Be prepared to provide the following to a mortgage broker:

• Income with supporting W-2 statements as well as your last 2 paycheck stubs from your employer.
• Any additional repetitive sources of income such as Pensions
• Expenses Including:
• Home Mortgages
• Credit Card Balances and Statements
• Car Loans
• Child Support
• Bank loans

Based upon this information as well as a Credit Check resulting in scores, the mortgage broker will determine what loan amount or mortgage you can qualify for. If you are self-employed the process becomes a bit more intensive with verification of income and expenses via Federal Tax Returns and year to date income.

Finding the Right Property without PAIN and STRESS

Now that we have a loan amount that you can qualify for think about the amount of cash you want to invest into a suitable property.  It is apparent that even though you may qualify for a $500,000 Home Loan if you have the available cash on hand, say $300,000, you are prequalified to enter into a purchase contract for an $800,000 property.

In your search for the right property know that the real estate market in the North Scottsdale, Cave Creek, Carefree, Arizona area covers a lot of ground.  You have the availability to purchase; Golf Course Property, Horse Property, Gated Subdivision Property, Townhomes, Condominiums and Acreage Home Tracts with any number of variations of each type of property.

Determine the Home Buying Search Parameters

Determine your parameters first, then find the property.  We have already determined our price limit by adding the loan amount to the available cash for a down payment.  Now consider the  bedroom/bath mix of your property.

Bedroom |Bath

Ask yourself the question, how many bedrooms and baths do I need?  Do you have children?  Do you have an in-law or a parent reaching an age that you may have to take care of them?….and in determining what bedroom|bath mixture you need then give some thought to the square footage.

Square Footage

Square footage of your home will be determined by average price per square foot of a given area or subdivision, subject to the finishes and amenities of the home.  A home with marble floors, granite counter tops, commercial style kitchen, pool, spa…etc., will sell for a higher price per square foot than a home without the same amenities.

Location |Location |Location

Consider the optimum location as it relates to your lifestyle.  Are you a golfer or tennis player?  If so, you might want to be in a Golf Course Community and/or Tennis Community.

Do you have children?  If so, look into the schools, determine what schools you think your children should attend.  There are many sources of information online to research local schools.  A fabulous online search tool is GREAT SCHOOLS.  Great Schools will compare local schools nationally to help your home buying decision-making process.

Do you work?  What is the maximum amount of time you want to spend driving to and from work?  If so, determine that amount of time as a sorting out process for determining what home buying areas appeal to you.

Is yours or someone in your family’s health an issue that would require proximity to medical services?  If so, determine the maximum distance to health care that would be satisfactory to you.

Would you consider dirt roads?  Many of the areas of Cave Creek, North Scottsdale, Rio Verde Foothills, North Phoenix and Carefree have dirt roads that access primarily, the small acreage tracts.  Many of these rural areas also allow horses to be kept on the property.

Search the MLS Like a Realtor

As a Realtor, I love to work with Home Buyer’s that have created a “Wish List” and narrowed the parameters down to fairly specific needs.  One of the most frustrating moments is when the home buyers begin to confuse properties after they have seen too many.  It’s not a function of  being lazy, it is a function of home buyer confusion when properties start to blend together.

You, as a buyer, have at your fingertips,  as much GENERAL information about the home market as we do.  My personal website that you are now on, Jeff McDowell.ME has over 1,000 constructed  Real Estate Search Links for Specific Real Estate Properties inclusive of  all residential areas of North Scottsdale, Cave Creek, Carefree, Rio Verde, and North Phoenix, Arizona, as well as Horse Property, Million Dollar Luxury Homes, Mansions, Raw Land, Lots and Commercial Real Estate in the Phoenix Metroplex.

If your Realtor can’t provide you with links to real estate properties or “portals” for you to perform your own searches then you need a different Realtor.

Spend time searching the available homes for sale through a Realtor’s provided links or portal.  You may even modify your search parameters to include or exclude a feature or features that you originally thought were important.

HOA’s

Pay particular attention to whether or not properties you identify are within an HOA or more than one HOA.

In larger “Master Planned Communities” there may be a “Common Area HOA” and a “Community HOA” for the developments within the Master Planned Community.  So, you may have a monthly, quarterly, or annual HOA fee for  the common area that the entire Master Planned Community and a similar fee for the “Community HOA” where the home actually is located.

The “Common Area HOA” will be involved with ongoing maintenance, care and support of the landscaping, streets, lighting, etc. that all owners within the subdivision enjoy while the “Community HOA” will be  a similar type of entity that handles the specific area within the subdivision community that the home is in.

These HOA’s are turned over to the homeowner’s for their administration when the subdivision reaches a certain percentage of sales.  The homeowner’s then oversee the administration of the HOA but typically sub contract out the daily administration of the HOA as well as collections of fees.

One thing to clearly note is that each HOA can be different as to the ability to assess capital improvement fees and change monthly, quarterly or annual fees.  Some have limits on annual increases, some do not.

Also, be aware that many of the streets within the subdivision are privately owned and not municipality maintained.  As streets age they require resurfacing or reconstruction.  While most HOA’s will budget for this in a reserve account, pay particular attention to their projections on maintenance items such as this and how they handle the budgeting.

Also, pay particular attention to how they  can assess “Special Assessments” and assessments for “Capital Improvements“.  All of this can be found in the Homeowner’s Association Documents.

The Purchase Offer Process

Being a Licensed Real Estate Broker in two states, Arizona and Texas, many times I have to remind myself where I am as the laws and process is similar, but not identical.

Since you and your Realtor have gone through a lengthy pre-purchase process, I am making the assumption that your Realtor knows the comparables within the area and knows what pricing homes will appraise for when that process becomes involved.  If that is not thought through carefully there will be a “bump in the road” later after you have the property under contract.

The Arizona Purchase Contract is an agreement where you, the “buyer”  offer to the “seller”, the conditions and terms that you will purchase the property.  The Arizona Purchase Contract purchase  will recite how much you will purchase the property for, down payment, how much of the purchase price will be financed, the amount of earnest money you will place with an escrow company, and the time frame that you will purchase the property within.  Of course, there are and may be,  many more specific items contained in the Purchase Contract specific to the property or to features of the property that will be addressed in the Purchase Contract or Addendums added to the Purchase Contract.

Let’s assume that the Seller accepts the Arizona Purchase Contract you have offered….now the clock begins to tick.

Under Contract Timelines

Within the Arizona Purchase Contract there are dates that are very significant to the process.  Unless something is added to the contrary, the first significant date is the “Inspection Period“.  The unaltered “Inspection Period” is 10 days unless otherwise noted by adding a different time period.

During the inspection period of an Arizona Residential Real Estate Purchase Contract the buyer has 10 days from the date of the contract (the date the last party signs the contract) to inspect the premises by all means determined by the buyer.

Negotiating Repairs

At this point, if the buyer, in the buyer’s sole discretion determines that:  1) the property is not suitable for his/hers intended use they may cancel the contract and their earnest money refunded to them;  2) accept the property, subject to the seller completing repairs that the buyer determines are necessary for his/her satisfaction; 3) accept the property in its current condition.  A buyer may also elect to renegotiate the purchase price of the property with the seller, subject to the seller’s acceptance of the altered purchase price.  In this situation the buyer may offer a lower price accepting the condition of the property or lower the price and ask for the seller to make partial repairs.

Sellers Property Disclosure Statement (SPDS)

Within 5 days of acceptance of the Arizona Purchase Contract by all parties, the seller is to provide a Seller Property Disclosure Statement also known as a “SPDS” to the buyer.  The SPDS is a 6 page document filled in by the seller of the property reflecting pertinent things about the property such as: Legal Ownership; Year Built;  Associations or HOA’s affecting the property; Liens; Assessments; Access Issues or Easements; Homeowner’s Insurance Claims on the property; Structural Problems; Roof Leaks; Previous Damage to the Property; Termites, Insects, or Pests; HVAC Systems and/or problems; Plumbing components including the Water Heater and any problems, past or present; Pool or Spa information and/or problems, past or present; Electrical System, problems past or present; Remodeling or additions to the home; Utility Providers; Environmental issues inclusive of flooding;  and Sewer information.

The SPDS is intended to be provided during the Inspection Period for the purpose of the buyer to be aware of any items the Property Inspector may not find during the inspection.

Care of the Property Post Inspection Period

The Seller has a duty to maintain the property during the “Under Contract Period” and make any repairs to the property or systems that occur after the “Inspection Period”.

So now that we are still “under contract”, assuming that the results of the “Inspection” have been worked out we now move towards the “Close of Escrow” or COE.

Financing

As we have determined the purchase of the property is subject to “Financing”, the lender has requested further information about the “Purchaser”  and his/her/their financial condition, as we say, “drilling down” to confirm the information provided in in the “PreQualification Form“.  While the inspection period is going on the Lender is requesting further information from the Purchaser such as 2 years of Federal Tax Returns and by this time has run a “Credit Check” to determine the payment history of the Purchaser, outstanding judgements (hopefully none), past “Short Sales” or “Foreclosures”…and again, hopefully none.  Assuming the Lender is comfortable with the information provided to date they will order an “Appraisal“

Appraisal

The Mortgage Broker will submit a request to multiple approved “Appraiser’s” to appraise the property.  An Arizona Real Estate Appraiser is licensed by the State of Arizona and is held to Uniform Appraisal Standards.  A Licensed Real Estate Sales Person or Broker is not an “Appraiser” by definition but can perform a “Brokers Price Opinion of Value” or BPO.  Your Realtor is competent to provide an “Opinion of Value” but this is not acceptable to a Lender in the loan process.

The Appraiser will physically inspect the property and on the basis of Uniform Practices and provide a narrative of their valuation of the property based upon market sales comparables.  They will report on the physical condition of the property, the neighborhood, access, any encumbering features of the property and compare the property  to 3 comparable sales that have occurred within 3 months, if possible, and within close proximity to the property.  Adjustments can be made to the comparable property sales based upon amenities or physical features to bring the properties to a comparable state.  An example of this may be that a comparable has a pool and the subject property does not.  The sales price of the comparable sale would be adjusted downward to reflect the fact that the subject property does not have a pool.

The Appraiser will provide his/her report to the Mortgage Broker for their inclusion into the “Loan Package”.  If the appraisal is equal to or higher than the Purchase Contract, no problems.   If the appraisal is less than the Purchase Contract Price, a new negotiation or cancellation of the Purchase Contract may come about.

In the situation where the appraisal is less than the Purchase Contract amount, the buyer and seller have 3 options;  1) Cancel the Purchase Contract and the Earnest Money returned to the Buyer; 2) Lower or amend the Purchase Contract to reflect a sales price at the appraised amount, with additional adjustments to the down payment and loan amount; 3)  The buyer may elect to add the difference between the Purchase Contract Price and the appraised price to the closing in cash.

The clause in the Purchase Contract that deals with this is below:

Title Commitment

Assuming we have gotten this far, the inspections are out of the way, the appraisal was satisfactory and the loan is proceeding, we are down to the last item that can cancel the sale, clear title. During the  entire process the Title Company will research title and present to the buyer and sell a “Preliminary Title Report“.

The Preliminary Title Report will have important sections relating to who the title company is, what they insure and the 3 most important sections;  Schedule “A”, Schedule “B” and  “Requirements”….in some states this is referred to as “Schedule C”. Schedule “A” outlines the date of the commitment, the amount of the “Title Policy“, the name of the buyers as well as the lender, if a lender is involved, the name of the seller, and the legal description.

Below is an example.

Schedule “B”

Schedule “B” of the Title Commitment deals with the conditions by which the insuring Title Company will issue a Title Policy.  Each exception of this page must be met for a Title Policy to be issued.  In this case the Title Company is requiring; property taxes to be paid and current, any fees due to the Home Owners Association, any fees due to a water district by virtue of the property being located within the water district, and conveyance excepting items contained in a filed map of the subdivision as it relates to easements, restrictions, reservations, setbacks as well as covenants, conditions, and restrictions filed, water rights not filed of record.

Schedule “C” or “Requirements”

Schedule “C” as it is referred to in some states, in this case Arizona refers to it as “Requirements” is the final part of the Title Commitment that defines the “Requirements” to be completed prior to, or at, closing for “Clear Title” and an “Owner’s Policy” of Title Insurance to be issued to the buyer.  In this case the following were required to issue “Clear Title” and an “Owner’s Policy” of Title Insurance.

• Compliance with ARS- 11-480 relating to how documents are styled, acknowledged and recorded
• Taxes brought current for 2013
• Evidence that the HOA has received all fees due and payable
• Release of an existing lien against the property
• Furnish a “Statement of Identity” on behalf of the seller
• Evidence of recording a “Warranty Deed” from the Seller to the Buyer
• Evidence of the recording of a “Deed of Trust” as the purchase was inclusive of a note payable to a lender
• An instrument affirming that the (seller) husband has vested “community” interest in title to his wife

Forms of Real Estate Title in Arizona

The last section I will deal with is Real Estate Ownership in Arizona.  There are many forms of available ways to take real estate title in Arizona and you will need to use the vehicle that best suits your purposes.  A chart is included below for ways to take title in Arizona.

While this is an outline of the process of purchasing real estate in Arizona there are several subitems not addressed in this narrative such as promulgated real estate forms in addition to the excerpts that you have seen here.  Each transaction is its own “beast” and each type of property has its own special additional forms to be used to facilitate the purchase of Arizona Real Estate.

There are legal and tax situations/questions/concerns that can arise and before you begin your purchase of Arizona Real Estate I would encourage you to seek the advice and counsel of your CPA and a competent attorney.

I am not an attorney nor CPA and cannot provide you with legal or tax advise but I can provide you with my knowledge of the North Scottsdale, Cave Creek, Carefree, North Phoenix, Rio Verde, Tonto Verde and Rio Verde Foothills areas of North Scottsdale.

As a licensed Real Estate Broker in the Great Nations of Arizona and Texas, and being a licensed Real Estate Broker for over 37 years, I like to say that “I have seen it all….well, almost”.

Give me a call, text or email.  The list below represents well over 400 peers and clients that have endorsed my skills as a Real Estate Professional in North Scottsdale Arizona as well as Texas.  These are real people that I call friends and clients.

North Scottsdale Homes For Sale By Price

North Scottsdale Arizona Subdivision Homes For Sale Search

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Carefree Arizona |Real Estate |MLS |Realtor |Homes |Search

Carefree Arizona Subdivision |MLS |Homes |Golf Course Homes |Lots |MLS

Rio Verde Foothills Arizona Homes For Sale |Golf Course Homes |Horse Properties

North Scottsdale Arizona | Horse |Properties |Homes |Land

Commercial Real Estate For Sale

Scottsdale, Phoenix, Tempe, Chandler, Gilbert, Mesa, Fountain Hills, Scottsdale, Cave Creek, Carefree, Arizona.  Search all Commercial Real Estate For Sale.  Search Office, Office Warehouse, Warehouse, Medical, Dental, Retail, Commercial Land For Sale.

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