BUYER ORIENTATION

Remember…your state of mind is important to us!

If you're relocating to The Phoenix Metro Area or the "Valley of the Sun" you'll need to know how large and diverse the valley is.  You'll want to know: 

1. How the valley is laid out?
2. What each area has to offer in landscape style?
3. What types of communities are in each area?
4. What each valley area offers in recreation, shopping, cultural, transportation and educational amenities/facilities?
5. What types of communities, home styles there are in the various areas?

Buyer orientation may need to be less extensive if you're an Arizona native, but there are many other items to go over such as:

1. What you like or dislike about the home you're leaving, or other homes you've owned?
2. What amenities would you like to have, have to have, or don't want in a community?
3. Do you want to live in a large or small community or would you prefer not being part of a community with a homeowner's association?
4. What home specific criteria do you have: how many bedrooms, bathrooms.  What house type or style do you prefer?

How AZ State Of Mind and its Realtors will represent you can be summed up in the following way:

1. FIRST know that we are all REALTORS.  There are companies and individuals advertising for your business that are referral services.  They will source out your information for a fee.  At AZ State Of Mind Realty all of our REALTORS are licensed and members of local, state, and national boards. 
2. ABR or Accredited Buyer's Representative is the credential awarded to those REALTORS who have completed the National Association of Realtors requirements to use the ABR logo.  The organization that governs the ABR requirements and restrictions is REBAC.
3. Agency is an important part of Real Estate.  It determines how a Realtor and Real Estate Company will represent you.  This will be discussed and reviewed with you and your agent and team at your first meeting.

Presenting an offer and what that involves is something we'll discuss before we start our search.  There are some things such as:

1. Having a pre-qualification letter from a lender: 

• The terms of the contract provide for a Conditional Loan Approval from the lender based on a loan application and Tri-merged Residential Credit Report within 5 days of Seller’s Acceptance (unless specified differently in the contract).  Therefore, meeting with a lender before you start your home search is imperative.
• The loan officer will tell you beforehand exactly what you're qualified to buy, what issues might need to be addressed, what items might be needed to be ready when applying for the loan, etc.  You will most likely need to have two of your most recent pay stubs, W-2s for the last 2 years (or if self-employed, 1040s for 2 years), federal tax returns for the last 2 years, last 2 months’ bank statements, long-term debt information (credit cards, child support, auto loans, installment debt, etc.), proof of funds for your down payment. 
• The loan officer will also give you a Good Faith Estimate of the closing costs involved with the financing. There are recurring costs that you pay that are included in the monthly payment, such as homeowner’s insurance and property taxes (the monthly payment consists of principal, interest, taxes and insurance and is referred to as PITI).  And there are one-time fees involved with closing costs such as the origination fee, usually one point (or 1% of the loan amount) and any other points, sometimes called discount points (the more points, the lower the interest rate). The appraisal fee, credit report, and other lender fees, such as document preparation, underwriting fee, are further one-time closing costs. Loan approval documents needed upon application:

2. What the purchase contract consists of and what it means to you
3. How you'd like us to negotiate on your behalf
4. What title company you'd like to use (in Arizona a Title Company, holds legal documents from the buyer, the seller and the lender, and funds on behalf of a buyer and seller, and distributes the funds according the buyer and seller’s instructions via a purchase contract).
5. Review of the Buyer's Advisory, terminology or any other Arizona specific things you may have questions about

Searching for homes will be next on our agenda.  We can meet at the office and search for homes to see together, or a list of homes can be prepared for you in advance.  Should your criteria change, there is no need to run back to the office.  We will be able to check what other homes in the area are available with your new criteria because AZ State Of Mind Realtors have a Palm that holds MLS listings.  We'll be ready to switch course and find your dream home immediately!

Making the offer.

1. The first thing we do is to check the comparable home sales in that subdivision to see if this home is priced fairly, and how it relates to others similar to it that have sold. This CMA (comparable market analysis) tells us the price range of sold properties are in the area, what the average time on the market for them has been, and what the average sales price per square foot is by checking what's been sold recently.
2. Next we will complete the entire sales contract including pool, lead based paint as well as any other addenda that are required.  We will also cover the importance of a home warranty.
3. Now we present the offer to the seller and his/her agent.  If the seller prefers that we present the offer vial his agent or by fax we will do so. 
4. When the contract is accepted and signed by all parties, we will have 10 days in which to complete our inspection period. 
5. When the inspection period is completed, we are on our way to the close of escrow

What is an escrow and what happens in Escrows?

1. An escrow is an arrangement in which a neutral third party (in Arizona a Title Company) holds legal documents from the buyer, the seller, and the lender, as well as all funds on behalf of a buyer and seller, and distributes the funds according the buyer and seller’s instructions via a purchase contract.
2. People buying and selling real estate open an escrow for their protection. The buyer instructs the title company (via the contract) to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions.
3. The seller instructs the title company (via the contract) to retain possession of the deed to the buyer until the seller’s requirements, including receipt of the purchase price, are met.
4. The title company to carries out  the buyers, sellers, and lenders instructions relating to the transaction and to advises them if any of their instructions are not consistent or cannot be carried out.
5. The title company is the central depositing entity while all inspections, reports, loan commitments and funds, deeds and other functions are being performed consistent with the "closing."
6. The title company can carry out many actions on the behalf of all parties concerned in the real estate transaction thus facilitating the closing in a timely and organized manner.

Typical instructions to the Title Company

• The method by which the title company is to receive and hold the purchase price to be paid by the buyer.
• The conditions under which a lapse or breach of purchase contract provision will terminate the escrow without a closing.
• The instruction and authorization to the title company to disburse funds for recording fees, title insurance policy, real estate commissions, and any other closing costs incurred through escrow.
• Instructions as to the pro-ration of insurance and taxes.
• Instructions to the title company on the payment of prior liens and charges against the property and distribution of the net sales proceeds.

      The duties of the Title Company

• Opens the order for title insurance (provided by seller to buyer at closing).
• Obtains approvals from the buyer on the Preliminary Report, pest and other inspections.
• Receives funds from the buyer and/or any lender.
• Prorates insurance, taxes, rents, homeowner association fees, etc.
• Disburses funds for title insurance, recording fees, real estate commissions, & lien clearance.
• Prepares a final statement for each party, indicating amounts to be disbursed for services and any further amounts necessary to close escrow.
• Records deed and loan documents, delivers the deed to the buyer, loan documents to the lender and funds to the seller, closing the escrow.

What Happens Before Closing?

• While the sale is in escrow we will stay in close contact with the lender making sure that  everything necessary for the final loan documents is taken care of, for the seller to take care of any requested repairs, and for the lender to go through the underwriting process.
• As a buyer, you will want to arrange for the utilities to be turned on when the seller’s is turned off. Don’t forget to have the phone company ready to turn on your new service as well. Make sure all magazines, bills, and family and friends, have your new address! Anything related to school registration should also be done well in advance. Moving preparations should be made as soon as you know the offer is approved.

The Closing

1. The closing is almost always done at the title company (an exception could be an out-of-state or out-of-country buyer, in which case documents are Fed-exed and need to be notarized). Buyer and seller close at the title company separately, and the keys are not given to the buyer until the recordation, which may be that afternoon, or the next morning. The recordation, which is the recording of the deed, is considered the actual "closing", so time your movers accordingly.
2. Buyers (and sellers) and their agents will be given an audit sheet (the settlement sheet) showing the closing costs beforehand, so there are no surprises, and the buyer will know exactly how much his cashiers check should be.
3. Your loan officer will have gone over the final closing costs involved with the closing as well just prior to closing.
4. Other closing costs will consist of the title company’s processing fee (escrow settlement fee), recording of the deed, pre-paid interest*, homeowner’s insurance, homeowner’s insurance impounds, property tax impounds, and a notary fee.
5. *Pre-paid interest - Since mortgage loans are due on the first day of the month, and properties can close any day of the month, the interest will be prorated and paid at this time.
6. Homeowner’s insurance premium is paid at the closing. However, since the mortgage company will be paying the continuing payments, it will divide the annual premium by twelve to get an estimated monthly amount and hold 2 months in your impound account.
7. The same is true of the property tax. Property taxes are prorated at the closing and the buyer is responsible for the taxes from the closing date on, which may start based on the closing date, and therefore prorating gives the seller any prepaid tax refund. Taxes are divided by twelve and 2 months is held in your impound account.