Are you looking to buy a home in the Phoenix Metro area? Your very first step is to connect with a mortgage loan officer, like me! After filling out an application here, you’ll be prompted to upload documents that coordinate with the information submitted. The documents are critical. We, as loan officers, must do a four-way verification of your income and expenses. This is done through your written application, your documents, your credit report, and typically a written form which we obtain directly from your employer. To ensure your preapproval is a valid one, we must be sure your income and debts are calculated as accurately as possible, based on what underwriting guidelines allow us to use.
Once we issue your preapproval, you’ll then be empowered to shop for a home with confidence. Most buyers use a Realtor. If you’re having apprehension about using a Realtor, a key factor to consider is that Realtors are paid by the seller 99% of the time. Someone listing their home generally offers a commission for the agent listing their home AND a commission for the Realtor who brings the buyer. As a buyer, if you sign a buyer agency agreement with a Realtor, be sure to read through the full agreement and know this is how it is structured. While it’s rare, there are some agents who structure their pay to be a specific commission percentage regardless of what is being offer by the home seller. This is where you could possibly be responsible for paying a buyer’s agent. In addition, properties that are for sale by owner, may result in scenarios where you would pay a Realtor as a buyer. Again, both of these are rare. You just want to cover yourself and know compensation in advance.
It's important to understand the typical out of pocket costs when buying a home. Once you find the home you want to write an offer on, along with the contract you’ll submit what is called an earnest deposit. I’ve seen these range between $500 and $30,000 for a higher end home. The earnest deposit is held in escrow, a neutral third-party vendor who facilitates the financial and ownership transfers of a property. You’ll consult with your Realtor to determine the right amount, although the choice is ultimately yours. The earnest deposit is a monetary gesture to show the seller that you are a serious buyer and legitimize your offer. The earnest deposit will apply towards your down payment and/or closing costs.
In addition, you’ll have to pay for an appraisal. In Maricopa County, the average appraisal runs $550-$650 depending on loan type, turnaround time, and property type/size. The majority of buyers also elect to purchase a home inspection. While an appraiser is required by the lender and focuses on the value of the property, a home inspection is optional to the buyer and focuses on property defects. A home inspector looks for everything they can find wrong with the home and itemizes it for you – even down the smallest detail like a non-functioning outlet. Most inspections run about $500. Another optional inspection that homebuyers purchase is a pest inspection. In Arizona, these are purchased primarily to determine if a property has termites and run $75. Again, purely optional, but when you’re making one of the largest purchases of your life, you want to know exactly what is wrong or with the home, to the best of your ability. This not only allows for further negotiation, should something be found wrong in the home, but it allows you insight as to expenses you may incur in the future, should you not be able to negotiate an additional discount or repairs to be paid by the seller upfront.
Ready to get prequalified today? I’d love to serve you. Feel free to call or text me at 623-298-5002 with any questions. Phoenix is one of America's sunniest metropolitan areas. I have lived here for 26 years to date and I love it! You can drive for a few hours and be in cooler weather, drive a different direction several hours, you can be on the beach. We’ve got huge lakes, amazing community, arts, culture, and sports galore. There’s something for everyone here! You’re going to love it!