2. Table Of
Contents:
CLOSING THE AMERICAN DREAM.
Useful Information
q YOUR CONTACTS
q WHO DOES WHAT
q WHY USE A REALTOR®
q ESCROW & TITLE
Buyer’s Guide
q BUYERS TIPS
q HOUSE HUNTING
q HOUSE HUNTING EVALUATION
q FOUND YOUR HOME, NOW WHAT?
q WAYS TO TAKE TITLE IN ARIZONA
q MISCELLANEOUS INFORMATION
Seller’s Guide
q SELLING A HOME
q SHOWING A HOME
q INSPECTIONS
q HOME WARRANTIES
q F.A.Q.
q MOVING CHECKLIST
q FORMS AND DOCUMENTS
This publication is designed to provide general information provided by American Title Service Agency LLC, in regard to the subject matter covered
in this Buyer/Seller Guide. It is provided free of charge with the understanding that the publisher is not engaged in rendering legal, accounting,
tax, real estate related or other professional services. Although prepared by American Title Service Agency LLC, this publication should not be
utilized as a substitute for paid professional services. If professional real estate assistance is required, seek the assistance of an attorney or a
licensed Arizona REALTOR®.
3. CLOSING THE AMERICAN DREAM.
YOUR CONTACTS:
Complete the info or secure business cards for easy reference.
REALTOR® American Title Service Agency
Escrow Officer
Name: Name:
Office Phone: Office Phone:
Cell/Direct Phone: Cell/Direct Phone:
Office Address: Office Address:
Cross Streets: Cross Streets:
Email: Email:
Mortgage Loan Officer OTHER
Name: Name:
Office Phone: Office Phone:
Cell/Direct Phone: Cell/Direct Phone:
Office Address: Office Address:
Cross Streets: Cross Streets:
Email: Email:
Other Important Phone Numbers:
Insurance Agent:
Home Inspector:
Termite Inspector:
Home Warranty Company:
4. WHO DOES WHAT?
Here is some helpful information so that you may understand who your team is and what they do for you.
A BUYERS AGENT
• Represents buyer with purchase of property, loan and escrow process
• Helps buyer engage a lender who informs buyer the maximum loan amount they qualify for
• Helps buyer find suitable property
• Advises buyer and helps negotiate the price and terms through seller’s agent
• Verifies all property information from preliminary title reports, liens, title,
legal description, restrictions, easements, etc.
• Coordinates all information between buyer, lender, escrow, inspections and seller’s agent
• Guides buyer through contract process, loan, required insurance, escrow and closing
• Takes buyer on “walk through” inspection of property to note any problems
that need to be addressed during the inspection period
• Arranges to meet with any inspectors at property (with or without buyer present)
• Usually accompanies buyer to American Title Service Agency for loan and escrow signing
• Delivers existing keys to buyer after the property records from seller to buyer
A SELLERS AGENT
• Represents seller of property
• Orders property profile from title company to determine ownership, liens, legal description, square
footage, bedrooms, baths, roof, heat/air, or special amenities such as a pool, workshop, etc.
• Does market research and helps the seller establish the market value of the property from recent sales
• Lists property on multiple listing service, reaching almost every REALTOR® in the community
• Markets to REALTORS®, advertises, holds open houses, dispurses information about your property
through the multiple listing service or other cooperative marketing networks
• Oversees necessary repairs of property and maintenance during listing period
• Negotiates price and terms of purchase contract with buyers agent on behalf of the seller
• Coordinates and disseminates information between buyer’s agent, seller,
escrow, property inspectors and any others involved in sale
• Oversees inspections and any other repairs agreed to in contract
• Usually meets with seller to sign escrow/loan documents arranges pickup and delivery
of existing keys to property and instructional information on any equipment, warranties, etc.
CLOSING THE AMERICAN DREAM.
5. YOUR AMERICAN TITLE SERVICE AGENCY ESCROW OFFICER
• Coordinates most aspects of purchase contract
• Orders preliminary title report on subject property to confirm legal information on subject property,
owners of record, current taxes, deed/lien information and CC&R’S of record
• Makes certain that all “conditions” are met as per instructions, agreed to by buyer and seller
• Coordinates all information between both agents, title department, lender and inspectors, etc.
• Gathers all documentation regarding new and existing loans, inspection reports,
repairs and title requirements, etc.
• Arranges for buyer and seller to sign all escrow and title documents
• Records all documents required to transfer title from seller to buyer
• Disburses all funds necessary for existing loan payoff, inspections, demands of payments for repairs, etc.
• Arranges for seller to receive proceeds of sale
YOUR LOAN OFFICER
• Defines loan amount for borrower
• Qualifies borrower
• Orders appraisal on subject property
• Submits borrower’s information to underwriter for approval
• Orders loan documents to be sent to escrow for borrowers’ signature
• Returns documents to underwriter for final inspection (correct signatures/dates)
• Orders loan funds for purchase which are sent to escrow for disbursement by escrow officer
CLOSING THE AMERICAN DREAM.
6. CLOSING THE AMERICAN DREAM.
WHY USE A REALTOR®?All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION
OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR “®” logo on their business
card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly.
REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the
process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the
same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime.
Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal
with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an
attorney? Considering the small upside cost and the large downside risk, it would be unwise to consider a purchase
of real estate without the professional assistance of a REALTOR®.
But if you’re still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power; that is, your financial reserves plus your borrowing
capacity. If you give a REALTOR® some basic information about your available savings, income and current debt,
he or she can refer you to lenders best qualified to help you. Most lenders, (banks and mortgage companies) offer
limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are
seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find
all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property.
Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local
community information on utilities, zoning, schools, etc. There are two things you’ll want to know. First, will the
property provide the environment I want for a home or investment? Second, will the property have resale value when
I am ready to sell?
4. Your REALTOR® can help you negotiate. There are a myriad of negotiating factors, including but not limited
to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or
equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and
investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which
investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and
property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank
and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to
7. CLOSING THE AMERICAN DREAM.
do most of these investigations and provide you with written reports. You will also want to see a preliminary report
on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners
or rights of access. The title to most properties will have some limitations; for example, easements (access rights)
for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a
later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying
qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the
marketplace and the price, financing, terms and condition of competing properties. These are key factors in
getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can
recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR®
markets your property to other real estate agents and the public. In many markets across the country, over 50% of real
estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR®
acts as the marketing coordinator, disbursing information about your property to other real estate agents through a
Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code
of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that
advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate
sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When
a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your
REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your
marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing
-- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more
likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or
settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in
the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best
person to objectively help you resolve these issues and move the transaction to closing or settlement.
Courtesy of Realtor.com
8. CLOSING THE AMERICAN DREAM.
WHAT IS ESCROW?
When finalizing the purchase or sale of a home, a neutral, 3rd party (the escrow holder, a.k.a. escrow agent/
officer) is engaged to assure the transaction will close properly and on time.
The escrow holder insures that all terms and conditions of the seller’s and buyer’s purchase contract/escrow
agreement are met prior to the sale being finalized, including receiving funds and documents, completing
required forms, and obtaining the release documents for any loans or liens that have been paid off within the
transaction, assuring you clear title to the property before the purchase price is fully paid.
The documentation the escrow holder may be collecting includes:
• Loan documents
• Property Tax Information
• Fire and other insurance policies
• Title insurance policies
• Terms of sale and any seller-assisted financing
• Requests for payment for various services to be paid out of escrow funds
Upon completion of all instructions of the escrow, closing can take place. All outstanding payments and fees
are collected and paid at this time covering expenses such as; taxes, homeowner association transfer fees,
inspection fees, real estate commissions and title insurance and escrow fees. Title to the property is then
transferred from the seller to the buyer and appropriate title insurance is issued as outlined in the purchase
contract and preliminary title report. At the close of escrow, payment of funds due by you shall be made in an
acceptable form to the escrow holder, this is typically a Cashier’s Check or wire transfer of funds.
WHAT ESCROW NEEDS FROM THE BUYER
• Your exact name, marital status, address and contact information and manner
in which you wish to acquire title.
• Name and address of your proposed lender. Also, the name and phone number
of your loan representative.
TIPS FOR A SUCCESSFUL CLOSING
COMMUNICATE
Frequent communication with all parties involved (your REALTOR®, loan officer and escrow officer) is critical.
It is extremely important to communicate any significant changes in your life, such as job changes, new car
purchases, and changes to your sales price, as well as if you wish to change your close of escrow date.
9. HOMEOWNER’S INSURANCE
Failure to secure Homeowner’s Insurance in advance of closing is a leading cause of delays in the mortgage
process. Insurance should be secured as soon as possible before your scheduled closing date. It is no longer
always possible to secure homeowners insurance at the last minute. Be prepared to order this as soon as
you can.
CHANGING JOBS
Your income is a crucial part of the puzzle when determining your ability to repay the loan. The underwriter looks
at the stability of your job and should you change jobs during the loan process, it potentially could create some
instability in your loan profile. Contact your Loan Officer prior to making any career changes.
DEBT
Paying off debt may sound like the right thing to do, but the additional liquid assets you have may have been a
determining factor in your loan approval. Contact your Loan Officer before making any significant changes to your
debt structure. Also avoid allowing payments to be late between now and closing.
PROVIDE DOCUMENTATION WHEN REQUESTED
Any delay in receiving requested information may postpone the approval and closing process. Provide all requested
information in a timely manner.
LARGE PURCHASES
Your debts and cash reserves have already been assessed. Any changes to these could jeopardize your approval.
Contact your Loan Officer prior to making any significant purchases.
AVOID MAKING MOVING PLANS TOO TIGHT
Try to allow a 5-7 day overlap between closing date and move date. If the closing date is moved for any reason,
unbudgeted expenses could occur.
FINANCIAL RECORDS
Occasionally, your mortgage company will have to verify information from previous bank account statements or
pay check stubs such as large deposits or bonus checks. Save all of these items during the loan process as well as
the paper trails on any deposits that are not income, such as tax refunds or 401k loans. When you pack, remember
to keep all financial information in a convenient place. Do not put this information in storage or let movers take it.
ALLOW TIME TO GO TO THE BANK ON CLOSING DAY
The cashier’s check or wired funds for closing should be made out to American Title Service Agency. Assuming your
loan process went exactly as planned, you will receive your final closing figures from the title company prior to
your closing.
CLOSING THE AMERICAN DREAM.
10. CLOSING THE AMERICAN DREAM.
UNDERSTANDING TITLE INSURANCE
In Arizona, it is common for a title company to issue two title insurance policies:
1) The Owner’s Policy
2) The Lender’s Policy
Each plays a vital role in the home buying process, though the homeowner only benefits from the Owners
Policy of title insurance.
The “ALTA” Homeowner’s title insurance policy (which stands for the American Land Title Association), is an
extended title insurance policy that protects the homeowner from any undetected clouds or defects of title that
did not show up in the title search and up to 34 other potential issues. Generally, the premium for this policy is
paid by the seller of the home for the buyer. This title insurance policy is based upon the sales price of the home.
The second type of policy is issued by American Title Service Agency to protect the lender from any clouds or
defects should they have to foreclose upon the homeowner. Often referred to as an “ALTA” loan policy, this
policy protects lenders of all types who are making loans of their depositors’, investors’ or employees’ funds and
must obtain the security of a real property to protect the investment. To obtain title insurance for its investment,
a lender needs a valid, enforceable mortgage lien that has priority (also known as a first mortgage) over any
known or unknown interests or claims to the property that is used as security for the note. Title insurance
provides the assurance which the lender needs by insuring that the homeowner actually has title to the property
and that no other entity or person has an interest that will affect the lender’s security. This title insurance policy
is based upon the buyer’s loan amount.
These types of policies provide for indemnity against loss or damage for undisclosed interests, ownerships,
defects, liens or encumbrances on or affecting the property, or because of a lack of access to or from the
property or for an alleged or actual un-marketability of title to the property. In addition to insurance of the title,
the ALTA loan policy insures the validity, enforceability and priority of the mortgage against the home.
WHY DO I NEED TITLE INSURANCE?
Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house,
you’ll want to know that no other individual or entity has a right, lien or claim to the property.
Delivering a clear title from a seller to a buyer is achieved through the issuance of a Title Insurance Policy. Title
insurance provides coverage for owners of real property (real estate) and lenders who use real property as
security for a loan by protecting them against claims against the property.
11. CLOSING THE AMERICAN DREAM.
TITLE INSURANCE = PEACE OF MIND
Researching a property’s title history generally uncovers the most obscure claims against a home. However,
there could be “hidden risks” that could threaten the homeowner’s claim to ownership of a home. Matters such
as forgery, incompetency or incapacity of the parties, fraudulent impersonation, and unknown errors in the
records are examples of “hidden risks” that could provide basis for a claim after a homeowner has purchased
a property.
For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an
amount equal to the purchase price of the property or its current market value. There are seperate premiums
for your owners policy as well as your lenders policy. When issued simultaneously, the lenders policy premium
is provided at a discounted rate.
One of the marked advantages of title insurance is that prior to a policy being issued, American Title Service
Agency completes extensive research into relevant public records, maps and documents to trace ownership
of the property and determine if anyone other than you has an interest in the property. Through its research,
American Title Service Agency can usually identify any title problems that may arise and have these problems
cleared-up prior to closing.
Your title insurance owner’s policy will describe the property and outline any recorded limitations on
your ownership. It will also set forth the underwriters responsibilities should any claim covered by the
policy terms arise. Typically your title insurance will protect you from loss:
• If someone contests your title in a civil action the title insurance company will defend the title
at no expense to you subject to policy limitations and deductibles.
• If there is a title defect that cannot be eliminated your title policy will protect you from financial loss
based on policy limitations and deductibles up to the amount of the policy.
14. CLOSING THE AMERICAN DREAM.
BUYERS TIPS
SO YOU ARE GETTING READY TO BUY...
Now is the time to assess your situation, motivation and bank account to
determine how you can accomplish your goal of getting into your first home
or moving into a different home. You will need to consider many things
including your employment history, income, credit history and current debt,
what you can afford and how much it will cost you to get into a home... and
that’s before you even think about your wants and needs in a home.
FIRST THINGS FIRST... PREPARATION
In this day and age we are prone to wanting instant gratification. Due to
this, many potential homebuyers go looking at homes first, then contact the
REALTOR® to view a few that have caught their eye. Then they figure out
how to pay for the new home. This can be self-defeating! The best and least
stressful method of buying a home goes in this order:
• FIND A REALTOR®
• DECIDE YOUR WANTS AND NEEDS IN A HOME
• SHOP FOR A MORTGAGE LENDER
• CHECK YOUR CREDIT
• CALCULATE YOUR DOWN PAYMENT AND CLOSING COSTS
• SHOP FOR HOMES
DECIDE YOUR WANTS AND NEEDS IN A HOME
What do you need in a home? What do you want in a home? What are you willing to compromise on? A family
of 5 for example might need 4 bedrooms, one for the parents and one for each child, however, you might want
an extra bedroom just in case Auntie Em comes to visit or to use as a home office/gym. So no point shopping
for 3 bedroom homes - however it would be nice to shop for 4 and 5 bedroom homes in case you find one with
the extra bedroom that you want. If school districts are important to you, make it a non-negotiable need. You’d
love to have a pool (want) but would settle for a home without one if it offered everything else you needed. You’d
prefer a home (want) on the corner, but it’s not the end of the world if you don’t find it (you don‘t need it). List
your wants on one side and your needs (must haves) on the other side of our handy Wants and Needs List for
an easy ‘shopping’ guide.
SHOP FOR A MORTGAGE LENDER
Not all loan professionals are created equal and so shopping for a good mortgage professional is important.
Ask your REALTOR®, friends, family and co-workers for referrals to professionals they have used with positive
HELPFUL HINTS:
What is EARNEST MONEY?
Earnest money is a deposit that is
presented with an offer as a show
of the buyer’s good faith. If the
contract is accepted the earnest
money is deposited with a neutral
third party preferably American
Title Service Agency and credited
to the buyer at closing.
15. CLOSING THE AMERICAN DREAM.
results. Some lending companies can only offer a few loan programs while others have unlimited access. Ask
about their charges for giving you a loan too; this can affect your closing costs. Some loan companies charge
higher origination fees and or points but can get lower interest rates while others charge a small origination fee
and no points but your payment might be a bit higher. Know what is important to you, what you can afford and
ask questions. Having slightly higher closing costs up front might be more attractive to you than paying a higher
house payment each month or paying a few dollars more each month might help to lower your closing costs.
When you know what you can afford to buy, shopping for a home is so much simpler.
CHECK YOUR CREDIT
Knowing your credit score and catching errors or misunderstandings on your report before applying for a loan
is a smart move. Look at your income versus your monthly expenses, make sure you remember to include
things such as childcare, groceries, home maintenance and automobile costs (payment/gas/insurance etc) when
calculating your debt load. Knowing how much money each month you can safely afford for a house payment
along with how much you have saved for a down payment and closing costs is probably the easiest way to
determine how much you can spend. When you contact a lender they can assist you with this analysis.
THE THREE MAJOR CREDIT BUREAUS YOU CAN REQUEST YOUR CREDIT REPORT FROM ARE:
Trans Union 1-888-503-0048 - Equifax 1-800-685-1111 - Experian 1-888-EXPERIAN (397-3742)
DOWN PAYMENT
A down payment is usually between 3% and 20% of the total cost of the home. The amount of the down payment
depends on your credit history, income, the cost of the home, and the type of mortgage you choose. Some
lenders also have loan options that allow for no down payment at all. PMI is insurance you pay to protect the bank
if you don’t repay your loan in full. PMI is added to your closing and monthly mortgage costs. When you apply
for a home loan, in addition to the down payment funds, many mortgages require you to also have at least two
months worth of mortgage payments saved, called reserves. However, there are mortgages that do not require
reserves. Most lenders want to know the source of your down payment and have restrictions about how much
can come from gifts from your relatives. In most cases, these gifts will need to be documented. Ask your lender
for more information.
CLOSING COSTS
Closing, or settlement, costs are fees you pay when you actually get your loan from your financial institution.
These include points, taxes, title insurance, escrow fees, financing costs, items that must be prepaid or escrowed,
and other settlement costs. You’ll receive an estimate from your lender after you apply for a mortgage. You must
pay these costs at the time you close on your loan.
16. CLOSING THE AMERICAN DREAM.
house hunting
SHOP FOR HOMES
After your REALTOR® has seen a copy of your wish list, they will compile a list of homes to show you. Allow
plenty of time to view the homes, use our handy Property Evaluation Forms to keep track of the features in the
homes you see and, when ready, make a strong competitive offer! Of course your REALTOR® can compile
a list of homes for you without the Wants and Needs list – but the more you know about what you want and
what you really need, the easier it is on all of you! *Note in this market, it is highly likely that the home you are
interested in could have other offers being submitted on the same day. Making your offer with the least amount
of contingencies, showing you are a qualified buyer and offering a substantial earnest money deposit (which can
be used toward your down payment) might just get your offer placed on the top of the pile! Be prepared to write
a contract on a different home if your offer is not accepted and/or be ready to look at different homes. The right
home is always out there, sometimes it just takes patience and perseverance to find it.
NEW OR RESALE?
As you search for your dream home, you’ll probably hear a variety of opinions on whether you should purchase
a newly built home (new build) or a resale home (purchase from previous owner). There are advantages to
both new builds and resales, but your individual needs, not the age of the structure, should be foremost in
deciding which is best for you. For a better idea of which type may be more suited to your needs, let’s look at the
advantages of both new and resale homes.
WHY BUY A RESALE HOME, BANK OWNED OR SHORT SALE? (Previously Owned)
Housing styles have changed with time, and you might favor more traditional layouts and features. Older houses
and neighborhoods may have more character and charm. The trees are full-grown, and the neighbors can tell
you all about your new hometown. Here are some other advantages:
• Resale homes may provide more opportunities for home improvements
• They typically have more land than newer properties due to changes in land-use patterns
• The homes are often in older, more convenient metro areas rather than outlying suburbs
• You can use the existing home as a base for building a unique property
through modernization or expansion
• Resales tend to be less expensive than new properties and more likely to come complete with items that
may cost extra with a new home such as blinds, landscaping, built-ins, etc.
• Sometimes resale homes may have lower property tax rates – check with your REALTOR®
• Owners usually aren’t required to pay for the local bonds that are sometimes associated with
new development, such as for schools, parks, or road or transportation improvements
• These homes often have more traditional layouts, which may include such areas
as formal living and dining rooms
• Buyers can most likely purchase a larger home for the same money with a
resale than with new construction
17. CLOSING THE AMERICAN DREAM.
WHY BUY A NEW HOME?
Perhaps you love the idea that you can be a home’s very first owner. Everything is new and shiny, the neighbors
are probably also just moving in, and you can customize the floor plan and colors. Buying a new home can be
fun and exciting. Here are some other advantages:
• New homes are built with new materials and appliances, so less maintenance
is typically required than with resale homes
• They often possess more safety features and fewer health
hazards to conform to today’s building codes
• Many homebuilders offer warranties in case certain problems develop over time
• The home’s major appliances and systems also typically include manufacturers’ warranties
• They typically feature modern architecture and layout such as great rooms, bigger closets, and
additional bathrooms, which often replace the formal dining and/or living rooms of older homes
• New homes are usually well-insulated due to better windows, more efficient heating and cooling
equipment, and greater use of insulation
• The homes are often made with materials requiring less maintenance, such as aluminum siding,
vinyl windows, and pressure-treated wood decks that resist rot and insects
• They can be easier to customize than resale homes since you can choose many details ranging
from floor plans and paint colors to faucets and light fixtures
• New homes are more apt to be wired with new technologies in mind, such as being pre-wired for
multiple phone lines, high-speed Internet connections, extra cable or satellite outlets and surround
sound speaker systems
As you can see, both new homes and resale homes offer significant, but very different, advantages. Keep in mind
that the real question shouldn’t be about whether to buy a new or used home. It’s more about finding which
individual property will best meet the needs of you and your family.
18. CLOSING THE AMERICAN DREAM.
YOU’VE FOUND YOUR NEW HOME – NOW WHAT?
After you have an accepted contract on a home, you or your REALTOR® should contact your loan officer to
provide them with the following information:
1. The full property address.
2. Closing date as per contract.
A legible copy of the contract and all counter offers that have the full property address and closing date specified.
Get this to your lender as soon as possible – your REALTOR® should do this but if you are working without
one, do this yourself.
3. If you are purchasing a property with a Home Owners Association (HOA), you should have the name
of the HOA as well as the address of the specific association with a contact person, and contact number for
the association.
NOTE: Not having the above information upfront can slow the registration or processing of your loan. If working
with a REALTOR® they can provide this information for you.
If your loan was approved with conditions it is very important to know what the conditions of your loan are.
Write down the conditions you are responsible for. Such as:
1. Asset verification.
2. Income verification.
3. Credit conditions.
4. Any other personal conditions that you are able to provide right away.
After you have registered your loan with your loan officer you should receive a loan package within 3 business
days. During that time you should have prepared the conditions you received from your loan officer and have
them ready to be returned.
NOTE: Getting the information to your loan officer as quickly as possible is a major factor in getting your loan
closed on time and locking in interest rates. If you would like to or need to change the loan type (30 year
fixed, 5/1 ARM, etc.) at any time, call your loan officer for their mortgage advice and notify your REALTOR®
to take the steps you need to revise your existing program. Remember always get it in writing and assume the
loan process could start all over again.
When you receive your loan package it is very important to return the completed package and requested
information as soon as possible. Review the loan documentation thoroughly and sign where it is indicated. You
should receive a copy of all documentation in the loan package for your file. Sign the documentation and input
19. CLOSING THE AMERICAN DREAM.
your prepared conditions and return the package to the lender. Your package will also have the name of your
processor. You should contact your processor as soon as you receive the package if you have any questions.
Introduce yourself and inform them of when the package will be returned.
Your processor works with your loan officer for the same mortgage company and it is the processor’s job to
prepare your loan to submit to underwriting. The loan processor will inform you of any additional information
that is needed in order to move the process forward.
It is very important to keep your REALTOR® informed of any communication with the processor as well as
your loan officer and your American Title Service Agency escrow officer. If there is a delay, your REALTOR®
can assist you.
When your loan is going through the underwriting process, make sure you are available to speak with the
processor throughout your underwriting process, since things can change daily and getting necessary items in
a timely manner is key to getting your loan closed on time.
Finally, your closing. You should verify that you are ready for closing 10 days prior to your scheduled closing
date. Make sure that the processor has scheduled the closing with American Title Service Agency and that your
loan has been fully processed and underwriter reviewed. Your loan when approved for funding, gives the seller
the comfort of knowing that you are totally approved for your loan. Please keep in mind failing to communicate
with your lender, agent and escrow officer can cause you to lose your home and in some cases your earnest
money deposit!
20. CLOSING THE AMERICAN DREAM.
WAYS TO TAKE TITLE IN ARIZONA
Joint Tenancy
with the Right of
Survivorship
Community
Property with
the Right of
Survivorship
Tenancy in Common
Sole and
Separate
Parties need not be married: may
be more than two joint tenants.
Requires a valid marriage
between two persons.
Parties need not be married: may be
more than two tenants in common.
See note at bottom
of page.
Each joint tenant holds an equal
and undivided interest in the
estate, unity of interest.
Each spouse holds an
undivided one half interest
in the estate.
Each tenant in common holds an
undivided fractional interest in the estate.
Can be disproportionate.
(ie: 20%-80% or 60%-40%)
See note at bottom
of page.
One joint tenant can partition the
property by selling his or her
joint interest.
One spouse cannot partition
the property by selling his
or her interest.
Each tenant’s share can be conveyed,
mortgaged or devised to a third party.
See note at bottom
of page.
Requires signatures of all joint
tenants to convey or encumber
the whole.
Requires signatures of
both spouses to convey or
encumber.
Requires signatures of all tenants to
convey or encumber the whole.
See note at bottom
of page.
Estate passes to surviving joint
tenants outside of probate.
Estate passes to surviving
spouse outside of probate.
Upon death the tenant’s proportionate
share passes to his or her heirs by will or
intestacy.
See note at bottom
of page.
No court action required to
“clear” title upon the death of
joint tenant(s).
No court action required to
“clear” title upon the first
death.
Upon death the estate of the decedent
must be “cleared” through probate,
affidavit or adjudication.
See note at bottom
of page.
Deceased tenant’s share is
entitled to a “stepped up” tax
basis as of the date of death.
Both halves of the
community property are
entitled to a “stepped up”
tax basis as of the date of
death.
Each share has its own tax basis. See note at bottom
of page.
NOTE: Arizona is a community property state. Property acquired by a husband and wife is presumed to be community property unless legally specified
otherwise. If a married person acquires title as “Sole and Separate”, his or her spouse must execute a disclaimer deed to avoid the presumption of
community property. Parties may choose to hold title in the name of an entity, e.g. a corporation, a limited liability company, a partnership (general
or limited), or trust. Each method of taking title has certain significant legal and tax consequences. Therefore, you are encouraged to obtain advice
from an attorney or other qualified professional.
21. CLOSING THE AMERICAN DREAM.
MISCELLANEOUS INFORMATION
APPRAISALS
An appraisal is a written estimate of a property’s market value completed by an appraiser. The value is based
upon a market analysis of the prices of recent sales of similar properties in the area and the property’s physical
condition. Usually, this requires an interior and exterior property inspection.
Why is an Appraisal Necessary?
Lenders use appraisals to determine the buyer’s loan amount. The appraisal will be completed shortly after the
buyer requests a mortgage.
Appraisals and Sales Prices
• If the appraised value is higher than the sales price, there is no impact. The sales price cannot be raised.
• When the property appraises for a lower value than the sales price, the lower appraised value is used to
determine the loan amount. To complete the sale, the buyer may have to increase the down payment to
make up the difference between the appraised value and the purchase price or you may have to negotiate
a new sales price.
HOME INSPECTIONS
A standard pre-purchase inspection covers a home’s major mechanical systems, electrical, plumbing, heating,
cooling and its construction from roof to foundation, exterior to interior. Overall inspections generally do not
cover soil, pools, wells, septic systems, building code violations or environmental hazards such as lead unless
specifically requested.
REMEMBER REPAIRS OR REMEDIES ARE NEGOTIABLE; THEY ALSO CAN DERAIL A DEAL.
HOME WARRANTIES
Home warranties offer advantages to both buyer and seller. Offering a home warranty gives the buyer a sense
of security, knowing that they are protected after buying the property by paying only a deductible for certain
repairs or replacement of major mechanical systems in the home such as heating, air conditioning and major
appliances. There are a variety of plans available; we can give you information on the options, costs and
providers in your specific area.
BENEFITS OF HOME WARRANTY TO THE BUYER
• Warranty coverage for your major systems and built in appliances
• Protects your cash flow
• Puts a complete network of qualified service technicians at your service
• Low deductible
22. CLOSING THE AMERICAN DREAM.
WANTS and NEEDS List
While house-hunting, it is easy to get distracted if you choose to look at properties that do
not meet your criteria. Stay focused on what’s most important to you.
What we WANT in a home What we NEED in a home
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
23. CLOSING THE AMERICAN DREAM.
HOUSE HUNTING EVALUATION
Very often it is difficult to remember which house had the great kitchen, pool or master bath. We have provided
this evaluation form so that you keep track of the homes you have seen and what your thoughts are on them.
You can use this form to pick your “Top 5” and eliminate the rest. In today’s market, it is reasonable to assume
that the seller may have another offer when you submit your offer. Keeping track of the homes that come close
to your “dream home” will enable you to change directions quickly if necessary.
YOUR TOP FIVE PICKS
Use this Evaluation Form to rate the home according to it’s benefits and features that are important to you.
features home #1 home #2 home #3 home #4 home #5
Property
Address
Architectural
Style
Living Room
Dining Room
Kitchen
# of Bedrooms
# of Bathrooms
Additional
Rooms
Floor Plan
Additional
Features
Garage
Lot /
Landscaping
Utility
Information
Suitable
Location
Does Home
Meet Needs?
25. CLOSING THE AMERICAN DREAM.
SELLING A HOMEIT PAYS TO WORK WITH A REALTOR®
Without the professional guidance and expertise of a REALTOR®, selling a home can often entail many
unnecessary complications. The following information, as prepared by the National Association of REALTORS®,
best describes the many benefits of contacting a professional REALTOR® to handle all your real estate needs.
The term REALTOR® is a registered, collective membership mark which identifies real estate professionals who
are members of the National Association of REALTORS® and abide by its strict Code of Ethics. A REALTOR®
is bound by a Code of Ethics and pledges to protect and promote the interest of their seller by providing fair
treatment for all parties involved in the transaction.
Here are some ways a REALTOR® can help you sell your home:
• PROMOTION
• VIEWING
• NETWORKING
WORKING WITH YOU BY:
• Conferring with you regarding when you want to place your home on the market
• Establishing a sale price based on the following:
• Research of comparable properties
• Considering the current local market conditions
• Establishing your probable net proceeds
• Advertising your home and making suggestions on what you can do to make your property more sellable
• Reviewing the necessary paper work with you
NEGOTIATING THE CONTRACT BY:
• Reviewing the contract and your obligations
• Explaining contingencies and release clauses
• Explaining the legal disclosure requirements
• Explaining the ramifications of pest control inspections/reports
• Explaining your responsibilities regarding the condition of the property
• Examining offers closely and explaining the reasons behind a possible counter-offer
MANAGING AND CLOSING ESCROW BY:
• Following closely the progress of the buyer’s loan and coordinating the payoff of your existing loan
• Facilitating the appraisal process
• Staying in constant communication with the buyer’s agent to ensure a smooth escrow closing
• Closely monitoring contingency removal dates and discussing these with you
• Coordinating the details of the transaction with the escrow officer
• Making sure you get your check and settlement documents promptly after closing
26. CLOSING THE AMERICAN DREAM.
SHOWING YOUR HOME
First impressions are the most powerful sales tools. Emotion plays a tremendous part in creating an
interest in your home from a potential buyer. Make certain your home puts its “best foot forward” and
that you follow the time-tested rules and behavior that will enhance the likelihood of a sale.
OUTSIDE
• Invest in landscaping where it can be seen at first sight. A well manicured lawn, neatly clipped shrubs
and clean walks create a good first impression
• An extra shot of fertilizer, in season, will make your grass look lush and green
• Cut back overgrown shrubbery that looks unkempt and keeps light out of your house
• Paint your house if necessary. This can probably do more for sales appeal than any other factor. If you
decide against painting, at least consider painting front shutters or window and door trim
• Walks should be free of leaves, weeds, dirt and debris
• Inspect the roof and gutters, and replace any missing shingles
• Consider putting flowers outside the front door
• Repaint or stain the front door
• Put a bright coat of paint on your mailbox
• Put a new doormat out front
KITCHEN
•
This is the most important room in the house. Make it bright and attractive.
Clean your cabinets inside and out
• Clean the vent hood, the range/oven and the sink
• Scrub the kitchen floor
• Remove any extra appliances and/or knickknacks on the counters that you don’t use every day
BATHROOM
• Repair any dripping faucets; they discolor sinks and suggest faulty plumbing
• Keep fresh towels in the bathroom
• Scrub the toilet-shower, tub and caulk if necessary
• Use drain opener to unclog any slow drains
LIVING AREAS
• Have all drywall in good shape. Cracks and nail holes are easy to fix
• Check ceiling and ceiling fans for dirt
27. CLOSING THE AMERICAN DREAM.
• When painting or redecorating, stick to conventional colors
• Replace faded curtains or bedspreads
• If you have a fireplace, clean it out and lay some logs inside
• Wash your windows inside and out
• Replace any broken windows
• Replace or fix any torn screens
• Make sure all windows open and close easily
• Check all light bulbs and replace if necessary
• Check light switches and plugs to make sure they work
• Make sure all floors are clean
• Straighten all closets; well ordered closets show space is ample
• Repair sliding doors that stick
• Clean the air return vents and put in new filters
GARAGE, ATTIC AND DRIVEWAY
• Clean and organize the garage and attic, dispose of or donate anything you will not take with you
• Repair any major cracks as necessary
• Clean any oil stains
• Check garage door and service if necessary
WHEN YOUR HOUSE IS BEING SHOWN
• Keep shades open to let in light; this makes your rooms look larger
• Have your home well-lit and interior doors open for showing
• At night, turn on porch light and any exterior lighting
• Make sure all beds are made and rooms cleaned daily
• Make sure all dirty dishes are in the dishwasher, not in the sink or on the counters
• Keep toys in the kids’ room
• Keep radio/stereo/TV off
• Try to run some errands when the house is being shown
• If you are home, do not negotiate directly with the buyers
• Refer any inquiries about your home to your REALTOR®
• Take your pets for a walk when your house is being shown
• Let the REALTOR® show your house and do not tag along
28. CLOSING THE AMERICAN DREAM.
INSPECTIONS
The standard real estate purchase contract used in the State of Arizona contains a provision that allows the
buyer to physically inspect the property being purchased, either by himself or by a professional inspector or
inspectors, during the time frame as described in your purchase contract. It is the seller’s obligation to provide
the buyer access to the property during this inspection period for whatever inspections the buyer requires.
Below is a list of common types of inspections.
STRUCTURAL PEST CONTROL
• To determine any active infestation by wood destroying organisms.
• To determine whether there is any earth to wood contact,
cellulose debris or faulty grades on the property.
PHYSICAL INSPECTION
• This inspection can encompass inspection of the roof, plumbing, electrical, heating and any other
accessible area of the property.
• A detailed report or reports will be written by the inspector or inspectors with recommendations for
repairs, and same will be delivered to the buyer. Subsequently the buyer will request of the seller any
repairs that the buyer wishes the seller to be responsible for. If the seller agrees to the repairs,
they would need to be completed prior to the close of escrow.
OTHER COMMON INSPECTIONS MIGHT INCLUDE:
• Well and Septic
• Hazardous materials
• Chimney
• Heating and Cooling
• Survey
• Zoning and Building permit compliance
• Structural Engineering
HOME WARRANTIES
Home Warranties are insurance policies designed to protect a seller during the listing period and a buyer for
one year after the close of escrow, against repair costs for mechanical systems and major appliances. The cost
of a home warranty policy is a one time fee which either the buyer or the seller can pay at the close of escrow
and which is renewable annually. There are a variety of home warranty companies and plans. The plans vary
according to the optional coverage chosen by the insured which might include, but not be limited to heating, air
conditioning, dishwasher, washer, dryer, refrigerator, garbage disposals, pool and/or spa equipment.
A few of the benefits of a home warranty are listed as follows:
• Replacement or repair of major or minor plumbing, heating or electrical problems
during the policy period at a nominal service fee per incident.
• A full network of qualified technicians at your service.
• Protection of your budget against unexpected expenses for repairs or replacements of
systems in your home for the first year of ownership or subsequent years if renewed.
29. CLOSING THE AMERICAN DREAM.
THE SELLER’S EIGHT MOST FREQUENTLY ASKED QUESTIONS
Q. When do I get my proceeds check?
A. On the date of recording, you may request that your escrow officer either issue a check for your
proceeds or wire the funds directly into your bank account.
Q. Why do I have to pay interest on my loan pay-off past the day of recording?
A. Your lender continues to accrue interest to the date that they post your loan as being paid in full.
Q. When do I get a refund from my impound account?
A. After your escrow officer sends your pay-off check to your existing lender, you can expect to get
impound account back direct from your lender within 30-60 days. If you have any questions after that
time, we suggest calling your lender.
Q. When do I cancel homeowners/fire insurance?
A. Please do not cancel your insurance until you have confirmed with your escrow officer that your
transaction has closed.
Q. Why does my escrow officer require that I complete a 1099 form?
A. A 1099 form is the reporting form adopted by the IRS for submitting the information required by law.
Under guidelines established by the IRS, sellers of real property are required to have their sales price
reported on the 1099 form.
Q. What is a Statement of information?
A. Statements of information provide title companies with the information they need to distinguish the
buyers and sellers of real property from others with similar names, for the issuance of title insurance
at close of escrow. After identifying the true buyers and sellers, title companies may disregard the
judgements, liens or other matters on the public records under similar names.
Q. I don’t understand tax pro-rations. How do they work?
A. Each year on January 1st, the lien of that year’s property taxes attach to the land, pursuant to Arizona
Law. However, the lien is not due and payable until October 1st of that year for the first half of that
year’s bill and the second half of that year’s bill is not due until March 1st of the following year. Pro-
rations are done to reimburse the buyer for the portion of the year that the seller has owned the
property and has not yet paid taxes.
Q. What will I need to take with me to American Title Service Agency to sign
my documents for closing?
A. Take one of the following: Arizona Drivers License, Arizona ID card, Military ID or Passport.
30. CLOSING THE AMERICAN DREAM.
MOVING CHECKLIST
OLD RESIDENCE NEW RESIDENCE
PREPARING FOR THE MOVE ADDRESS CHANGE
_____ Leave existing keys & garage openers _____ Ask postman to hold mail for your arrival
_____ Travel funds (cash & checks)
_____ Defrost refrigerator UTILITIES
_____ Pet transportation _____ Telephone
_____ Electric
ADDRESS CHANGE _____ Gas
_____ Bank accounts _____ Water
_____ Subscriptions/magazines _____ Garbage pickup
_____ Forward address to post office _____ Cable
_____ Credit cards _____ Bottled water, propane, etc.
_____ Satellite/Cable Provider
UTILITIES SCHOOLS, LICENSES, SERVICES
_____ Telephone (check for refund) _____ Register children for school
_____ Gas (check for refund) _____ Register to vote
_____ Electric (check for refund) _____ Register car
_____ Water (check for refund) _____ Driver’s License (apply for new address)
_____ Cable (check for refund)
_____ Garbage pickup MEDICAL SERVICES
_____ Bottled water, propane, etc. _____ New doctor
_____ Satellite/Cable Provider _____ New dentist
_____ New veterinarian
DOCUMENTS TO OBTAIN
_____ Medical records
_____ Dental records
_____ School transcripts
_____ Veterinary records