The Home Buying Process Explained

The process to purchase a home in Arizona for a Canadian citizen is much the same as for United State’s citizen.  To begin the process, here is what needs to happen (in order):

1. If you are going to require U.S. financing, you will need to start arrangements for that prior to your arrival in the U.S.:
   • Contact me for several lending options.  Once you decide who can give you the best rates and terms, they will give you a Loan Status Report (LSR). This form is necessary as any real estate contract that is written in Arizona will require this form to accompany the contract when presented.  If you are not requiring U.S. financing, you will not need an LSR (but you will be required to show proof of funds).
   • Financing is tricky in the US for Canadians and it can take much longer than a traditional mortgage – start the process of applying for you loan well in advance of your home buying trip.  Six to eight weeks is recommended.
2. If you plan on putting a mortgage on your personal residence and use the cash to purchase it here, you should have that underway before you start to look at homes.  Bring a copy of your bank statement showing the funds available or letter from your bank stating you have the appropriate amount available.
3. Prior to your coming to Arizona, weÂ’’ll have exchanged many phone calls and emails.  I want to make sure I know what it is that you want in a home and area.  We will have a lot narrowed down before your arrival here.
4. Let me know if you need some recommendations for accommodations during your visit to Arizona.  If you are planning on having the purchase happen during your stay, please make sure that you allow for at least a week’s stay.
5. Once you arrive, I will pick you up at your hotel or wherever you might be staying.  If you are unsure of the area you want to live in, then you should plan on 3 days for touring the city and deciding on an area (we can absolutely do it in less time though).
6. Upon your decision of a particular property, we will begin the contract process:
   • Determine the value of the home vs. the offer you want to submit
   • Write the offer & submit to the seller with your earnest money deposit (usually 1% of the sales price rounded up. i.e. $375,000 sales price = $4,000 earnest deposit).
   • Once the offer is received, the seller generally has 24 hours to either accept, counter offer or reject your offer.  If itÂ’s a bank-owned property or “short sale” the acceptance period will be longer.
   • Upon acceptance of a mutually agreeable contract, we will open up escrow with our title company.  This is when your $4,000 is deposited with the escrow company.  The money is fully refundable to you until the Buyer Inspection Period (generally 10 days) is over.  Once contingencies have been removed, your money goes “hard.”
7. When escrow has been opened, the following things take place with the Title and Escrow Company:
   • Earnest money to be deposited with Escrow & Title Agency in U.S. Dollars via wire transfer (must take exchange rate and bank conversion fee into consideration so that sufficient funds are deposited).  We have excellent resources for currency exchange; generally much better than even your own bank will give you.
   • Title Commitment will be issued disclosing status of title along with copies of documents pertaining to subject property such as Covenants, Conditions, and Restrictions.  This documentation may be sent to Buyer via e-mail.
   • You will receive an opening letter with contact information for Escrow Agent along with Escrow Instructions, Buyer Information Request, and Buyer Identity Statement forms, to be completed, signed, and returned to Escrow Agent for processing the file.
   • You will need to choose how they are taking title to subject property. There are several options in Arizona.  If Buyer will be taking title in a Canadian Trust, a complete copy of the Trust must be submitted to Escrow Agent in advance of the closing date to allow sufficient time for review and approval by the underwriter.
   • Buyer must obtain homeowners insurance to be in place effective with the close of escrow date. If a cash sale, Escrow Agent does not need to be provided with Evidence of Insurance. If a loan is being obtained from a U.S. Lender, the Buyer will generally provide the Lender with their insurance agentÂ’s contact information and Lender will order an Evidence of Insurance with the proper mortgagee clause.
8. At this time we will start undergoing the inspections.  You will be provided with several companies in which you can choose from to do a complete home inspection and also Termite inspections.  A home inspection is not mandatory, but it highly recommended so you know the condition of the home you’re going to purchase.  A Termite Inspection is required by the State of Arizona for all home purchases to make sure that you are not buying a home that has any wood destroying organisms.  You will also be given a “Seller Property Disclosure Statement” (SPDS) during this time to assist you in determining the condition of the property:
   • It is common in Arizona for a termite inspection to reveal the presence of termites.  If they are found during the inspection period, then we will request that the seller treat the termites as well as provide you with a 1 – 2 year warranty.
   • If other things are found wrong with the home (not cosmetic items), then you may also ask the seller to make repairs or give you a credit for you to do the repairs yourself.
   • Any requests for repairs will be done within 10 days of contract acceptance on a form called the “Buyer Inspection Notice and SellerÂ’s Response” (BINSR).  Once the BINSR is delivered to the Seller, they have 5 days in which to respond.
   • During this period they Buyer may elect to cancel the contract if the Seller is unwilling to make requested repairs.
   • If the home is NEW, then Step 8 is not required since all new homes are covered by the Builders Warranty.
9. Within a few days before the scheduled close of escrow, the Buyer and their Agent will perform a final walk thru to make sure that all of the agreed upon repairs have been made.  Once done, the Title Company will be instructed to proceed with the final closing documents.
10. Your funds should be wired to the title company 3 days prior to close of escrow.  On the closing day, the ownership documents will be recorded with the County Recorder’s Office and you will be given the keys to your new home!