This is the follow up to my original post, "How do I buy a home".

So now you've found a home, made an offer and it got accepted.  Now what happens. 

Well the first step is to open escrow, with earnest money.  Earnest money is the equivalent of a security deposit to show the sellers that you're serious about purchasing their home.  The amount of the earnest money deposit varies depending on your market.  Your Realtor will be able to advise you on the amount to state for your earnest money.

After you've opened escrow you and your agent need to schedule the home inspection.  Your Realtor should have a list of licensed home and termite inspectors if you don't already have one in mind. Inspection periods vary from state to state, but ours in Arizona is a 10 day inspection period, although the timeframe can be negotiated if the buyer needs more time to complete the inspections.  It's best if you and/or your Realtor can attend the inspection.  Personally I like my buyer clients to hear and see first hand the findings the inspectors have uncovered.  What looks awful in a picture or written report often appears minor when viewed first hand.

Once the inspections are complete you and your Realtor will discuss which repairs discovered through the inspection (if there are any necessary) that you would like the sellers to make to their home. Once submitted to the sellers they have the option to make all requested repairs, only make selected repairs of their choosing, or not make any repairs at all.  If they choose to make all repairs the transaction proceeds forward.  If not, you need to decide if you wish to proceed.  At this point you have the opportunity to cancel the transaction and receive you earnest money back in full. 

The next step in the process would be to have your lender order the home appraisal.  The appraisal is done by licensed appraisers hired by the bank.  The buyer has no control over who does the appraisal.  The appraisal is an objective estimate of the home's current value, although appraisals can vary from appraiser to appriaser.  We usually wait until the inspections are done and both sides have agreed to any repairs so as not to waste the buyer's money should the transaction be cancelled at the inspection phase.  Appraisers are in short demand these days, so an appraisal can take a while to be completed. So try to get this ordered as soon as possible so as not to delay the close of escrow.

If the appraisal comes in at the agreed upon price then the transaction moves forward. If not, the buyer and seller need to come to an agreement as to who will make up the difference, ie. the seller reduce the price to the appraised value or the buyer put more of their own cash into the transaction or some combination thereof.  The seller also has the option of challenging the appraisal.  Sometimes these challenges are successful, but most of the time their not.  The buyer also has the option of cancelling the transaction if the seller does not agree to reduce the price of the home to the appraised value.

During the inspection period and appraisal process the buyer should recieve Seller's Property Disclosure Statement and home owner's association covenants codes and restrictions (if the home is within an H.O.A. community) for review.  If they buyer finds material factors in the property disclosure statements or the C.C.& R's that they do not approve of the buyer may cancel the deal.

When the appraisal process, inspections, and disclosure reviews are complete the lender is now in control.  BE PREPARED!!!  The home loan process will be grueling, aggravating, frustrating, irritating, and any other adjective to describe agitation you can think of.  They will ask you for more and more and more information right up to the end, no matter how many homes you've purchased in the past, no matter how good your credit is, no matter how many assets you have.  JUST BE PREPARED!!!! And don't let the process get the better of you. It will be over soon.  Patience is a virtue in this instance.

Just before going to the closing table you and your Realtor will conduct a final walk through of the home.  This is done to insure that all the requested repairs were completed (in addition to receipts/invoices provided by the sellers) and to make sure nothing has been removed (ie. appliances) that should not have been removed or changed.  Also, it's done to make sure nothing has happened, like a burst pipe that floods the home, a fire, vandalism, etc.

Now that the loan process is complete and you've received final approval from the underwriter with no conditions you move to the signing table.  You and your Realtor will set an appointmen with the escrow/title company to sign all of your loan and title documents.  I like to attend my client closings to answer any questions they may have or provide any missing information to the escrow officer. AND in my opinion, it's just part of being a professional, following the tranaction to the very end.

After you've signed documents the escrow officer sends the loan package back to the lender for final review.  Once that's done funds are wired into escrow and the transaction is sent to the local county recorder's office for recordation.  When we get the call from the escrow company that everything has recorded the home is officially yours! You can then meet your Realtor at the home to receive all keys and garage door openers and begin making the house your home.

Of course their are hundreds of variables and different situations that can and have arisen throughout the home buying process, but this post covers most of the basic.

If you have any questions feel free to call me at 602-334-3757 or e-mail:

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To search for available homes for sale go to: www.JWMurphy.LongRealty.com