Steps to understanding the home selling process in Arizona
Selling a home in Arizona | Steps to understanding the home selling process. Once you have a negotiated offer and acceptance on the home you are selling many wonder what comes next. The buyers and their agent will be working to move the sale forward and it is important that you as the seller also understand the process and next steps. We have put together a list of items that you can expect from the buyers and other partners in the transaction such as title company, inspector, lender, etc.
Congratulations – you are selling a home in Arizona – Now What?
Now that you have an accepted offer what comes next? If you are like most people your head is spinning and you feel somewhat out of control with everything that needs to be done. Here are some steps to help you understand the process and hopefully take some of the stress out of the transaction.
- The buyer will deposit earnest money funds with the title company to open escrow. You should receive a receipt verifying the funds have been received. The title company will also send a preliminary title report to the buyer and seller agents within three days. That preliminary report will show any liens or outstanding items that must be cleared up prior to closing. Often it is taxes that will be due but are unpaid, HOA fees and any other issues that may impact closing. Sometimes a trust owns the home and the title company will request copies.
- The seller property disclosure statement (SPDS) and insurance claims history (CLUE) are due to the buyer within five days of contract acceptance. If you haven’t already provided these to your listing agent you should do so promptly.
- The buyer will order inspections. Normally in Arizona a home and termite inspection are ordered and if the home has a pool most likely a pool inspection will be ordered. The buyer has ten days to complete all inspections and formally request any repairs. If the inspector discovers issues they may recommend additional inspections (HVAC, roof, plumbing, electrical…). It is best if the seller is not at home during the inspection. This is the buyer’s time to conduct due diligence and the process normally takes about three hours depending on the size of the home. The buyer and their agent will receive a written inspection report detailing the findings. The buyer’s agent will meet with the buyers to determine the repairs that they may request that you address. The form that will be addressed on is the BINSR (Buyer Inspection Notice Seller Response). You will have five days from date of receipt to respond. You have three choices. Accept all requests and make the repairs, accept some but not all of their requested repairs or reject all requests for repairs. Some buyers will be in agreement to accept a cash allowance at closing in lieu of repairs. Your listing agent can address these items more specifically.
- LSU – if the buyer is financing your listing agent should request a loan status update periodically throughout the transaction to ensure that the loan underwriting is on track. Loan documents are required to be at the title company at least three days prior to close of escrow to avoid a breach of contract. The last thing you want to do is discover during the last week prior to closing that the loan has not been approved and the documents will not arrive timely. The Arizona purchase contract requires a loan status update within 5 days of contract acceptance and periodically after that as requested.
- Appraisal – if the buyer is financing the lender will order an appraisal. It is important that the home appraise at the agreed upon purchase price. Most lenders on a conventional loan will lend 80% of appraised value. If the home appraises for less than the purchase price the buyer may request that you lower your price to appraised value. If they make that request and you do not agree they can cancel the contract with earnest money returned. Your listing agent should be knowledgeable with your property, any upgrades and improvements as well as most recent comparable sales in your area.
- HOA documents – if your home is in an area with a homeowner association the buyer will receive documents with the covenants, conditions and restrictions also knows as CCR’s as well as a statement showing any liens on the property from the HOA and all monies that will be due at closing including transfer fees, capital improvement or other HOA fees.
- If the buyer has requested a home warranty that you will pay for at closing chances are they will be ordering that policy and the funds will be deducted on your side of the transaction at closing. Title will send a HUD1 form several days prior to closing showing the amount that you will receive at closing. Review that carefully to make sure there are no errors.
- Notify utility companies – once the inspection and appraisal are done you can move ahead with notifying the utility companies of the sale date and provide them with a forwarding address. The buyer will also be calling to open service in their name as of the date of closing. You might also want to put in a change of address form with the post office at this time.
- Signing of documents – In Arizona both buyers and sellers generally sign documents ahead of the closing date and it is done through the title company. The title officer will call you to schedule a time to come in and sign unless you are out of town in which case they overnight documents to you to sign in front of a notary and return.
- Repairs and final walk through – the buyers will generally conduct a final walk through of the property 2 or 3 days prior to closing to ensure the home is in the same condition as when they made the offer. Any requested repairs will also be examined and you should have all repair receipts and any warranty information available to the buyer at that time. The Arizona purchase contract requires that receipts be provided at least 3 days prior to closing. In some cases the buyer may ask the inspector to come back out and ensure that all repairs were done as requested. It is a good idea to have the agents agree by this time on where the home manuals, keys, codes, etc. will be left. Don’t forget to provide the buyer with the garage keypad code if you have one.
- Closing day – in Arizona closing is a formality. All parties have generally signed and title will ensure funds are delivered, review the file and then release it to the county to record. As soon as we have recording notification the home is the buyers and they have possession unless agreed on otherwise in the purchase contract.
Thinking of selling your home in Arizona?
Selling a home can be a daunting and overwhelming task but with a good listing agent who will communicate with you frequently it should run fairly smoothly. The Kolb Team specializes in working with buyers and sellers in active adult communities in the East Valley of Phoenix. Our niche is Chandler, Gilbert and Sun Lakes Arizona. With many years of expertise and knowledge of the area we would be happy to represent you in providing a competitive market analysis of your home and helping you better understand the home selling process. Call us at 480-440-0849 or fill out this simple form below and we will be happy to contact you.