If the purchase transaction continues to move forward after the inspection period, then it is time to move forward with the loan process and the lender orders the appraisal.
The financed buyer has an appraisal contingency built into the contract: the property must appraise for at least the purchase price. The cash buyer does not have the appraisal contingency built into the contract, but it can be added under additional terms and conditions if the cash buyer so desires. (not common unless it's a very specific, niche-y residential property or commercial property)
The appraisal is ordered and if it meets the contingency for the buyer, then the underwriting period begins for the financed buyer. For the cash buyer, if their custom appraisal contingency is met, then they don’t have much to do except review and accept any documents pending, then wait for the final walkthrough.
Mortgage underwriting is the process a lender uses to determine if the risk of offering a mortgage loan to a particular borrower under certain parameters is acceptable. Most of the risks and terms that underwriters consider fall under the three C's of underwriting: credit, capacity to repay, and collateral.
It is imperative that from the pre-qual stage, the buyer has not opened new credit lines, or made big credit purchases. The credit picture for the buyer must stay consistent and will be verified through the loan process, so don’t take on additional credit or incur more debt! No new cars, no new furniture. Wait until the purchase of the home is recorded.
Once all appraisal and conditions have been met, the buyer receives a loan approval. The lender then orders the Closing Loan Documents and has them sent to the title company at least 3 days prior to Close of Escrow.
The final walkthrough of the property will also be scheduled at least 3 days prior to the close of escrow. At the walk through, the buyer verifies that all corrections and repairs agreed to by the seller have been made and that the property is in substantially the same condition as when the contract was accepted. If that is not the case, the buyer will note what the exceptions are and a 3 day cure notice will be issued to the seller to make the repairs/corrections.
Once the repairs/corrections made and docs are signed, then the loan is funded and the deed is recorded. In Arizona, escrow closes upon recordation. The buyer will now receive the keys to the home and the start of a new chapter begins.
The home buying process is not a particularly complicated process, but it does have several moving parts and several entities must work together to complete it within the stated timeframe. A buyer’s agent’s duty to her/his client is to provide reasonable care and diligence in the timely execution of the terms and conditions of the Purchase Contract so the buyer gets to the closing table. The keys to the successful accomplishment of this task are open communication, acting with integrity, and dealing honestly with all parties involved.
To help you make your real estate purchase as smooth as possible, look for an agent that is pro-active, organized and efficient. Take the time to ask questions of anyone vying for the job of representing you and select based on:
expertise:market knowledge, mastery of documentation, crafting the offer, negotiations
people skills:active listening, good communication skils, good rapport between both buyer and agent
organizational skills:timely execution of timeframe deadlines
attitudinal skills:a "can do" attitude; determination to find the home that matches your criteria, with a positive, professional attitude
Good luck and Happy House Hunting!
Author:Maria Trujillo Phone: 520-971-7560 Dated: January 20th 2017 Views: 120 About Maria: Dining, entertaining, exploring and outdoor living are just some of the great things Tucson living o...
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