Transaction Process
Appraisals and Values
Appraisals are performed by licensed professionals governed usually by a standards board like many other professions. In most financing cases an appraisal will be performed so as to give the investor or mortgage company an objective as possible value opinion based on recent comparable sales and other facts related to the property. This is the most objective manner in which to obtain values. Even when using the most objective facts and data possible, an appraisal is still subject to changing factors such as sales and markets. Realtors can perform opinions of values or CMA (comparative market analysis) which estimate a selling value and are based on recent sales and knowledge of the local market. They are not appraisals. Simply opinions. Here is the "Appraisal Foundation's" (Authorized by Congress as the Source for Appraisal Standards) website with more information for consumers: Click Here for website
Buying Your Home
The common ways of purchasing your home are by financing and cash purchase. There are other means as well such as tax-deferred exchanges, trades, etc., but primarily cash and financing are the most common. Mortgage rates are still at good interest rate levels. In Arizona a home buyer must submit a "pre-qualification" form in conjunction with the purchase offer contract. Your mortgage professional will have that form or can get if from your realtor and will fill that out for you. The pre-qual is valid for a certain period of time, ask your mortgage person for details. You can consult a bank, a credit union, local mortgage brokers, or online brokers for comparisons and options when considering buying a home. Also be aware of the credit score impact from mortgage application. Again, get with a well referred mortgage broker or your financial institution for precise answers on the process, credit and fico score impacts and requirements, and all associated questions with the process. If you are out-of-state and buying in Arizona, of course you can use your financial institution but one thing I have noticed is that occasionally there can be slower communication between mortgage and appraisal, I have seen delayed appraisals because of this. Local brokers seem to be able to be quite aware of appraisal schedules and check points within the escrow process. Not to say your out-of-state broker cannot be, just make sure the investor or financier notifies your mortgage broker or if it is a bank that they notify your realtor of appraisal scheduling so as to not delay escrow. One last note, if you are using an FHA, VA, or tribal eligibility, be in communication with your finance person, these can sometimes take a bit longer and have a few more requirements than a conventional loan. Your finance professional will have the details and information on these loans as well and your realtor will most likely have seen some of these added pieces to the escrow process.
When using cash to purchase a home, in lieu of the "pre-qualification" form as mentioned above, your realtor will submit a proof of funds or bank letter or statement to the seller with the purchase offer showing ability to close escrow. For years there was a 5 day period to submit the letter, as of this year the "AAR" purchase contract requires the proof of funds to be submitted with the offer.
Note: in both cases, cash or finance, it is customary to submit an earnest money deposit with the title company upon contract acceptance. There is no set amount, but this is another aspect to the money part of the home purchase to bear in mind.
Title Company
Title companies are entrusted to handle the escrow process. This includes holding your deposit, issuing instructions, issuing title insurance, monitoring deadlines, working with financing, pro-rating costs such as taxes or assessments, and of course closing the transaction. They have a very important role in your home purchase. In Arizona title officers handle this in other parts of the U.S an attorney may handle the escrow process and title work. Most title companies will have a legal section or department as well to help with complex situations or for clarifying issues. Here in Prescott, it is wise to have an experienced title company or officer or manager in charge. There are many old properties and irregular lot types. Local knowledge is extremely useful here.
Useful Links (These links are for your convenience only, there is no referral or vouching for links or services either explicit or implied. The affiliates list is associated with Prescott Area Association of Realtors, Paar.org, not Iannelli & Associates Real Estate)
TripAdvisor Restaurants in Prescott
What are the car registration fees in Arizona and how are they calculated?
U.S. Map with Clickable Links to Median Statistics, Harvard Joint Center for Housing Studies
