Buying Your First Home in Phoenix, Arizona Part 7 - Closing and Moving!

Well, you did it. Congratulations! You're just a few days away from moving into your first home! The details here cover the last things you need to attend to before you can move in.

Anywhere from a few days to a week prior to closing, you and your real estate agent should do a final walkthrough of the property. Often pressed for time as the closing day draws near, buyers can be tempted to pass on the final walkthrough. It is never a good idea to skip the final walkthrough, and failing to do one can be a critical mistake.

Do not assume, prior to closing, that all the repairs you requested have been completed. Walk through the house and make sure everything has been done, and double-check that nothing else has changed. Once you buy the house, any remaining problems are yours! Be sure to request repair receipts from the seller if repairs were done.

Three types of walkthroughs

• Vacant homes
• Occupied homes
• New builds

Sellers often move out before closing, and in such situations, it is even more critical for you to do a final walkthrough. Problems tend to arise when homes sit vacant, even for a short time. Take your time inspecting the home for anything out of the ordinary, from a pest infiltration to vandalism that may have occurred between the inspection and closing day. 

Sometimes the sellers don't move out until the closing day or even a few days later. In that situation, the buyer should do their final walkthrough while the seller is present. This allows the buyer to ask the seller any final questions, such as how to operate the sprinkler system, heating cooling system, alarms, etc.

This is also a good time to ask the seller for their new address, so you can forward any mail. Ideally, you'd like to stay on friendly terms with the seller because you never know when you might need to get in touch with them.

Before you close the deal on your new-build home, you should perform a walkthrough inspection. This is a lot like inspecting anything you might buy. You smell and squeeze the fruit at the grocery store and walk around a new car in the dealership to look for blemishes in the finish, right? So you want to go over your new home with a fine-tooth comb to make sure you are getting what you paid for.

People often underestimate the time a walkthrough inspection takes. It should take an hour or two, depending upon the size of the home and the number of appliances, doors, and other mechanical devices to be checked. Rushing through a walkthrough can cost you big bucks. The written report at the end of the inspection is extremely important because it details things that are defective or incomplete, but also states all the things that are in perfect or good condition at the time of the walkthrough. Your signature and the builder's signature (or that of his representative) will prevent later arguments. With a signed inspection report, neither of you can later say, "That crack in the ceiling was there before you moved in."

Closing on Your Home

Closing, or settlement, of the purchase transaction and mortgage loan is the final step on your road to home ownership. This is when the ownership of the property is transferred to you, the buyer. Closing can be confusing, since the details (including which documents and fees are required, who conducts the meeting, and even who attends the meeting) often vary from state to state and from lender to lender. A general understanding of the transaction will help prepare you for your closing.

The estimated closing date is set during the negotiation phase of the purchase, and the actual closing usually occurs several weeks to a month after the offer is formally accepted. You want to make sure your closing takes place before the loan commitment expires, but leave time for all the necessary paperwork to be assembled. Most lenders typically need 3 to 5 days' notice to prepare the loan papers and get them to the closing agent. If any repairs were agreed to in the sales contract, you must also allow enough time for them to be completed.

You should have received a "good faith estimate" of your closing costs from your lender within a few days of filling out your loan application. This estimate includes fees charged by the lender and other parties involved in the sale. Three or more business days before your scheduled closing, the escrow agent will ask you to review your Settlement Statement, which will provide the actual amount you need to bring with you to the closing. Personal checks are seldom accepted, if ever, so you'll probably need to be prepared with a certified or cashier's check. Today, most people wire finds directly to the escrow account.

Closing Costs

Loan origination fees refer to the lender's administrative costs. Points are a form of pre-paid interest paid to the lender to make up the difference between competitive mortgage lending rates and market interest rates in other investment fields. One point equals one percent of the loan amount. A borrower can offer to pay a lender points as a way of reducing the interest rate on the loan, potentially obtaining a lower monthly payment in exchange for this up-front payment. Other names for points include: discount fee, commitment fee, warehousing fee, and funding fee.

Who pays the points

• Conventional Loans: As written in the contract. Points can be paid by the buyer, the seller, or split between the two.
• FHA Loans: The buyer usually covers the loan origination fee, but the discount fee can be paid by the buyer or seller.
• VA Loans: The buyer usually covers the loan origination fee and the funding fee, but the discount fee may be paid by the buyer, the seller, or split between both of them.

Advance payments to the lender usually include mortgage interest (accrued between the closing date and the date of your first payment), the first year's hazard insurance, and the first year's PMI, if required.

These fees cover the title search, preparation of the closing documents, and transfer of the title. Buyer will incur a one-time fee for the owner's title insurance and the lender's title insurance.

These fees cover recording the Deed of Trust (mortgage) and the grant deed. Additional taxes for transferring the property and notary fees may also apply.

Documents related to the closing

• Settlement Sheet - This is the itemized list of closing costs your lender made available to you the day before your closing.
• Truth-in-Lending Statement - You should have received this document a few days after applying for your loan. This statement outlines the cost of your loan, gives you the APR (annual percentage rate), and defines the terms of your loan and the amount of payments.
• Mortgage Note - The mortgage note is legal evidence of your promise to repay your loan according to all agreed-upon terms. It includes the amounts and dates of payments, as well as the penalties for failure to make these payments.
• Mortgage - The mortgage is the legal document giving the lender a claim against your house if you fail to meet the terms of the mortgage note. The mortgage restates the terms stated in the note and lists your responsibilities according to the terms of the agreement. Remember that although you have possession of the property, the lender shares ownership with you until you have fully repaid your loan, and can demand full payment of the balance of the loan or foreclose on the property if you default on your loan.
• Affidavits - You will receive a number of other documents to sign at closing. Some are required by law; others are lender requirements. For example, your lender might have you sign an affidavit of occupancy, stating that the property will be your primary residence. Your lender should be able to explain any documents you are asked to sign.
• Deed - This is the document that transfers ownership to you. The deed is in your name and is signed by the seller at closing. You'll receive a copy of the deed at closing, and the original will be sent to you after it has been recorded.

Who Attends the Closing

Most of the people involved with the purchase of your new home will probably be present at the closing, although in certain areas of the country, the loan officer and the buyer meet with the escrow agent separately from the seller. Often, the buyer's agent and lender will be present at the closing to answer any questions the buyer may have.

Following the closing meeting, the keys to your new house are presented to you.

THE MOVE: Do-it-yourself vs. a moving  company?

The first thing you have to decide is whether you (and all of your closest friends) will rent a truck and do it yourself, or if you will hire a moving company. Get estimates from moving companies and brawny guys who can help you do the heavy lifting. Compare the cost of movers versus how much of your time and energy the packing and moving will take. Some people have more time, while others have more money to spend. Make sure to book your reservations as far out as two months ahead to insure availability.

Movers can be very expensive, so here are some ideas for getting the best quotes possible from your moving company:

• Decide, before you call the movers, which things you will keep and what you will toss or donate.
• Determine whether or not you want your movers to pack your belongings before you pick up the phone and call for an estimate. Movers usually charge extra to help with the packing. Decide ahead of time whether you really want them to pack for you before getting that estimate.
• Make sure to note any unusual or awkward situations to keep the estimate as accurate as possible. Tell the moving company about any potential parking problems, road access issues, restrictions on delivery times, etc. Be sure to mention any stairs or elevators they'll need to deal with.
• Call around to the different moving companies and gather estimates. Make sure to ask to have a representative visit your home and do a survey of your moving situation so they can provide you with a written estimate. Legitimate moving companies are familiar with this part of the process. A bogus or low-end moving company may try to avoid this part of the transaction.
• Ask for the movers' DOT license number. Movers are required by law to be licensed. Any company unwilling to provide this license number is likely a scam.

There you have it all - How to Buy your First Home in Phoenix Arizona.  Good luck and enjoy the process of  buying your first home!