Earlier this week I detailed the beginnings of the purchase process here in the Phoenix real estate market, particularly as it pertains to bank owned homes. So let’s say you’ve survived that part. What comes next?

Assuming nothing in the bank addendum changed the basic timelines set out in the Arizona Association of REALTORS Residential Real Estate Purchase Contract, here’s where you go from here (and if you used a cocktail napkin for your contract then you’re on your own.):

1) FINANCING. If you’re financing your purchase, you’ll have five days to formally apply for your loan. This also is the time when you need to get any and all additional documentation requested to the lender all so your mortgage officer can order the …

2) APPRAISAL. This one almost always comes out of pocket and payment’s due at the time of the appraisal. Costs vary but you’re looking at somewhere around $150. The appraisal is ordered by your lender in the name of your lender so if for some reason you decide to switch lenders midstream you’ll need to do this again. In short, the appraisal is an opinion of the home’s value. Your loan will be for the lesser of contract sales price or appraised value so if the house doesn’t appraise, you’ve got some decisions to make.

3) INSPECTIONS. You’ll have 10 days to complete all of your inspections and due diligence. This is the time to hire a professional home inspector to check the home. These inspectors are generalists so it’s possible (if unlikely) that you’ll need additional specialists to determine the state of certain systems. You’ll also want to get a termite inspection to see if which group your home falls into - those houses with termites and those that will get them someday. Welcome to Arizona.

4) TITLE REPORT. This is sent to you by the title company and shows you if there are any irregularities in the title. This is one of those items that never seems that crucial until something strange comes up. You’ve got five days to look it over and if you don’t like what you see you can cancel the contract.

5) REPAIRS. Repairs? On a bank owned? In some cases, if repairs are needed for a loan to be approved the seller/lender may be willing to do them. Before discovering the bank didn’t own the house, Fannie Mae had taken care of a water leak, some apparent mold and had shocked the swimming pool to a lovely shade of blue to meet FHA requirements. If you’re paying cash, by the way, you are more or less on your own … but cash still works better from a leverage standpoint.

6) CLOSING. Loan docs and deeds are supposed to be signed three days before the actual close of escrow date. This tends to be a moving target in as much as for those wanting to close early, you often can sign one day and fund the next. Docs need to be notarized. If you’re local, you can do this at the title company. If you’re out of state, you’ll need a notary. And if you’re in Canada, you’ll need an attorney since attorneys are the only notaries there.

7) FUNDING. Funds must be in cleared funds - either a wire, which is the most common, or a cashier’s check. Once you’re funded, the escrow company records the deed and you’re the owner of the home.

Granted this is a high-level overview; if you have specific questions, you know where to find me.

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From Trulia Voices this past weekend:

“I’m closing on a condo tomorrow, and don’t have time for the Walkthrough, do I need to do this?”

First let’s start with the basics … the final walkthrough is the buyers’ last chance to check a property before the close. This is the time for the buyer to turn on the lights, flush the toilets, check the appliances and test the home’s air conditioning and/or heating one last time. It also is at this point that the buyer can verify if any agreed upon repairs have been completed as well as making sure the property is in equivalently the same condition as it was at the time the contract was executed.

If something’s not working that should have been fixed, or if a warranted item such as an appliance or the air conditioning isn’t working now when it worked at the time of the inspection, these issues need to be brought to the seller immediately. Because after the close, the property becomes yours in whatever condition it may be in. If you were given the opportunity for the walkthrough and you passed, the onus for repairing any broken items after the close is on you.

So is a walkthrough necessary? In a word, absolutely. Softening slightly, there is no requirement that you conduct a final walkthrough before closing on a property. But you’re taking an unnecessary risk by not doing so.

In Arizona, on purchases made with the standard Arizona Residential Resale Contract, the seller has to provide the buyer access for a final walkthrough.

The final walkthrough can be conducted by you, a home inspector (most inspectors will conduct a walkthrough inspection for a fraction of the cost of a full inspection if they already have conducted the original inspection), or a representative - typically a friend or relative. I’m about the only one who cannot conduct a walkthrough on your behalf as I’m not so licensed and such walkthroughs aren’t covered by my E&O insurance.

Have other questions about the real estate buying process in Phoenix? You always can reach us using the contact form in the upper right.

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Matthew Rathbun this morning wrote an interesting post on Agent Genius discussing the level of responsibility buyers’ agents have (or ought to have) in disclosing material issues about a property to their buyers.

Laws vary considerably from state to state. According to Matthew, sellers are not required to make any disclosures in Virginia. That’s completely different than here in Arizona - at least when the AAR Purchase Contract is used - and sellers are required to complete a six-page disclosure statement about their home.

As for the buyers’ agents … Matthew uses what seems to be a fairly obvious example, the presence of mold on the exterior of the walls.

You don’t need to be an expert in mold to be able to point out that there’s some sort of issue going on in the photo to the left. But it’s well beyond the scope of my training and licensing to be able to tell you the extent of the issue and what exactly needs to be done in terms of remediation. There are mold experts - people specifically trained in this field - who can help with that type of item.

Experience allows me to point out various items as they come up, whether they be some of the more obvious issues such as the mold above or things to consider from a resale standpoint (which comes up more often in new builds than anywhere else.)

But experience still does not make me a licensed home inspector. I will not be checking all of the plumbing fixtures, running the dishwasher, checking the oven or looking in the attic for insulation - that’s for a home inspector to do. I’m not walking the perimeter of the property looking for termite tubes - that’s for a termite inspector to do.

And at the end of the day, responsibility for due diligence in Arizona falls on the shoulders of the buyer. The AAR contract has a pair of clauses that specifically hold harmless the brokers in the event something is discovered after the fact that could have been learned through the use of professional, licensed, qualified inspectors.

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Two days ago I saw something new - a multiple offer addendum prepared by the buyers’ agent. In essence, the buyer is making offers on multiple homes all at the same time.

Normally, once a seller accepts an offer and returns to the offer to the buyer (or her agent), you’ve got yourself a binding contract. Not so in this case as the language says the contract isn’t really a contract until the buyer affirmatively signs to agree to the sellers’ acceptance.

On the one hand, it’s admirable for the buyer and his agent to let the seller know that they are writing offers on several properties at once. Most would not do that. But on the other hand, does such an addendum help in negotiations? The tone seems to be one of “take it or leave it” but that doesn’t mean the seller necessarily ought to “take it.”

Buyers in Arizona, if using the standard AAR Purchase Contract, have a 10-day inspection period during which they can cancel the contract for any reason - they need only a reason. Which is why it’s rare for a buyer or buyers’ agent to disclose multiple contract are being written. If more than one’s accepted, keep one and cancel the others during the inspection period. (Not the best scenario for sellers, but we’re talking about the buyer’s side.)

Language requiring an affirmative acceptance beyond the normal signature isn’t new - it came almost directly from AAR’s Multiple Counter Offer form. When confronted with more than one offer, the seller has the option of countering just one or countering multiple offers. Affirmative acceptance is necessary because if the seller were to counter two offers on the regular counter offer forms and both buyers accept, the seller has no way to cancel one and they now have their home under contract twice.

Multiple Counter Offers do not need to be identical. In other words, sellers can have different terms on the counter offer sent to each buyer.

The biggest risk, of course, is that all the buyers elect not to accept the counter and the seller is left still trying to find a buyer. It happens. But the best case scenario is one where there are serious buyers desiring this one home and the extra offers provide the needed leverage to get the seller a higher net than they might normally expect.

Multiples are extremely common on bank owned homes in the Phoenix real estate market these days, less so on owner-owned homes … but they still happen.

Buyers’ multiple offer addenda? Those still are blessedly rare.

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Yesterday was a first in my youth soccer coaching career. A handball was called against an opposing player and my team was awarded a free kick, which about 90 seconds later was converted into a goal.

“Timeout!” yelled the other coach, stomping onto the field. “I have an issue.” (I tend to think she had more than one issue, if you know what I mean, but I digress.)

Her argument was her player shouldn’t have been whistled for stopping the ball with her elbow. Alllllrighty then.

Later in the game we had a goal kick and I elected to have someone other than the goalie, my daughter, take the kick. “You can’t do that!” the coach screams. “It’s a goalie kick.”

Except it’s not a “goalie kick.” It’s a “goal kick” and anyone can take one. It’s even in the rules, somewhere or another. (I suggested she Google them after the game.)

This is my ninth season as a soccer coach for the YMCA. I give all the credit in the world to someone willing to volunteer their time to coach a group of kids, most strangers, and try to enrich their lives.

But getting a T-shirt that says “YMCA Coach” doesn’t really make you a soccer coach - not if you don’t know the rules.

Likewise, getting a real estate license doesn’t really make you a real estate professional - you’re not if you don’t know the rules. And the rules involve more than calculating what your commission will be based on the co-broke in the MLS.

The rules involve knowing the contract - not just knowing of it, but knowing the contract backward and forward to the point that your client won’t be disadvantaged when you run into an agent who really does know the contract.

The rules involve knowing the local MLS rules. There was a long debate in my office on Thursday about the best way of avoiding short sales in the local MLS (at the instruction of a buyer, of course.) One agent suggested a search for listings without “short sale” in the agent remarks. Which is fine, except agents aren’t required to use the words short sale anywhere in the listing.

Agents are required to mark the “Lender/Corp Approval Required” field. Not that all do. In 90 listings last week I found two dozen violations.

(Another agent argued that you may lose REOs - bank owned homes - if you exclude the Lender/Corp Approval Required field because some listings agents mark that field for these properties as well. Those agents are doing their client a disservice since there’s a separate field for Lender Owned Properties.)

None of us come out of real estate school knowing all there is to know. For all of us, there is a constant educational curve. Assuming, that is, we choose to pay attention to such things.

For many, a license is enough and the rules of the road aren’t too important, at least until they are. Just like not knowing that there’s no such thing as a “goalie kick” isn’t all that important until it becomes so.

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