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Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
Contact Me

Tucson Real Estate - Home Buying 107

The final step in buying a home is Close of Escrow (COE). This is where everything comes together.

At COE all the instructions from the buyer, seller, lender, listing agent, and selling agent come together into what is called Closing Documents. The offer, counter offer, buyer inspection notice, seller response, appraisal have all been completed. In Arizona any repairs are required to be completed three (3) calendar days prior to COE. Loan documents are required to be submitted to the escrow officer three (3) calendar days prior to closing. There are still a few last minute things to do prior to closing.

Lender

Double check one to two weeks prior to closing to make sure that the lender has received all required information. Many times lenders will ask at the last minute for latest pay stubs, proof of paying off a credit card, confirmation of alimony payment, proof of insurance on the home, road maintenance agreements, etc. Following up early gives the buyer time to get information to the lender on time. Most lenders send all final paperwork to an underwriter. A vast majority of the time the underwriter asks for more information.

Do Not Charge large items after the loan begins. I and many other Realtors have experienced incidents where a buyer purchases a car after being approved, or buy furniture for their home on a charge card. Underwriters will require the loan officer to run a last minute credit check. If those items appear that change your credit ratio, congratulations you have new furniture. Unfortunately, you have no home to put them in. Loan denied. In on incident the husband bought a new Mercedes and didn’t tell the wife. He may still be sleeping in the car.

Assuming that the lender has everything they need can cause frustration and anxiety when you cannot close on the sale of your home. Most loan officers are on top of everything. They are human like the rest of us, unfortunately. So, working close with your lender in final days of escrow can save headaches and save your loan. Check with your loan officer to insure the appraisal has been received and for at least the purchase price.

Appraisal

In Arizona the Residential Purchase Contract has an appraisal clause requiring the home to appraise for the purchase price as approved by the lender. Cash buyers are not protected under this clause. In my blog about writing the contract I talked about writing that clause in for cash buyers.

Walk Through

Buyers are encouraged to conduct a walk through inspection at least within three (3) days prior to COE. This is not a new inspection. This is to check and make sure repairs are complete. If you are an out of state buyer, pay the home inspector to go back and double check repairs. Again, don’t assume everything has been completed.

Utility and Service Transfer

Calls to all the utility and service providers should be completed a week prior to COE. Normally a paper transfer is what most providers require.

HUD-1

What in the world is a HUD-1? This is the final break down of all the costs and proceeds. This document will let you know exactly how much money you need to bring to the table. Reviewing this document at least 24 hours prior to COE allows time to have mistakes corrected and research any inaccuracies.

Proof of Funds

Notice I mentioned what has to be brought to the table. Law requires proof of funds. A personal check will take up to 10 business days (Mon-Fri excluding weekends and holidays) to clear. Money Orders and Cashier checks clear in 1 business day. Wired money to the escrow company is instant. Wired money requires some time and transfers. Its to complex to explain here, just know that wiring the money the day prior to COE when you sign documents is the best way. There is normally a bank fee associated with wire transfers. Cashier’s checks and money orders are the next best method. Personal check may not be accepted unless a very small amount. Find out early what is best for you.

Signing Documents

Signing of documents should occur at least one (1) days prior to COE. Preferably two (2) days prior. This allows time for all the required signed documents to be returned to the lender, generally underwriter, for final review and release of the loan money to the title/escrow company. If the underwriter has a stack of approvals to review and yours comes in late, what do you think your chances of closing on time are? Imagine a Friday closing before a 3 day holiday weekend, and the moving company is delivering your furniture Saturday. Your loan may not receive final approval until Tuesday if you sign late Thursday or Friday morning. Here’s where my six P’s apply (Proper Prior Planning Prevents Poor Performance). My other favorite saying is, “Procrastination on your part does not mean an emergency on my part.” Moral of the story, sign early to save headaches. There have been numerous incidents where documents have been sent back for re-signing. Two to three days prior to COE helps reduce the risk.

Before going in to sign documents write down all the conditions you need to check. Loan amount, selling price, agreed assistance, home warranty, proceed hold back if repairs not completed (rule of thumb not Gospel is 1-1/2 times the cost of the repairs), spelling of names, parcel number, address, form of taking title, and anything else you feel important. Don’t expect to remember everything when sitting down to sign papers. Having a check list will be a big help.

Receipt of Keys

In Tucson the home does not become the buyer’s home until it records with the Pima County Recorders Office. Normally that occurs between 3:00 PM and 4:00 PM on the Close of Escrow date. Being prepared helps. Make arrangements to pick up keys or have them delivered. Love clients I met with yesterday. They refused to accept the keys to their newly purchased home until I sat for a moment and relaxed to have a Margarita with them. Gotta love it. Any more home buyers out there like these great people? Call me. The sad part is working with great people, getting them into their home, and then you don’t have that daily contact with them. I stay in touch periodically with all my clients. They are all great people.

Now that you have everything you need, get a loan, find a Realtor you feel comfortable with (I prefer me), find a house and make an offer.

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This entry was posted on Friday, June 29th, 2007 at 7:22 am and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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