Buyer FAQ Guide

Your home buying budget depends on several factors:

The 28/36 Rule:

• Housing costs should not exceed 28% of gross monthly income
• Total debt (including housing) should not exceed 36% of gross income

Key Components:

• Down payment: Typically 3-20% of purchase price
• Credit score: Higher scores get better interest rates (740+ is ideal)
• Debt-to-income ratio: Lenders prefer 43% or lower
• Employment history: Stable 2-year work history preferred

Phoenix-Specific Considerations:

• HOA fees: $200-$500+ monthly in many communities
• Higher utility costs: Summer AC bills can run $300-$500+
• Pool maintenance: $100-$200 monthly if home has a pool
• Property taxes: Relatively low compared to other states (around 0.6-0.9% of home value)

I'll connect you with trusted local lenders who can provide accurate pre-qualification and help you understand exactly what you can afford.

Pre-Qualification (Basic Estimate):

• Quick assessment based on self-reported financial information
• No verification of documents
• Takes 15-30 minutes
• Not sufficient for making offers in competitive markets

Pre-Approval (Verified & Strong):

• Lender verifies income, assets, credit, and employment
• Requires documentation: tax returns, pay stubs, bank statements
• Takes 1-3 days to complete
• Shows sellers you're a serious, qualified buyer
• Essential in Phoenix's competitive market

Down payment options vary by loan type:

Conventional Loans:

• Minimum 3% down (first-time buyers)
• 5% down (typical minimum for repeat buyers)
• 20% down avoids PMI (private mortgage insurance)
• Better interest rates with larger down payments

FHA Loans:

• Minimum 3.5% down
• Lower credit score requirements (580+)
• Requires mortgage insurance for life of loan

VA Loans (Veterans):

• 0% down payment required
• No mortgage insurance
• Competitive interest rates
• Popular in Phoenix due to military presence (Luke AFB)

USDA Loans (Rural Areas):

• 0% down in eligible rural areas
• Some outer Phoenix metro areas qualify (check eligibility)

First-Time Buyer Programs:

• Arizona Housing Finance Authority offers down payment assistance
• Home in Five Advantage: Up to 5% down payment assistance
• Income limits apply

Expect 2-5% of purchase price in closing costs:

Loan-Related Fees:

• Origination fees (0.5-1% of loan)
• Appraisal ($500-$700)
• Credit report ($25-$50)
• Discount points (optional, to lower interest rate)

Title & Escrow:

• Title search and insurance ($1,000-$2,000)
• Escrow fees (typically split with seller)
• Recording fees ($100-$200)

Inspections & Reports:

• Home inspection ($400-$600)
• Termite inspection (often required, $100-$200)
• Pool inspection ($150-$300 if applicable)
• HVAC inspection ($100-$200, recommended in Phoenix)

Prepaid Items:

• Homeowners insurance (first year prepaid)
• Property taxes (prorated)
• HOA dues (prorated if applicable)
• Prepaid interest

You can negotiate seller concessions to cover some closing costs, though this is less common in competitive markets.

Finding your perfect Phoenix home requires strategy:

Define Your Priorities:

• Must-haves vs. nice-to-haves
• Preferred neighborhoods and school districts
• Commute considerations
• Lifestyle factors (walkability, amenities, outdoor spaces)

Phoenix-Specific Considerations:

• Pool: Essential for many, but adds maintenance costs
• Garage: 2-3 car garage protects vehicles from intense sun
• Outdoor living: Covered patios are valuable year-round
• Energy efficiency: Important for summer cooling costs
• Lot orientation: North-facing backyards stay cooler

My Role:

• Set up custom MLS searches matching your criteria
• Provide instant alerts when new listings hit the market
• Schedule showings at your convenience
• Offer neighborhood insights and comparative market analysis
• Identify potential issues before you make an offer

Phoenix metro offers diverse neighborhoods for different lifestyles:

Urban/Central Phoenix:

• Arcadia: Tree-lined streets, walkability, excellent restaurants, premium prices
• Biltmore: Upscale, resort-style living, luxury homes
• Downtown Phoenix: Urban condos, walkable, arts and culture
• Roosevelt Row: Artsy, younger demographic, revitalizing

East Valley:

• Scottsdale: Luxury living, golf courses, resorts, excellent dining
• Tempe: University town (ASU), diverse, more affordable
• Gilbert: Family-friendly, highly rated schools, master-planned communities
• Chandler: Tech hub, good schools, suburban feel
• Queen Creek: Newer development, larger lots, value-oriented

West Valley:

• Glendale: Affordable, sports venues, growing area
• Peoria: Family-oriented, spring training, active adult communities
• Surprise: Retirement-friendly, more affordable, growing rapidly
• Goodyear: New construction, master-planned, family-focused

North Phoenix/Cave Creek:

• Paradise Valley: Ultra-luxury, large estates, mountain views
• North Scottsdale: Desert lifestyle, hiking access, luxury homes
• Cave Creek/Carefree: Rural feel, horse properties, unique character

I'll help you explore neighborhoods that match your lifestyle, budget, and priorities, providing detailed market data for each area.

New Construction Advantages:

• Everything is brand new with warranties
• Modern energy-efficient features (critical in Phoenix)
• Customize finishes and options
• Builder incentives and financing deals
• Master-planned community amenities

New Construction Disadvantages:

• Higher price per square foot
• Construction delays (3-12 months typical)
• Bare landscaping and no mature trees
• HOA fees often higher
• Less room for negotiation on price

Resale Home Advantages:

• Established neighborhoods with character
• Mature landscaping and trees (valuable in Phoenix heat)
• Move-in ready, immediate occupancy
• More negotiating power on price
• Better value per square foot
• Existing amenities (pools, outdoor spaces already done)

Resale Home Disadvantages:

• Potential for deferred maintenance
• May need updates or repairs
• Older systems (HVAC, roof, water heater)
• Less energy-efficient (higher utility bills)

In Phoenix's market, a strong offer includes:

Price:

• Based on comparable sales, not asking price alone
• In multiple offer situations, may need to go above asking
• Consider escalation clause (offer to beat competing offers up to a limit)

Earnest Money:

• Typically 1-3% of purchase price
• Shows you're serious and committed
• Applied to down payment at closing

Contingencies (Keep Minimal):

• Inspection: Standard 10 days, shorter is more competitive
• Appraisal: Required for financing, but can offer to cover gap
• Financing: 30 days typical, cash offers strongest
• Sale of current home: Weakest, avoid if possible

Closing Timeline:

• 30-45 days standard
• Flexibility to match seller's needs can win offers
• Quick close (14-21 days) appeals to many sellers

Additional Sweeteners:

• Personal letter (use sparingly, less common now)
• Waive some repair requests
• Cover some seller closing costs
• Rent-back option if seller needs extra time

The inspection period is your due diligence window (typically 10 days):

Home Inspection:

• Comprehensive evaluation of home's condition
• Structural, electrical, plumbing, HVAC systems
• Roof, foundation, windows, doors
• You should attend to ask questions

Phoenix-Specific Inspections:

• HVAC: Critical in Phoenix - verify age, condition, efficiency
• Pool/Spa: Equipment, plumbing, surfacing, safety compliance
• Roof: Sun damage, remaining life, warranty status
• Termite: Required by most lenders

After Inspection:

• Review report with your agent
• Decide: proceed as-is, request repairs, or cancel
• Submit repair request if needed
• Negotiate with seller on repairs or credits

Reasonable Repair Requests:

• Safety issues (electrical, structural, gas leaks)
• Major system failures (HVAC, water heater, roof leaks)
• Code violations

Unreasonable Requests:

• Cosmetic issues (paint, flooring preferences)
• Minor wear and tear
• Personal preferences or upgrades

Appraisal issues can derail deals. Here are your options:

Understanding Appraisals:

• Lender requires appraisal to ensure home is worth loan amount
• Independent appraiser evaluates property
• Based on recent comparable sales in area

Prevention:

• Work with experienced agent who prices offers accurately
• Avoid offering significantly over asking in marginal markets
• Have pre-approved financing ready to cover potential gap

Closing (also called settlement) is the final step:

Before Closing Day:

• Review Closing Disclosure (received 3 days before)
• Verify all numbers match expectations
• Complete final walk-through (24 hours before closing)
• Ensure repairs were completed
• Check that home is in agreed-upon condition
• Verify appliances and fixtures remain
• Wire closing funds to escrow (not personal check)

At Closing:

• Sign loan documents
• Sign deed and title transfer
• Pay closing costs and down payment
• Receive keys and garage remotes
• Get copies of all signed documents

Bring to Closing:

• Government-issued photo ID
• Proof of homeowners insurance
• Cashier's check or wire confirmation

After Closing:

• You own the home immediately
• Change locks for security
• Transfer utilities to your name
• Update address with USPS, DMV, etc.

First Week Priorities:

• Change all locks and garage codes
• Test all HVAC systems (critical in Phoenix)
• Locate main water shut-off and electrical panel
• Test smoke and carbon monoxide detectors
• Document home's condition with photos/video

Phoenix-Specific Tasks:

• Schedule HVAC maintenance (change filters, inspection)
• If pool/spa: Get pool service or learn maintenance routine
• Inspect irrigation system and adjust timers for season
• Check attic insulation and ventilation
• Install programmable thermostat if not present

First Month:

• Meet your neighbors
• Learn HOA rules and contact info
• Establish lawn/landscaping maintenance
• Set up pest control service (scorpions, termites common)
• Register for HOA amenities if applicable

HOAs are extremely common in Phoenix metro (60-70% of properties):

HOA Benefits:

• Community amenities (pools, fitness centers, parks)
• Maintained common areas and landscaping
• Consistent neighborhood appearance
• Property value protection

HOA Drawbacks:

• Monthly/annual fees ($100-$500+ monthly)
• Rules and restrictions (paint colors, landscaping, parking)
• Potential special assessments
• Limited flexibility on exterior modifications

Key Questions to Ask:

• What are the monthly/annual fees?
• What amenities are included?
• Any pending special assessments?
• What are the restrictions (pets, rentals, RVs)?
• Is there pending or past litigation?
• Are reserves adequately funded?

You'll have 5-10 days to review HOA documents and cancel if unsatisfactory.

HVAC System (Most Critical):

• Age and condition - units over 12-15 years are near end of life
• SEER rating - 14+ recommended for efficiency
• Proper sizing for square footage
• Dual-zone systems for larger homes
• Replacement cost: $5,000-$12,000

Insulation & Energy Efficiency:

• Proper attic insulation (R-38+ recommended)
• Low-E windows to reduce heat gain
• Proper weather stripping and sealing
• Radiant barrier in attic

Roof:

• Tile roofs last 50+ years (most durable)
• Shingle roofs last 15-20 years in Phoenix heat
• Foam roofs need recoating every 5-10 years
• Check for sun damage, cracking, or repairs needed

Pool/Spa (if desired):

• Adds $100-$200 monthly maintenance
• Check equipment age (pump, filter, heater)
• Inspect surface for cracks or resurfacing needs
• Verify safety features (fencing, alarms)

Outdoor Living:

• Covered patio essential (use year-round)
• Desert landscaping (low maintenance, drought-tolerant)
• North-facing backyard stays cooler
• Mature trees provide valuable shade

Best Times to Buy:

• Summer (June-August): Less competition, more negotiating power, though inventory is lower
• Fall (September-November): Market cools, motivated sellers, weather improves

Most Competitive Times:

• Winter/Spring (January-April): Peak season, snowbirds active, multiple offers common
• Highest prices and fastest sales
• Best inventory selection

Climate-Related Issues:

• HVAC failure: Extreme heat stresses systems; verify age and maintenance
• Sun damage: Faded paint, damaged roofing, deteriorated seals
• Pool issues: Cracked plaster, equipment failure, leaks
• Roof deterioration: Shingles age faster in extreme heat

Pest Issues:

• Scorpions: Common in desert areas; monthly pest control helps
• Termites: Subterranean termites present; inspection required
• Rodents: Pack rats can damage wiring and insulation

Drainage & Water:

• Poor drainage during monsoon season (July-September)
• Check for standing water after rains
• Hard water issues (scale buildup on fixtures)

Foundation:

• Expansive clay soil can cause settling
• Minor cracks common and usually not serious
• Major cracks or shifting require evaluation

Cost:

• Buyer's agent commission typically paid by seller
• No direct cost to you in most cases
• Recent changes mean this may be negotiated, but you still benefit

Expertise:

• Navigate complex contracts and disclosures
• Identify potential issues before you commit
• Negotiate best price and terms
• Access to MLS and off-market properties

Local Knowledge:

• Neighborhood insights and market trends
• Understanding of Phoenix-specific issues
• Relationships with lenders, inspectors, contractors

Advocacy:

• Represents YOUR interests, not the seller's
• Handles negotiations objectively
• Protects you throughout the process

Time Savings:

• Filters listings to match your criteria
• Schedules and coordinates showings
• Manages transaction timeline and deadlines