Archive for October, 2015

Weekend Wanderings…

Friday, October 30th, 2015

IMG_7932Admittedly Halloween is my favorite holiday and the concept of El Dia De Los Muertos is an occasion I never knew about, having been raised in Connecticut. To conscientiously remember those in life who have died and commemorate them is such a nice tradition. Families and friends will spread picnics of foods and drink enjoyed by the deceased as well as music and mementos at local cemeteries. And in homes, altars will be built to those who have died in remembrance.

Especially for those who do not know about El Dia De Los Muertos, various venues about town will commemorate the day with exhibitions, art work, and altars and include Banda Calaca, a band of “musicians” marching to Altar, which is a community memorial altar in conjunction with the Tucson Museum of Art. Tohono Chul Park will have an exhibition of art work and All Souls Procession will put the finishing touches on the All Souls Procession which takes place the following week.

Congress Street will be the site of the costume contest parade and in a different event, children can trick or treat along Fourth Avenue, venue for a Spooky Kids Costume Contest at 6 pm October 30. Trunk or Treat will be at 604 North 6th Avenue October 31 and will be the site of carnival games, a kids train, petting zoo, music and more.

Nightfall at Old Tucson is designed to scare adults and children alike with ghosts and goblins darting about and appearing as if from no place. Haunted Histories of Tucson will delight those who like macabre history October 31 at Fort Lowell Park, by the Arizona Historical Society. And for those who want to go to the deep dark caves, Howl at the Cave is taking place October 30 and 31 at Colossal Cave
on Old Spanish Trail.

For a complete list of what is happening this weekend, visit and check the calendar. Then go out and have a howling good time!

How Do I Pay for this House?

Thursday, October 29th, 2015

The buyer should have been pre-approved by a lender in order to purchase a property.  There is a difference between being pre-qualified and being pre-approved.    To be pre-qualified means that according to what you have told the lender, he believes you can purchase the property for whatever sum.  Being pre-approved means the lender has checked the assets and liabilities and feels that the buyer can afford to own this property…the buyer is “good to go”.  The buyer wants to be pre approved.

But a pre-qualification form should accompany every offer.   However all offers using the AAR Contract are contingent upon loan approval, if the buyer suddenly cannot qualify for any reason, he/she is out of the contract, and if the property does not appraise, the loan cannot usually  be granted and the buyer is out of the contract. Earnest money will be returned to the buyer.

If the lender has “Prior to Document” conditions on the loan, then the specified conditions must be met prior to documents being issued by the lender.  For example, a termite treatment may be required by a lender for a VA loan.  Documents cannot be issued and therefore the loan documents will not be issued, nor the loan funded without this condition being met.  (A loan cannot fund without the signatures of the buyers.)

If the buyer had been offered an interest rate but failed to lock the rate because he/she thought the rate would go down, this is not sufficient reason for the contract to be cancelled.  Failure to have the necessary funds to close escrow is likewise, not a reason for the contract to be cancelled.

The buyer must provide the lender the name  of the buyer, social security number, address of the property to be purchased, buyer’s income , estimated value of the property, and the amount of the loan requested.  The buyer grants the lender permission to obtain a tri-merged credit report.

The Loan Status Update must be delivered to the seller with appropriate information describing the current status of the loan.  The update must be provided by the lender when requested by the seller.

The buyer will sign all loan documents no later than three days prior to the Close of Escrow date.

The financing portion of the contract indicates the type of loan, and if there is a change, all parties and the escrow company must be notified.  The buyer pays all loan costs unless otherwise indicated, and if concession from the seller to the buyer are a part of the contract, this must be spelled out.  If the loan is a VA loan, certain fees cannot be paid by the veteran and must be paid by the seller.   The appraisal fees which are to be paid, is designated either paid by the seller or by the buyer.

These provisions also act as instructions to the lender and the title company and permit the seller to know the details of the loan.  Both the buyer’s agent and the seller’s agent will monitor the loan process to make sure all time frames are being met.



Wednesday, October 28th, 2015

The Arizona Residential Purchase Contract identifies both the buyer(s) and the seller(s) of the property and indicates the buyer’s desires to purchase the property identified in section 1 b. This identifies the address of the property, the tax identification number, and the legal description. Three methods insures all identifications point to the same property.

The next section details the offering price of the property, the amount of earnest money, and the method of payment for the property. Earnest money shows that the buyer is serious about purchasing the property and certain conditions can cause the buyer to lose his earnest money.

Additional funds at the close of escrow are indicated, and the amount of loan and type of loan is spelled out. For instance, a property is $200,000 with 20% conventional loan and $2,000 earnest money.

The financing portion of the contract is further enumerated in Section 2. We know the offer is for $200,000 with $2,000 earnest money, $38,000 additional funds at close of escrow, and a conventional first loan of $160,000.

Close of Escrow is defined as recordation, not when the signing takes place. Often close of escrow is close to the last day of the month because the buyer can bring less funds to the closing table.

Interest is paid on a per diem basis and if our interest is 3.875%, our interest would be about $6200 or about $16.99 a day. If we close on the 15th of the month, we have 15 days of interest or $254.85 to bring to the closing table, but if we close the 30th of the month, we only have $16.99 in interest.

Possession is at the close of escrow, or when the property transfer is recorded with the Pima County Recorder’s office.

Any addenda which is made a part of this contract; an “AS IS” addendum, a HOA (homeowners association) addendum, short sale addendum, lead based paint disclosure, water well or septic system addendum, a loan assumption, or seller financing, or an additional clause addendum are listed.

All items attached to the property stay with the property, including landscaping.  And if the buyer wants the washer, dryer, refrigerator, or other appliances with the exception of the stove, they must be listed. Pool and spa equipment, fireplace equipment, water system and security systems transfer with the property.  Furniture and personal items should be conveyed with a bill of sale.


Tuesday, October 27th, 2015

IMG_7914The cover page of the Residential Resale Real Estate Purchase Contract has boldfaced capital letters ending with an exclamation point, ATTENTION BUYER!

And underneath the exclamatory phrase is “You are entering into a legally binding agreement” in large letters.

The Arizona Association of Realtors® is nearly screaming at you to pay attention to what you are about to sign.

There are eight caveats:  Read the entire contract before you sign it.  If you don’t understand something, ask!

It will tell you to review the Residential Seller’s Property Disclosure Statement, otherwise known as the SPDS.    This will be given to you after mutual acceptance of the contract, if not before.  The seller discloses all that he knows about the house to the best of his ability.  With your agent, you should review all information to ascertain if there is additional information you may want to investigate during the ten day inspection period.  On the basis of information in the SPDS, you may decide not to proceed with the contract.  This is an important document.

The third item has to do with Inspections.  The buyer can inspect for anything that is important to the buyer.  This will include the Covenants, Codes and Restrictions (item 7) and other governing documents.  If you have three 150 pound dogs, it is important to read the CC and R’s to make sure they are allowed in the community.  But you may inspect for mold, have a roof inspection, a pest inspection, a pool inspection, and an HVAC inspection or anything else the buyer deems important.

During the inspection period, confirm that you can obtain insurance on the property.  And you should have verified you can obtain a home loan.  Any information requested by the lender should be provided immediately.

Your agent will review the title commitment with you and if there are problems with the title, they will be have to be resolved prior to close of escrow.

And finally, the buyer should conduct a final walk through to make sure the property is in the same condition as when originally seen and if repairs were requested, they were done in a workman like manner.

The cover page is explicit:  “Verify anything important to you.”

Buying Property in Tucson

Monday, October 26th, 2015

man-reading-a-contract-with-magnifying-glass-clipart The Arizona Department of Real Estate has made every effort to let consumers know their rights and responsibilities when purchasing a property. The buyer is entering into a legally binding agreement and can be held to that agreement in a court of law.

The buyer and seller must know what they are signing and should be working with an agent who takes the time to explain the entire contract and the ramifications of each section of the contract.

An agent who slides paperwork over to the buyer and/or seller and says “sign here” without an explanation may be binding those people to a legal contract which they do not understand. But then ignorance of the law is no excuse.

If you have a buyer’s agent, or a seller’s agent, their fiduciary responsibility is to you. It is far better for you to belabor the point until you understand the contract than to sign something which may cost you dearly in the end.

This series of blogs will explain the purchase contract in detail. I will break it down section by section. In the State of Arizona, which is not an attorney state, real estate agents are given the powers vested to attorneys in other states. Be sure you know your agent and if you desire to use an attorney, a good real estate agent should permit that.