22.5% of homes are selling below the asking price in the Grand Canyon State. You can save up to $9,464 on a median home price of $450.7K if you buy a house in Arizona NOW! Plus, inventory has also increased 19.4%.
With more homes available, the average time spent on the market has increased to 63 days. This gives you more room to negotiate and secure a competitive deal. With the market in your favor, it’s the perfect time to buy your dream Arizona property.
9 Steps to Buying a House in Arizona
Buying a home in Arizona doesn’t have to be complicated. From finding a property to closing on the deal, these 9 steps will guide you through the process:
Step 1: Decide Your Homebuying Purpose
Before you start your home search, you need to be sure what kind of home to purchase in Arizona. Are you looking for a permanent residence, an investment property, or a vacation home? This will help you decide on an ideal location and property type.
»💲Can you afford the Grand Canyon State?
Calculate the cost of living in Arizona to estimate expenses like housing, utilities, and transportation. Get a detailed cost breakdown across cities for FREE today. 🏡
Step 2: Assess Your Financial Readiness
Before you buy a home in Arizona, take these steps to get your finances in order:
- Review Your Credit Score: Your credit score determines how much you can borrow and the interest rates you qualify for. A minimum credit score to buy a house in Arizona is 580 for an FHA loan and 620 for a conventional loan.
- Calculate Your DTI Ratio: Lenders use the debt-to-income ratio to determine your eligible mortgage amount. Ideally, your monthly debt payments should not exceed 36% of your gross monthly income.
- Determine Your Monthly Mortgage Budget: Decide how much you can afford for your monthly mortgage, including the loan, taxes, and insurance. A good rule of thumb is to keep housing costs under 28% of your gross monthly income.
» Arizona Mortgage Calculator: Find how much house you can afford in the Grand Canyon State now. 🏡
Step 3: Explore Home-Financing Options
The average down payment on a house in Arizona ranges from 10% to 20%. However, there are several financing options to help you cover the costs:
1. Home Loans
| Loan Type | Down Payment | Key Benefit | Ideal For |
|---|---|---|---|
| FHA Loans | 3.5% | Low down payment, flexible credit score | First-time buyers |
| VA Loans | 0% | No down payment, lower interest rate | Veterans |
| USDA Loans | 0% | No down payment, lower interest rate | Rural homebuyers |
2. Assistance Programs
- First-Time Homebuyer Programs: If you’re a first-time home buyer in Arizona, you should consider the GSFA Platinum Program. This program offers financial assistance up to 5.5% of the loan amount.
- Down Payment Assistance (DPA) Programs: Explore programs like the Arizona Dream For All Program and the MyHome Assistance Program. They can cover 20% (up to $150K) for a down payment.
Step 4: Research the Arizona Real Estate Market
In Dec 2024, 22.5% of homes in Arizona were sold below list price, indicating that it’s currently a buyer’s market:
- Track Mortgage Rates: As of January 9, 2025, the 30-year fixed mortgage rate is 6.70%. Experts predict rates to stay in the mid-6% range throughout 2025 and 2026. So, now is a great time to lock in a competitive rate.
- Home Inventory Levels: The number of new listings also rose to 6,486, which is a 2.8% increase compared to last year. This gives you more options when house-hunting.
- Local housing trends: San Luis and Eloy are recognized for their affordable housing options. In San Luis, home prices are 58% lower than the national average, making it one of the most affordable cities in the U.S
Step 5: Get Pre-Approved for a Mortgage
86% of sellers favor buyers with a pre-approval. So, get pre-approved before house hunting in Arizona to show you’re serious about the purchase and financially capable.
Pre-approval also speeds up the buying process, helps you negotiate better, and reduces delays in the transaction.
Get pre approved for a mortgage in Arizona 🏡
Select Your Loan Type
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New Home Purchase
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Mortgage Refinance
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Cash-out Refinance
Step 6: Start Your Arizona Home Search
Traditionally, home buyers rely on Arizona real estate agents to find a house, but this comes with hefty commissions. Instead, you can also:
- Search for Listings Online: Use online platforms to explore homes for sale in Arizona. Look for neighborhoods that cater to your needs.
- Consider FSBO Homes: You can also search for Arizona homes For Sale By Owner. It will allow you to bypass realtor commissions and directly negotiate with sellers.
Browse Homes For Sale in Arizona by Price and Type
» 💡 What is the nicest and cheapest place to live in Arizona?
Douglas is one of the cheapest places to live in Arizona. Its cost of living is 15.2% lower than the national average.
Step 7: Make a Competitive Offer
Once you’ve found a home you like, it’s time to make an offer! Here’s what your home offer should include:
- Seller’s Name and Address: Include the seller’s legal name and property address.
- Offer Price: Offer an amount based on the Fair Market Value (FMV) and comparable sales.
- Down Payment: The portion of the purchase price that you pay upfront.
- Earnest Money: A deposit to show you’re serious, often 1%-2% of the offer price, credited toward the purchase.
- Contingencies: Conditions such as home inspection, appraisal, or financing that must be met for the deal to close.
- Concessions: Requests for the seller to cover some costs, like closing fees or repairs.
- Closing and Move-in Dates: Specify when you aim to close the deal and move in, based on your and the seller’s needs.
- Offer Deadline: Specify the date by which the seller must respond to the offer.
Step 8: Conduct Inspections and Appraisals
A home inspection ensures the property is in good condition and there are no hidden issues. An inspection can help you save up to $14,000 on the sale price.
You should prioritize a home inspection in Arizona that focuses on 5 key points:
- HVAC: Checks the heating and cooling systems for proper operation.
- Plumbing: Inspects pipes and fixtures for leaks or damage.
- Electrical: Evaluates the electrical system for safety and functionality.
- Roofing: Assesses the roof for damage or wear.
- Foundation: Examines for cracks or issues with the home’s foundation.
Once the inspection is complete, your lender will arrange for a home appraisal to ensure the property’s value matches the loan amount.
Step 9: Close on Your Arizona Home
Before closing, do a final walkthrough. Check if the home’s condition and repairs are in the agreed-upon condition. It can take 30 to 45 days to close on your Arizona home after signing the purchase agreement.
The average closing costs in AZ for buyers is 2% to 5% of the home’s purchase price. you’ll also need to pay for this. Once everything is finalized, escrow will record the deed and hand you the keys to your new California home!
Should You Buy a House in Arizona?
Absolutely! With more and more homes being sold below the list price, now is the best time to buy a house in Arizona. But you need to plan properly.
Assess your financial situation to ensure your credit score is ready for quick pre-approval. Also, calculate your down payment and closing costs well in advance.
Frequently Asked Questions
Is Arizona a good place to buy a home?
Yes, Arizone is a great place to buy a home. It has a thriving job market, diverse housing options and excellent quality of life. Phoenix, Scottsdale, and Mesa are some of the best places to live in Arizona.
How much down payment do I need to buy a house in Arizona?
It depends on the type of mortgage you choose. For a conventional loan, you have to put down 20%. On the other hand, FHA loans only need 5% money down.
What are the requirements to buy a house in Arizona?
To buy a house in Arizona, you'll need a minimum credit score of 620, proof of income, funds for a down payment, and a 36% debt-to-income ratio. You should also seek a pre-approval if you plan to apply for a mortgage.
» Steps to Buy a House in Arizona: Your 9-step action plan for buying a house in the Grand Canyon State.
What credit score do I need to buy a house in Arizona?
For an FHA loan, you'll need a minimum credit score of 500, while conventional loans typically require 620 or higher. A good credit score can help you secure lower interest rates.
How to buy a home in Arizona with no money?
You can buy a house with no money down in Arizona by using USDA or VA loans.
