Real Estate Help Library Buyer Advisory Buying

Important Note:

The Buyer Advisory is a form put out by the Arizona Association of Realtors to help buyers know where to look for information that they may need to find when buying a residential property in Arizona. Agents are not qualified or able to help a buyer decide if a property is right for them, nor able to help them make discovery of information about a property and this responsibility is the buyer’s.

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Real estate agents can help you locate property, and negotiate a sale, but not help you discover defects in the property or area, or decide if those defects should matter to you.

This document is designed to help you find information that you may need to know.

Reminder: You should get a home inspection.

Notes: All homes you enter may have audio or video surveillance.

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Table of Contents

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(1) Purchase Contract.

This contract is the core of all residential resale activities and is covered in great detail in this post here

(2) MLS Printout

The information in the MLS was obtained from various sources and may be inaccurate. It is the buyer’s job to verify the information in the MLS if it matters to them.

(3) Subdivision Disclosure Report (Public Report)

All subdivided land with more than 6 lots must provide a public report which is a neighborhood-wide report when they first develop the land. Original purchasers are always given the report but resale buyers sometimes skip this report. Links to where you can find the reports.

(4) Seller’s Property Disclosure Statement (SPDS)

This is a property disclosure from the seller stating what they know about the property. Even though it is required by the purchase contract, more sellers (especially large companies) are refusing to fill it out. We recommend not buying a property unless the seller is willing to tell you what they know about the property. More information about the SPDS can be found in this article.

(5) CC&R’s (Covenants, Conditions, and Restrictions)

All land has restricted use in some way or another. The most basic example is zoning. The government restricts the land’s use in order to make a more orderly city. Other restrictions are easements by local governments or utilities to access the property to get to their equipment.

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(6) HOA

More commonly, these restrictions apply to HOA’s (home owner’s associations) which make rules for acceptable practices in the neighborhood and vary from one neighborhood to the next. You should read these rules and make sure that if you want to park your boat in your driveway, paint your house a certain color, or remove a citrus tree in your yard, all of these may not be allowed by your HOA!

This document usually comes from the title company and needs to be reviewed and agreed to prior to ending your inspection period!

(7) HOA Disclosures

There are even more HOA disclosures for you to read. Fun!

(8) Community Facilities District

Although the law allowing the creation of such districts was passed in 1988, it was not until recently that these began popping up. Generally speaking, the local government borrows money to revitalize a particular area, and then creates a special tax district in the area to pay back the bond. This becomes, generally, just another line item on your tax bill,

The only good way to find out if the property you are interested in is located in one of these districts is by visiting the Treasurer’s site, entering the parcel number, Go to “Tax Information” –> “Valuations”. 

Where do I find my parcel number?

  

(9) Title Report or Commitment

This document comes from the title company and outlines their commitment to insuring the title to the parcel.

(10) Loan Information and Documents

This information comes from the lender and the lender is required to provide certain disclosures regarding the total amount the loan will cost including the rate, the monthly payment (both P&I and PITI), the total cost of the loan, and the total cash due at closing. Check this article for more information on loans and funding.

(11) Home Warranty Policy

If the buyer has asked the seller to order and/or pay for a home warranty, you should review what it covers and does not cover.

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(12) Affidavit of Discloure

Similar to a public report, but for un-subdivided, unincorporated land.

(13) Lead Based Paint Disclosure

If the home was built prior to 1978, a lead-based paint disclosure must be signed and the buyer is advised to use certified lead-based paint remediation contractors if doing renovations to ensure lead dust does not contaminate your home.

(14) Professional Inspection Report

Every buyer should pay a professional home inspector to get at the very least, a general home inspection. Other inspections may be warranted such as a termite inspection, pool inspection, and plumbing sewer scopes.

(15) County Assessor/ Tax Records

These records show all recorded data on the property. Sometimes square footage differs from information entered by the seller. The buyer is responsible for verifying this information, as well as all taxes that are assessed to the property, before ending the inspection period.

(16) Termites

A termite inspection is recommended if the home has not recently been treated for termites. We only have subterranean termites in Arizona, meaning termites eat wood in the home and build tubes but return underground every night. For this reason, treating for termites is relatively easy and only the exterior of the foundation needs to be treated and usually costs between $400-$800 depending on the size of the home.

(17) FIRPTA

If you are a non-resident of the US, you may be subject to some extra taxes withheld at closing.

 

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(1) Repairs, Additions

The buyer should investigate that all improvements made to the home were done t code, by licensed contractors if necessary, by requesting receipts and by using a home inspector to verify anything that is important to them.

(2) Square Footage

It is the  buyer’s job to verify that the square footage is correct.

(3) Roof

If the roof is old, recommend a separate roofing inspector to verify the condition of the roof, although the general inspector will look in the attic and note any evidence of water coming in.

(4) Swimming Pools and Spas

Usually home inspectors don’t inspect pools, and if they do, this is an extra cost. The buyer is also reccomended to inspect that swimming pools meet local barrier regulations. Note: if someone drowns in your pool, and your home is not up to code, you may be liable!

(5) Septic Systems

If the home is not connected to a sewer, it is probably hooked up to septic system. State law requires all septic systems to be inspected at the time of sale. These inspections can cost anywhere from $500-$1000. Unfortunately, the sellers occasionally don’t know they are on septic and state that the home is on sewer. Note: It is the buyer’s responsibility to verify the existence of septic, or if it is connected to sewer!

Are you catching on yet? everything is the buyers responsibility to discover!

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(6) Sewer

As stated previously, it is the buyers job to find out if the home is connected to a sewer

(7) Water Quality

It is the buyer’s job to determine the quality of water available to the property.

(8) Soil Problems

Certain parts of the valley have what is called “expansive soil”. Over the years, developers started building in these “less than ideal” areas which led to foundation problems as the soil moved over the years. This section contains maps of areas with known problems. But, in areas where shifting soils were known, post-tensioned slabs were used more often. More info about post-tensioned slabs can be found in this article.

(9) Previous Fire/ Flood

If there was a fire/ flood, a separate inspector is reccomended. This information should be disclosed on the SPDS theoretically, and, if in the past 5 years, should be disclosed on the Loss History Report.

(10) Pests

Arizona is a desert. We have bugs. We have information about pests and other desert animals in this article. 

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(11) Endangered Species

Some areas may be regulated by the Endangered Species Act

(12) Death and Felonies on the Property

In Arizona, it is not required to disclose a death or felony on the property, other than if it was a meth lab, and even that does not have to be reported if it was properly remediated. You can ask the seller for this information, but they are not required to tell you. They are also not allowed to lie. They can either say “No” or, “We are not required to say one way or the other”. Sometimes local police will give you an incidence report for a specific property, but there is no guarantee the incident is reported. Often the best way to uncover this information, if important to you, is by asking the neighbors.

(13) Indoor Environmental Concerns

If these are a concern, you can order an indoor environmental air quality test. Things that may be a particular concern are: mold, radon, carbon monoxide, or meth labs. Certain parts of the Valley are prone to radon (a naturally occurring gas) that seeps out of the ground, especially parts of Cave Creek. If it is a concern, you should get a IAQ test, but note: On average, radon levels in Arizona are the lowest in the United States.

(14) Property Boundaries

It is the buyer’s responsibility to verify property boundaries. There is a law in AZ regarding use of property (called adverse possession) that, after a number of years (that varies based on the circumstances), becomes a right to use or ownership of the property! If it looks like someone other than the owner has been using the property for a long time, it might be warranted to conduct a survey and talk to the users!

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(15) Flood Insurance/ Flood Zone

Depending on the flood zone status, you may be required to buy federal flood insurance.

(16) Insurance History

As stated in section 4b (line 157) on the Purchase Contract , the seller will provide a 5 year history of insurance claims for the property.

(17) Other property conditions

Properties sold in as-is condition. It is the buyer’s job to ensure functionality of the various systems in the home.

Other Conditions

It is the buyer’s job to investigate the area.

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(1) Environmentally Sensitive Land

Scottsdale has some particular codes on retaining the land’s natural state (which I love but can cause problems if you want to landscape a particular way)

(2) Electromagnetic Fields

Electromagnetic fields are caused by (you guessed it) electricity lines and may (or may not) cause cancer. If you are sensitive to electromagnetic fields or concerned about risks, you should research the area before the end of your inspection period.

(3) Superfund Sites

A Superfund site is a federally designated site as receiving special long-term commitments from the federal government to clean up environmental contamination caused (usually) by businesses such as the superfund site left by Motorola in north Phoenix. Maps to the superfund sites are available.

(4) Freeway Construction and Traffic

Freeways exist and traffic exists. Check these things (at different times of day if important to you) before expiration of inspection period.

(5) Crime statistics

Crime happens. If important to you, research crime statistics in the neighborhood before inspection period ends.

(6) Sex Offenders

Sex Offenders are kept on a registry. Check the registry if important to you before the end of the inspection period.

(7) Forested Areas

Since the forests occasionally burn, it may be special concern if you are close to a forested (or desert) area.

(8) Airports

Airplanes make noise. F-35’s make a lot of noise. If airplane noise is a concern to you, check the area throughout the day, and talk to neighbors to see if the airplane noise changes at certain times of day. Flight patterns occasionally change as well, so just because there are no planes overhead today, doesn’t mean there never will be!

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(9) Zoning

Check your zoning if it matters to you.

(10) Schools

Check your schools if they matter to you. I have also this article on schools in Arizona.

(11) City Profile Report

Demographic information can be found from Census data.

Other ways to get information

Important! Talk to the neighbors. Walk around the neighborhood. Drive the area. Go at different times of day. If you need to know it before you move in, you need to find it out for yourself! In Arizona, there’s no going back once you are past the inspection period (except for loan contingency, appraisal contingency, and review of certain documents such as CC&R’s as detailed in my article about the Purchase Contract)

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Market Conditions

The market goes up and down.

Wire Fraud

Wire Fraud is real. Find information in the links in this section or more information on what it is and how to avoid it in this article.

More Stuff

Even more information.

Last Page

You have read this document. You have scoured the thousands of pages of information available to you through the title company, your own research, the public report, the treasurer’s website, the assessor’s website, the school zones, the county, the city, and the state. You have been advised to visit the property many times of day, to find all the information you need to know, how to hire a home inspector, roof inspector, pool inspector, pest inspector, indoor air quality inspector, how to look for invisible electromagnetic fields, and listen for airplanes.

You don’t have to find all the information, but if you want to, this is how to find it.

If I haven’t made it clear, most importantly:

It is your job to find out. Every piece of information is as accurate as the seller knows, but it is your job to verify everything they tell you.

It is very difficult in the state of Arizona to prove someone knowingly lied to you concerning the condition of the property. It’s possible, but very very difficult.

Look around, do your own research, and make an informed decision. And make that decision by the end of the inspection period.

 

And then sign it.

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