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BUYER ADVISORY
A real estate
agent is vital to the home buying process and can
provide a variety of services in locating a property,
negotiating the sale, and advising the buyer. A real
estate agent is generally not qualified to discover
defects or evaluate the physical condition of property;
however, a real estate agent can assist a buyer in
finding qualified inspectors and provide the buyer with
documents and other resources that contain vital
information about a prospective new home.
This advisory
is designed to make a buyer's home purchase as smooth as
possible. Some of the more common issues that a buyer
may decide to investigate or verify concerning a home
purchase are summarized in this Advisory. Included in
this Advisory are: (1) common documents a buyer should
review; (2) physical conditions in the property the
buyer should investigate; and (3) conditions affecting
the surrounding area that the buyer should investigate.
In addition, a buyer must communicate to the real estate
agents in the transaction any special concerns the buyer
may have about the property or surrounding area, whether
or not those issues are addressed in this Advisory.
REMEMBER
This Advisory is supplemental to
obtaining professional home inspections. Professional
home inspections are absolutely essential: there is no
practical substitute for a professional inspection as a
measure to discover and investigate defects or
shortcomings in a home.
Common
documents a buyer should review
The documents
listed below may not be relevant in every transaction,
nor is the list exhaustive.
Unless otherwise stated, the information contained in
these documents may not have been independently verified
by the real estate agent.
MLS
Printout
A listing is an
agreement between the seller and the listing agent and
authorizes the listing agent to submit information to
the Multiple Listing Service ("MLS"). The MLS printout
is similar to an advertisement and contains various
abbreviations and symbols. Neither the listing agreement
nor the printout is a part of the purchase contract
between the buyer and seller. The printout contains
limited description of a property, such as its size,
encumbrances, utilities, amenities, etc. The information
was probably secured from the seller, the builder, or a
governmental agency, and could be inaccurate. Therefore,
the buyer should verify any important information
contained in the MLS, as the information may be
incomplete or an approximation. For more information,
visit
http://www.armls.com/
or
http://www.tarmls.com/
The Public Report
This report is
required to be given to buyers by developers in a new
home subdivision. The purpose of this document is to
point out material information about the development
that a buyer might want to know when making a decision
to purchase. For example, the section of the Public
Report entitled "Nuisances and Hazards" will disclose
adjacent land uses that may be of concern. The Public
Report is prepared by the seller/builder, could be
inaccurate, and should be verified. Additional
information about the Public Report may be found on the
ADRE website at
http://www.re.state.az.us/checklist.html
Seller's Property Disclosure Statement ("SPDS")
Most sellers
provide a SPDS. This document covers a variety of
questions for the seller to answer about the property
and its condition. A buyer should carefully review the
SPDS and verify those statements of concern: A sample of
the Arizona Association of REALTORS© SPDS may be found
at
http://www.aaronline.com/docs/spds_samp.pdf
The ADRE
advises: "Read the seller's property disclosure report,
and check every item on it. Ask to see receipts for
repairs to the home. Look behind large pictures on the
wall and behind anything on the floor that conceals
large areas of the wall. Look for stains on the ceilings
or carpets that might indicate water damage. Read the
purchase contract carefully to determine if there are
any deadlines for challenging the seller's disclosure
report or for having your own inspections conducted."
http://www.re.state.az.us/checklist.html
Remember, your review of the SPDS
is not a substitute for professional inspections.
Covenants, Conditions and Restrictions ("CC&Rs")
The CC&R's are
recorded against the property and generally empower a
homeowners' association to control certain aspects of
property use within the development. By purchasing a
home in such a development, the buyer agrees to be bound
by the CC&Rs. Thus, the CC&Rs form an enforceable
contract. The association, the homeowners as a whole,
and individual homeowners can enforce the contract. It
is essential that the buyer review and agree to these
restrictions prior to purchasing a home.
The ADRE
advises: "Read the deed restrictions, also called CC&Rs
(covenants, conditions and restrictions). You might find
some of the CC&Rs are very strict, especially those
addressing landscaping, RV parking, play equipment,
satellite antennas, and other common amenities --
particularly if the subdivision is governed by a
homeowner's association."
http://www.re.state.az.us/checklist.html
A short but informative document on the purpose and
effect of CC&Rs may be read at
http://www.realtor.com/BASICS/condos/ccr.asp
Buyers should consult legal
counsel if uncertain of the application of particular
provisions in the CC&Rs.
Homeowners' Association ("HOA") Governing Documents
In addition to
CC&Rs, HOA's may be governed by Articles of
Incorporation, Bylaws, Rules and Regulations, and often
architectural control standards. The HOA is in place to
enforce these rules and to preserve the value of homes
in the condominium or planned community. Condominium and
planned community HOA's are also regulated by Arizona
statutes.
What makes a
development a condominium or planned community? Common
area, that is, community ownership of real estate for
use by community residents, is the common denominator.
In a condominium, the common property is actually deeded
as undivided interests to the condominium owners. In a
planned community, the ownership of the common property
vests in the homeowners' association.
If you have
questions about your rights and remedies regarding home
owner associations or community associations, please
read the information provided at
http://www.re.state.az.us/communityassoc.html.
HOA
Disclosures
If purchasing a
resale home in a condominium or planned community, the
seller (if fewer than 50 units in the community) or the
HOA (if there are 50 or more units) must provide the
buyer with a disclosure containing a variety of
information. The disclosure should contain information
regarding the principal contact for the association,
assessments, the money held by the association as
reserves and, if the statement is being furnished by the
association, a statement as to whether the records of
the association reflect any alterations or improvements
to the unit that violate the declaration. See
http://www.azleg.state.az.us/ars/33/01260.htm
and
http://www.azleg.state.az.us/ars/33/01806.htm
for laws detailing this
requirement.
Title
Report or Title Commitment
The title
report or commitment contains important information to
be provided to the buyer by the Escrow Company or Agent.
This report or commitment lists documents that are
exceptions to the title insurance (Schedule B
Exceptions). Schedule B Exceptions may include
encumbrances, easements, and liens against the property,
some of which may affect the use of the property, such
as a future addition or swimming pool.
Make sure you
receive and review all of the listed documents.
Questions about the title commitment and Schedule B
documents may be answered by the title or escrow
officer, legal counsel, or a surveyor. General
information regarding title issues may be found at
http://www.titlelawannotated.com/
or obtained from the title/escrow
company employed in the transaction
Home
Warranty Policy
A home warranty
may be part of the sale of the home. Buyers should read
the home warranty document for coverage and limitation
information. Be aware that pre-existing property
conditions are generally not covered under these
policies.
Affidavit of Disclosure
(Affidavit applies to both vacant land and residential
properties)
If the buyer is
purchasing five or fewer parcels of land, other than
subdivided land, in an unincorporated to area of a
county, the seller must furnish the buyer with an
Affidavit of Disclosure. A sample form is located at
http://www.aaronline.com/documents/affidavit_2002.pdf
Lead-Based Paint Disclosure Form
If the home was
built prior to 1978, the seller must provide the buyer
with a lead-based paint disclosure form. A sample form
is located at
http://aaronline.com/documents/leadsale.pdf
More information about lead-based paint may be obtained
at
http://www.re.state.az.us/leadfacts.html
County
Assessor’s Records
The county
assessor's records contain a variety of valuable
information including the assessed value of the property
for tax purposes and some of the physical aspects of the
property, such as the reported square footage (which
should always be verified for accuracy).
• Coconino:
http://co.coconino.az.us/assessor/
• Maricopa:
http://www.maricopa.gov/assessor/homeowner_guide.asp
•Pima: http://www.dot.co.pima.az.us/assessor/arm/
and
http://co.pinal.az.us/treasurer/
• Yavapai:
http://www.co.yavapai.az.us/departments/assessor/assessormain.asp
For other
counties, see Counties listing:
http://www.az.gov/webapp/portal/
Professional Home Inspection Report
For the buyer's
protection, the importance of having a home inspected by
a professional home inspector cannot be over-emphasized.
A home inspection is a visual physical examination,
performed for a fee, designed to identify material
defects in the home. The home inspector will generally
provide the buyer with a report detailing information
about the home's condition. The inspector and the report
will point out existing problems and possible potential
problems. The buyer should carefully review this report
with the inspector and ask the inspector about any item
of concern. Pay attention to the scope of the inspection
and any portions of the property excluded from the
inspection.
Information on home inspectors can be found on the
following websites:
• American
Society of Home Inspectors,
http://www.ashi.com/
• Arizona ASHI,
http://www.arizona-ashi-home-inspection.com/
• American Home
Inspectors,
http://homeinspectortraining.com
• Board of
Technical Registration,
http://www.btr.state.az.us/
• Guidance on
hiring a home inspector,
http://www.realtor.com/basics/buy/inspnegot/hire.asp?gate=realtor&poe=homestore
Termites and Other Wood Destroying Organisms
Termites are
commonly found in Arizona homes. Investigating evidence
of termites or other wood infestation is the job of the
pest inspector. The Structural Pest Control Commission (SPCC)
regulates these inspectors and can provide the buyer
with information regarding past termite treatments on a
property. The SPCC publication, That You Should Know
About Wood Infestation Reports, can be found at
http://www.sb.state.az.us/wir.htm.
Additional information may be obtained at the Structural
Pest Control Commission website at
http://www.sb.state.az.us/
Common
physical conditions in the property a buyer should
investigate. Every buyer and every home is different, so
the physical property conditions requiring investigation
will vary.
Repairs and New Construction
The seller may
have made repairs or added a room to the property. For
example, the property may have an obvious improvement,
covered patio, or garage, or may have been remodeled.
The buyer should feel comfortable that the work was
properly done or have an expert evaluate the work.
Request copies of any invoices or other documentation
regarding the work performed.
The Registrar of Contractors'
publication, Hiring a
Licensed Contractor, is available online at
http://www.rc.state.az.us/Consumer_menu.html.
The Registrar of Contractors may be contacted at
http://www.rc.state.az.us/
and a listing of various types of
contractors may be found at:
http://www.arizona-contractors.com
For information regarding permits,
contact the city or county building department.
Roof
The inspector
might recommend that you have the roof further inspected
by a licensed roofer. If the roof is 10 years old or
older, a roof inspection by a licensed roofer is highly
recommended. See the Registrar of Contractors
information on hiring a licensed contractor online at
http://www.rc.state.az.us/Consumer_menu.html
Swimming Pools and Spas
If the home has
a pool or a spa, the home inspector might determine that
the cleaning system is not working properly or may
exclude the pool or spa from the general inspection. It
would then be necessary to have a pool or spa company
inspect the pool or spa and/or evaluate any problem. For
a partial list of Arizona pool and spa contractors, see
http://www.builderszone.com/swimming.htm
and
http://www.arizona-contractors.com/directory/poolspa/poolspa.htm
Swimming Pool Barriers
Each city and
county has its own swimming pool barrier ordinance. Pool
barrier contact information for each Arizona city and
county may be found at
http://www.aaronline.com/documents/pool_contacts.aspx
The Arizona Department of Health Services Private
Pool Safety notice may be found at
http://www.hs.state.az.us/diro/admin_rules/pool_rules.htm
The state law on swimming pools is located at
http://www.azleg.state.az.us/ars/36/01681.htm
Square
Footage
Square footage
on the MLS printout or as listed by the county
assessor's records is often an estimate only and
generally should not be relied upon for the exact square
footage in a home. An appraiser or architect can measure
the home's size to verify the square footage. A list of
appraisers may be found at the Arizona Board of
Appraisal,
http://www.appraisal.state.az.us/Directory/directory.html
A list of architects may be found at the Board of
Technical Registration,
http://www.btr.state.az.us/
Sewer
Even if the
listing or SPDS indicates that the home is connected to
the city sewer, it should be verified by a plumber, home
inspector, or other professional. Some cities can
perform this test as well.
Septic
Systems and Other On-Site Wastewater Treatment
Facilities
ADEQ’s new
Inspection and Transfer of Ownership rules became
effective January 1, 2002. These rules apply to
virtually all septic or alternative on-site wastewater
treatment systems approved for use on or after
January 1, 2001. Inspections are to be performed,
prior to property transfer, by an inspector considered
to be qualified as per ADEQ’s list of "Provider
Categories". Older systems (installed & approved for use
prior to 1/1/01), are to be inspected as per the AAR
Residential Resale Purchase Contract. (These older
systems are expected to be covered by another new
inspection rule in 2003). Contact the Arizona Department
of Environmental Quality
http://www.adeq.state.az.us/
For specific information on the
pre-transfer inspection requirements, see
http://www.adeq.state.az.us/environ/water/permits/wastewater.html
Expansive Soil
The soil in
some areas of Arizona has "clay-like" tendencies,
sometimes referred to as "expansive soil." Although it
is not very common for homes built on expansive soils to
experience significant movement, it can be a major
problem if it does occur. If it has been disclosed that
the home has expansive soil or if the buyer has any
concerns about evidence of cracking, the buyer should
secure an independent assessment of the home and its
structural integrity by a licensed, bonded, and insured
professional engineer.
To investigate
areas in Arizona where expansive soils exist, go to
http://www.az.nrcs.usda.gov/soils/shrinkswell.html
A list of state certified professional engineers and
firms can be found at
http://www.btr.state.az.us
Previous Fire/Flood
If it is
disclosed there has been a fire or flood in the
property, a qualified inspector should be hired to
advise you regarding any possible future problems as a
result of the fire or flood damage and/or any subsequent
repairs. For example, if the property was not properly
cleaned after a flood, mold issues may result. Your
homeowners' insurance agent may be able to assist you in
obtaining information regarding fire, flood, or other
past damage to the property.
Pests
Cockroaches,
rattlesnakes, black widow spiders, scorpions and other
pests are common in parts of Arizona. Fortunately, most
pests can be controlled with pesticides. Scorpions, on
the other hand, may be difficult to eliminate. If the
buyer has any concerns or if the SPDS indicates the
seller has seen scorpions or other pests on the
property, you should seek the advice of a pest control
company. A source of information on scorpions may be
found at
http://www.desertusa.com/oct96/du_scorpion.html
For information on
roof rats, which have been reported in some areas,
search "roof rats" at
http://www.maricopa.gov/envsvc/
. For information on termites see
http://www.sb.state.az.us/
.
Deaths
and Felonies on the Property
An Arizona law
states that sellers and real estate licensees have no
liability for failure to disclose to a buyer that the
property was ever the site of a natural death, suicide,
murder or felony:
http://www.azleg.state.az.us/ars/32/02156.htm
This information is often
difficult to uncover; however, the local law enforcement
agency may be able to identify calls made to the
property address.
Mold
Mold has always
been with us, and it is a rare home that does not have
some mold. However, over the past few years a certain
kind of mold has been identified as a possible
contributor to illnesses. Allergic individuals may
experience symptoms related to mold. Mold growth is
found underneath materials where water has damaged
surfaces, or behind walls. Look for discoloration and
leaching from plaster.
A pamphlet,
Mold in may Home: What Do I Do?, prepared by the
Arizona Department of Health Services, Office of
Environmental Health states: "If you can see mold, or if
there is an earthy or musty odor, you can assume you
have a mold problem." See,
http://www.hs.state.az.us/phs/oeh/invsurv/air_qual/moldinfo.htm
The EPA website also contains valuable information at
http://www.epa.gov/iaq/pubs/moldresources.html
Additional sources may be found on the ADRE website at
http://www.re.state.az.us/consumer.html.
Good information about mold, the problems it may cause,
and how it may be removed can be found at
http://www.cdc.gov/nceh/airpollution/mold/moldfacts.htm
Other
Indoor Air Quality Concerns
There are many
concerns with indoor air quality ("IAQ"). Radon gas and
carbon monoxide poisoning are two of the more common and
potentially serious IAQ concerns. Both of these concerns
can be addressed by the home inspector, usually for an
additional fee. As for the many other IAQ concerns, the
EPA has a host of resource materials and pamphlets
available at
http://www.epa.gov/iaq/iaqinfo.html
and
http://www.epa.gov/iaq/pubs/index.html
Property Boundaries
If the property
boundaries are of concern, a survey may be warranted.
For example, a survey may be advisable if there is an
obvious use of property by others (i.e., a well-worn
path across a property and/or parked cars on the
property) or fences or structures of adjacent property
owners that appear to be built on the subject property.
A list of surveyors may be obtained from the Board of
Technical Registration at
http://www.btr.state.az.us/
.
Flood
Plain Status
If the property
is in a flood zone, an additional annual insurance
premium of several hundred dollars may be required. If
the property is in an area deemed high risk, the buyer
may be required by the lender to obtain flood hazard
insurance through the National Flood Insurance Program.
To find additional detail on flood plain status in
Maricopa County, visit the Maricopa Flood Control
District at
http://www.fcd.maricopa.gov/Resources/MapApplications.asp
. In Pima County, visit the Pima County Flood Control
District at
http://www.dot.co.pima.az.us/flood/
. For information on Flood Control, Flood Plain or Flood
Hazards in other parts of the states visit
http://www.azgs.state.az.us/flood_links.htm
. FEMA's Flood Map Service Center website is
http://www.fema.gov/maps
.
Homeowners Insurance (Claims History)
A home’s
insurance claim history may effect its insurability and
at what cost. A home’s claim history may be obtained
from the Comprehensive Loss Underwriting Exchange
("CLUE"). Homeowners may request a CLUE report on their
own property. Therefore, a buyer might consider asking
the seller to provide a copy of the home’s CLUE report.
A homeowner may order the report by calling 800/456-6004
or 866/527-2600, or go to
http://www.choicetrust.com
(click on "home" and then "insurance claims") and
download a request form. (note: it may take several
weeks to receive the report.) For additional insurance
information contact the Arizona Department of Insurance
at
http://www.state.az.us/id
or the Insurance Information Institute at
http://www.iii.org
.
Conditions affecting the area surrounding the home the
buyer should investigateEvery
property is unique; therefore, important conditions
vary.
Environmental Hazards
It is often
very difficult to identify environmental hazards. See
the Arizona Department of Environmental Quality website
for environmental information at
http://www.adeq.state.az.us/.
Another source of environmental information may be found
at
http://consumerlawpage.com/brochure/home-haz.shtml
.
Superfund Sites
There are
numerous sites in Arizona where the soil and groundwater
have been contaminated by improper disposal of
contaminants. To check if a property is in
an area designated by the Arizona Department of
Environmental Quality as requiring cleanup, maps are
available to view at
http://www.adeq.state.az.us/environ/waste/sps/phx.html
Freeway Construction
Although the
existence of a freeway near the property may provide
highly desirable access, sometimes it contributes to
undesirable noise. To start searching for roadway
construction and planning, go to the Arizona Department
of Transportation website at
http://www.dot.state.az.us/ROADS/rdfway.htm
Check ADOT maps to find the
nearest future freeway routes and roads in the area
slated for widening.
Crime
Statistics
Crime
statistics, while an imperfect measurement at best,
nevertheless provide some indication of the level of
criminal activity in an area. To check the crime
statistics for the cities of Phoenix, Tempe, Glendale,
Mesa, Scottsdale, Chandler, Gilbert and Peoria, go to
http://www.faxnet1.org
A visit or phone call to other law
enforcement agencies may be required. For a list of all
Arizona city links, go to
http://www.azleague.org/links_city_town.htm
To find crime statistics on their websites, you may need
to search for "crime statistics."
Sex
Offenders
Since June 1996
Arizona has had a registry and community notification
program for convicted sex offenders. This information
may be accessed at
http://www.azsexoffender.org
Note that prior to June 1996
registration was not required, and only the higher risk
sex offenders are on the website. The presence of a sex
offender in the vicinity of the property is not a fact
that is required to be disclosed by the seller or agent.
Military and Public Airports
The legislature
has mandated the identification of areas in the
immediate vicinity of military and public airports that
are susceptible to a certain level of noise from
aircraft. The boundaries of these areas have been
plotted on maps that are useful in determining if a
property falls within one of these areas. The map for
military airports may be accessed at
http://www.re.state.az.us/airport.html
Maps for many of the public airports may be viewed at
http://www.re.state.az.us/airports/airportintro.html
These maps are intended to show
the areas subject to the preponderance of
airport-related nose from a given airport. Periodic
over-flights that may contribute to noise cannot usually
be determined from these maps.
Schools
Although there
is no substitute for an on-site visit to the school to
talk with principals and teachers, there is a
significant amount of great information about Arizona's
schools on the Internet. Public and charter school
information may be accessed at
http://www.ade.state.az.us/schools
or
http://www.greatschools.net/modperl/go
The ADRE advises: "Call the school district serving the
subdivision to determine whether nearby schools are
accepting new students. Some school districts,
especially in the northwest part of the greater Phoenix
area, have placed a cap on enrollment. You may find that
your children cannot attend the school nearest you and
may even be transported to another community." (
http://www.re.state.az.us/checklist.html
)
Zoning/Planning/Neighborhood Services
Phoenix:
http://www.phoenix.gov/webpmo.html
Scottsdale:
http://www.ci.scottsdale.az.us/show_cat.asp?id=5
Tucson:
http://www.ci.tucson.az.us/planning.html
Other cities
and towns:
http://www.azleague.org/links_city_town.htm
Other
methods to obtain information about a property
Talk
to the Neighbors
Buyers should
always talk to the surrounding neighbors about the
neighborhood and the history of the home the buyer is
considering for purchase. Neighbors can provide a wealth
of information.
Drive
around the Neighborhood
Buyers should
always drive around the neighborhood, preferably on
different days at several different times of the day and
evening, to investigate the surrounding area.
For
additional information, visit:
Arizona
Association of REALTORS® ("AAR") website,
http://www.aaronline.com
Arizona
Department of Real Estate ("ADRE") website,
http://www.re.state.az.us/
The National
Association of REALTORS® ("NAR") website,
http://www.realtor.com
NAR’s "Ten
Steps to Homeownership" is also a useful source of
information and may be found at:
http://www.homestore.com/finance/buyersguide/default.asp?Inksrc+REALR2LF2C0047&gate=realtor
Arizona Government
For information about Arizona
Government, including links to state agency websites and
a 2002 State of Arizona telephone directory:
http://www.az.gov/webapp/portal/subtopic.jsp?id=1225&name=Arizona+Government
Arizona city and town websites:
http://www.azleague.org/links_city_town.htm
BUYER
ACKNOWLEDGEMENT
Buyer
acknowledges that there may be other disclosure issues
of concern not listed in this Advisory. Buyer is
responsible for making all necessary inquiries and
consulting the appropriate persons or entities prior to
the purchase of any property.
The information
in this Advisory is provided with the understanding that
it is not intended as legal or other professional
services or advice. These materials have been prepared
for general informational purposes only. The information
and links contained herein may not be updated or revised
for accuracy. If you have any additional questions or
need advice, please contact your own lawyer or other
professional representative.
Buyer’s
Signature Date Buyer’s Signature Date
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