Essential Guide / Info for Buying Arizona Property
Every state has different laws and practices regarding real estate transactions. Here are some items you NEED to be aware of before buying Arizona real estate. DO NOT ASSUME your agent will provide you with this information. Information here is not intended to be legal advice. The following applies to ALL Arizona Real Estate.
Your Choice of Real Estate Agent- Arizona is one of a handful of states that allow professional’s other than attorney’s draft legally binding documents. In other words, your real estate agent, combined with the title examiner and escrow officer, replace the role of attorneys’ in Arizona transactions.
Your real estate agent will draft your contract (all 15 or so pages) AND your agent must comprehend all it’s terms and conditions and attempt to foresee how a court may interpret your contract and it’s language. Contracts can have serious consequences and you and your agent need to understand your rights AND responsibilities. A part time agent who dabbles in real estate on weekends cannot possibly keep up with all the case law, local issues and trends regarding Arizona real estate. To find out more about us, click here. To find out all we do for our buyer clients, click here.
Title Theory State vs. Lien Theory State- Arizona is a Title State. Instead of giving a long boring discussion here about the differences between the two, here are the highlights and how they effect your Arizona real estate transaction.
Mortgages- Extremely rare in the State of Arizona. Instead of a mortgage, lenders will have you execute a promissory note and deed of trust as collateral for your loan.
Attorney’s– Not necessary to hire one to handle closings or establish a Chain of Title. Closings and title searches are handled by escrow companies, neutral 3rd parties to the transaction.
Deeds- Received within a few weeks of close of escrow, not when the property is paid off in full.
Foreclosure– Streamlined process which can take as little as 90 days.
Right to Rescission– There is no right to Rescission in Arizona, unless you are refinancing Arizona real estate you already own or buying vacant land sight unseen.
Usury Laws- There is no Usury law. Lenders may charge whatever interest rate they feel appropriate for your particular lending situation.
Closings- You do not have to be physically present to make an offer or close on property in Arizona. Everything can be handled by phone, fax, e-mail and US mail.
Mineral Rights- Do not transfer with purchase unless your purchase includes a patented mining claim.
Water Rights- In the simplest manner of speaking, the ownership of most of Arizona’s water and the right to consume it is in question. A lawsuit regarding the ownership has been laboriously moving through the courts since the 70’s. In other words, just about all “water rights” have come into question as to who really owns them, regardless of whomever the legal owner currently is.
Active Management Areas- Much of Arizona is an Active Management Area– State designated areas of concentrated water conservation and stringent restrictions on well drilling and water usage. The Verde Valley is NOT an active management area.
Residential Rental Property Registration- If you intend to rent the property you are purchasing, you must register it as rental property with the county where it is located. If you will not reside in Arizona, you must appoint an in-state statutory agent. Fines and penalties are quite stiff if you fail to comply.
Septic Tanks & Transfers- If the Arizona real estate you intend to purchase is served by a septic tank, it must be inspected and transferred to you as the owner by filing papers with Arizona Department of Environmental Quality. Be aware that many of the septic tanks in many counties may be “illegal, and /or non– conforming to the current standards.”
Wells & Transfers- If the Arizona real estate you will buy is served by a domestic water well, The well must be transferred by filing paperwork with Arizona Department of Water Resources. Be aware that older homes served by a well may not be up to current standards regarding distance between septic tanks and wells or set backs. Be aware that Yavapai county has a 50 ft set back requirement from undeveloped properties if you are planning to build on property which will be served by a well.
Disclosure Affidavit- Certain rural properties require the seller to give you this document prior to close. You will have 5 days from its receipt to investigate concerns and cancel the contract if not satisfied with the disclosures. This document MUST be recorded at close of escrow, or you may have difficulty obtaining building permits for your parcel in the future.
Washes and Flood Areas- Although this is the desert, flash flooding is very common in localized areas and can happen just about anywhere under the most extreme conditions. Thoroughly investigate if the real estate you are purchasing is in the vicinity of a wash, stream or creek bed.
Property Taxes- Paid in arrears. Unpaid property taxes accrue interest at the rate of 16% and the property is subject to foreclosure if they remain unpaid for three years.
Rights and Responsibilities- Click Here for a plain language discussion of your rights and responsibilities as a buyer of ARIZONA real estate if you are purchasing your property through a licensed REALTOR® , and will use the Arizona Association of Realtors® Residential Resale and Purchase Contract. Note: All Realtors® are required to use this contract, so most likely, this is the contract you will be using!
Read a Copy of the Arizona Buyer's Advisory- The AZ buyers advisory is chocked full of items many people wouldn’t ever think of when purchasing a home AND provides tips and websites where you can gather information regarding items that may concern you. Highly recommended reading for EVERY buyer of Arizona real estate! Click here to view this document a copy.
Learn, and be prepared to live by “The Code of the West”- Living in the rural Southwest may present newcomers with a few unfamiliar issues and situations. Click here.