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
