Phoenix Real Estate Questions From A Canadian Buyer, Part 6
Canadians Buying Arizona Real Estate
Today is a great time for Canadians to buy real estate in Phoenix, Arizona. The combination of the strength of the Canadian dollar, and the depressed Arizona Real estate market...has created a great opportunity for Canadian buyers.
As you know this is a blog series where I am answering the questions of one of my Canadian clients.
What should we expect for legal fees? Escrow – what is this?
In the State of Arizona we do not use an attorney in a typical real estate transaction. Escrow is a third party who's job is to follow the written instruction of the contract (police the deal when there are conflicting ideas as to what the contract means, or when one party is in breach on contract).
The Escrow company will do a title search and give title insurance to the new buyers protecting them from any liens that the previous owners may have had on the property.
“Fee simple” What is it and is that the most complete form of ownership in USA
Fee simple is the most complete form of ownership in the State of Arizona. In Arizona some of our homes are built on leased land. I discourage all of my clients from buying homes built on leased land. Homes built on leased land are harder to sell and don't appreciate as well. If you own a home built on leased land you are also at the mercy of the land owner.
I know a family that bought a home in Scottsdale on leased land. They purchased the home about 15 years before the land lease was up. At the time they purchased they thought that in 15 years they would no longer be living in the house...and the land lease was only $40 per month. 15 years later this family was still living in the home...and their land lease went from $40 per month to $550 per month! Don't buy a home built on a land lease!
Home inspections, how much do they cost? How long do they take?
A general inspector will cost between $275-400. This will cover a general inspection of the home and a termite inspection. A general inspector will let you know if you need to hire a specialized inspector (like a roof inspector, a mold specialized, etc.) A general inspection will take between 2-3 hours depending on the size and condition of the home.
Home appraisals, how much do they cost? How long do they take?
In Arizona home appraisals only occur when it is required by the bank. If you are buying a home with cash...which is not uncommon for Canadians, or putting more than 30% of the home's purchase price down your bank will probably not require you to get an appraisal.
If you are borrowing the majority of the home's purchase price a bank will require you to get an appraisal to protect their assets (which is there $$$). Appraisals cost between $350-500, and are usually done in an afternoon.
“Closing costs”, what are they? What do they include, how much are they (percentage or how is that calculated), Who generally pays these? Is that negotiable?
Closing costs are any cost associated with the purchase of a home...which include loan costs, appraisal, inspection, and title and escrow fees.
How much they are is largely dependent on the amount of your loan. For a typical Phoenix Valley home buyer borrowing the majority of the home price through a loan, closing costs are 2-3% of the homes purchase price.
Every aspect of the real estate contract is negotiable! In our current real estate market it is common for the seller to pay the buyers closing costs.
My next blog will continue with more legal and procedural questions regarding buying real estate in the Phoenix Valley. However, please let me know if you have any additional questions or are interested in buying real estate in Phoenix Valley!
Date: Monday, April, 21st 2008 @ 09:57:43 AM Views: 472
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