To ensure your home purchase is legal, it’s important to follow all rules and laws implemented at the national and state level. These should be discussed with your real estate agent and, possibly, a real estate attorney before the completion of any transaction.
Home seller and buyer laws
Real estate property disclosure forms: According to Arizona law, sellers must disclose important facts about the property even if the buyer or real estate agent never asks. The Arizona Association of REALTORS offers a seven-page “Residential Seller’s Property Disclosure Statement” to aid sellers. It addresses such topics as association fees, assessments on the property, roof condition, foundation condition, wood infestation, heating and cooling systems, plumbing, swimming pool, electrical system, home improvements and/or maintenance, and environmental issues. Disclosure of these issues is required even if both the seller and buyer agree no statement will be provided.
When purchasing a home built before 1978, the buyer should also receive a “Disclosure of Information on Lead-Based Paint & Lead-Based Paint Hazards (Sales)” form, which is available through the Arizona Association of REALTORS.
Judicial or non-judicial foreclosure state: Arizona utilizes both judicial and non-judicial courses of action to address foreclosures. For non-judicial foreclosures, also called trustee sales, the lender repossesses the home and sells it off to pay the loan. In a judicial foreclosure, the lender files a lawsuit against the borrower to foreclose on the home. It is up to the lender to choose which method to pursue.
As Arizona is a community property state, the law dictates that all property acquired during a marriage belongs equally to the husband and wife and will be split 50/50 in the event of divorce. Exceptions can be made for property that was acquired by gift or inheritance or after filing for divorce.
Arizona doesn’t require an attorney to be present when you close on your home. Instead, as an escrow state, an escrow office will handle the documents and closing process. In addition, a title officer will research the property to ensure there are no liens or other ownership issues related to the property.
Summary of real estate transfer taxes: Arizona does not impose any real estate transfer taxes.
Property tax exemptions: In Arizona, each individual county determines its own exemptions for property taxes. For instance, in Maricopa County, which includes Phoenix and Scottsdale, widows and widowers and totally disabled persons age 17 or older may receive a property tax exemption provided they meet certain income and other requirements. Check with your local county tax assessor to determine if you are eligible for property tax exemptions.
Typical property taxes: Arizona property taxes vary based on location, but the median is $1,356 per year on a home valued at $187,700, according to Tax-Rates.org. On average, Arizona counties charge 0.72% of the property’s assessed fair market value. The state’s highest property tax is found in Pima County (Tucson), which collects an average of $1,614 per year. In contrast, Greenlee County, which borders New Mexico, collects an average of just $303 annually.
Conforming loan limits
In Arizona, the conforming loan limit for mortgages on one-unit dwellings is $484,350 across the state. This limit applies to mortgages acquired by government-sponsored enterprises Fannie Mae and Freddie Mac. Each year, the Federal Housing Finance Agency (FHFA) sets the conforming loan limits.