As in most states, a number of rules and regulations govern homebuying in Phoenix and throughout Arizona. Here is what you need to know:
Home seller and buyer laws
According to Arizona law, sellers are required to disclose all important facts they know of to buyers in the form of a property disclosure statement, even if they aren’t directly asked for the information. The form asks for details about ownership, building safety, environmental hazards and the state of the home’s utilities and sewage system. At the bottom of the form, sellers are asked to list anything else that might adversely affect the value of the property.
Arizona — and, by extension, Phoenix — allows for both judicial and non-judicial foreclosures, which means it’s up to the lender to decide whether or not to go through the court system in the event of having to foreclose on a home. Still, in
Arizona, non-judicial foreclosures are more common since they are often cheaper and take less time. In either case, Arizona law allows for so-called deficiency judgments, which means the lender may, under certain conditions, be able to sue you after foreclosure to recoup any losses.
Arizona is what is commonly described as a community property state. This means all property acquired during a marriage — including any real estate property — must be split equally in the event of a divorce or annulment, regardless of the circumstances or whose name is on the title. This is different from living in a so-called equitable distribution state, where a judge typically decides how to split a couple’s assets based on factors such as individual income and whether the couple has children.
It’s important to know what type of state you may be living in. For example, if you plan on taking on a VA or FHA loan in a community property state, your spouse’s debt will be considered when your mortgage is under review for financing, even if the spouse is not on the loan for qualifying purposes.
Arizona is an escrow state. This means it does not require buyers to hire an attorney to close on a home. Instead, buyers are allowed to use a representative from an escrow or title company.
Unlike many other states, Arizona does not charge real estate transfer taxes. In 2008, the Arizona Association of Realtors helped pass legislation to prohibit state and local governments from imposing such a tax.
In Arizona, property tax exemptions are determined on a local level. In Maricopa County, widows, widowers and people with a qualifying disability may be eligible to have the assessed value of their property reduced with a corresponding reduction in tax. For those who aren’t exempt, the median property tax amounts to $1,418 per year for a home worth $238,600, or about 0.59% of the home’s fair market value, according to Tax-Rates.org.
Conforming loan limits
The conforming loan limit for a single-family home in Maricopa County, and the rest of Arizona, is $484,350. This number represents the maximum amount that two government-sponsored entities, Fannie Mae and Freddie Mac, are willing to insure on conforming loans, which generally offer the best interest rates for buyers who have good credit. Loans over this limit are called “jumbo loans,” and they’re generally riskier for both lenders and buyers.