The following is a checklist of helpful hints for consumers to help avoid some of the pitfalls of purchasing a new or used home, or raw, undeveloped land.
New Homes in a Subdivision
- The Public Disclosure Report must be provided to a prospective purchaser by law, before signing the purchase contract. Purchasers are to sign a receipt for the Report. A purchaser acknowledges receipt of the report upon signature.
The Disclosure Report (Public Report) includes:
- Flooding and drainage disclosure
- A description of adjacent land and uses
- Who provides electricity, telephone, gas, water and sewage disposal
- Common community and recreation facilities
- Assurances for completion of improvements
- Local services and facilities, including schools, shopping facilities, public transportation, medical facilities, fire protection, ambulance service, police protection and garbage services
- Taxes and assessments
- Property owners association details
Questions about the Disclosure Report (Public Report) can be submitted to the Arizona Department of Real Estate, Development Services Division through the Message Center, click here. A Subdivision Representative will respond and assist you.
The disclaimer included on the cover sheet of the Disclosure Report (Public Report) should be read carefully.
"Not all of the information in this report has been verified by the Department; certain information has been accepted by the Department as true and accurate based on attestation of the subdivider and/or the subdivider's agents. You should verify all facts before signing any documents."
- Read the purchase contract carefully. Note where the builder or developer is placing earnest money (ie. escrow, builder's or developer's general funds account). The purchaser must initial a separate paragraph in the purchase contract if earnest money is not placed in escrow.
In areas where there are expanses of vacant land nearby, check city or county zoning maps to see if nearby property is zoned for apartments, industrial or commercial use. Land zoned for commercial use might be used to construct anything from a shopping center to a hotel. To obtain this information, call the city or county planning and zoning department where the property is listed.
- A prospective purchaser may wish to view the location of the property before signing a purchase contract to identify any issues or concerns. In areas where there are expanses of vacant land nearby, check city or county zoning maps to see if nearby property is zoned for apartments, industrial or commercial use. Land zoned for commercial use might be used to construct anything from a shopping center to a hotel. To obtain this information, contact the city or county planning and zoning department. Check Arizona Department of Transportation maps to find the nearest future freeway routes, and whether roads in the area are slated for widening.
- You may wish to call the school district serving the subdivision to determine whether nearby schools are accepting new students.
- Review the deed restrictions, also called CC&Rs (covenants, conditions and restrictions). Some community rules and restrictions stated in the CC&Rs may restrict certain landscaping, RV parking, play equipment, satellite antennas, and other common amenities, particularly if the subdivision is governed by a Homeowner's Association (HOA).
- You may wish to look up the homebuilder with the Arizona Registrar of Contractors regarding their contractor status.
Previously Owned Homes
- Be aware that the seller's broker does not represent you; the seller's broker represents the seller. You may wish to retain the services of a buyer's broker to represent you in the transaction.
- Read the seller's property disclosure report and 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.
- Consider having a termite inspection.
- Consider having the home inspected by a professional home inspector.
- Confirm that the applicances work, including the stove burners, oven, garbage disposal, dishwasher, washer and dryer and the water heater.
- Confirm that the water runs and irrigation operates properly.
Raw Undeveloped Land
- Ask to see the Arizona Department of Real Estate Disclosure Report (Public Report) before signing a purchase contract. The contents of the Report are described in the "New Homes in a Subdivision" section above. Pay particular attention to the source of utility services, and any future obligations. If the developer cannot produce a Disclosure Report (Public Report) on property that is smaller than 160 acres, and there are more than five parcels, the subdivision is likely illegal. A Disclosure Report (Public Report) will provide information on water supply, and permanent legal access to the property.
- Ask to see the Arizona Department of Water Resources report for the property. Determine that there is an assured or adequate water supply (depending on whether the property is in or outside of a Groundwater Active Management Area), and how much it will cost to have a well dug if necessary.
- Be aware when purchasing raw land with the intent to develop into smaller parcels that a Disclosure Report (Public Report) issued by the Arizona Department of Real Estate is required for six (6) or more lots or parcels. For more information about applying for a Disclosure Report (Public Report), contact the Development Services Division through the online Message Center, click here. A Subdivision Representative will respond and assist you.
- A purchaser has seven (7) calendar days following the date the purchase agreement is signed to rescind the purchase in writing without cause. The seller must receive the rescission notice by midnight of the seventh (7) calendar day. The seller must clearly and conspicuously disclose the right to rescind the purchase. The right of rescission does not apply to new or previously owned homes.
- A purchaser has six(6) months in which to inspect the land, and the right to rescind the purchase at the time of inspection.