Important considerations when buying in Arizona

As home prices have declined in Arizona, the goal of many Canadian citizens of owning a home in the U.S.  has become a reality.  Instead of shoveling snow and battling freezing temperatures, Canadian second home owners can be dealing with other issues such as which golf course should I play today, or how early do I want to get up to go hiking or jogging, and where should we go for dinner.  I’ve also noticed that many Canadian homeowners who live on a lake in Canada have a desire to duplicate that scenic landscape and have inquired about lakefront homes in Phoenix.  When a buyer from Canada decides to pursue owning property in Arizona, there are some considerations they should be aware of.

Getting a loan in the U.S. as a Canadian citizen

A frequent question is, “Can a Canadian get a loan through a U.S. bank?”  It has been somewhat of a moving target; however, as of this writing there are companies that do offer loans to Canadians through a U.S. bank.  There are some conditions.  For example, one lender requires that the down payment must be at least 30% and the borrower must have 6 months reserve in a U.S. bank.  And the maximum loan amount is $417,000 and requires a 700 FICO score.  It’s best to talk to a loan officer that is familiar with these loan options.   If you’d like contact information on banks that do provide loans to Canadian citizens, please call me directly.

Earnest Money, Escrow and Signing

Earnest money which is used to open escrow once the offer has been accepted must be in U.S. funds.  Another difference is that in Arizona attorneys are typically not involved in the transaction.   Title/escrow companies take care of the title insurance and make sure the contract is executed as written.  This makes for a much more streamlined escrow and smooth closing process.  In fact, the buyer(s) do not need to be present at closing, and the necessary paperwork can be signed in Canada and sent via priority mail to the title/escrow company prior to closing.  Possession takes place once the transaction has recorded with the county recorder.

When a Canadian buyer is ready to place an offer on a house and no financing will be required since it will be a cash transaction, the proof of funds (typically a bank statement) may be required to be in U.S. funds.

Inspection Period

The 10 day inspection period begins once the offer has been accepted. During this time, it is the buyer’s opportunity and responsibility to inspection the property and the surrounding area in detail. The Arizona Department of Real Estate has provided the Buyer Advisory to assist buyers in their due diligence.

Most Arizona properties are platted and do not require a survey.   This is different from Canada where a surveyor’s certificate is required.

FIRPTA – The Foreign Investment in Real Property Tax Act

 The Foreign Investment in Real Property Tax Act (FIRPTA) kicks in when the seller is a foreign person. Typcially not an issue when buying a property, it will come into play when selling.  One of the exemptions to FIRPTA is that the house sells for  less than $300,000.   It is in place to insure that foreign persons are not purchasing property only to sell it later at a profit without paying taxes.  A foreign person is a nonresident alien individual; a foreign corporation not treated as a domestic corporation; or a foreign partnership, trust or estate. A resident alien is not considered a foreign person under FIRPTA. IRS Publication 515 can provide more detailed information.

The Phoenix area provides a great second home get-away for Canadians looking for a repreive from the harsh winters.   For detailed information regarding Arizona homes for sale, contact me at your convenience. Or receive property listings via e-mail that fit your winter vacation home criteria.

Here’s some feedback from one of my favorite Canadian clients  last year who live in Alberta and their feedback on the process:

“Just thought that we’d drop you a quick note to let you know how much we enjoyed working with you on the recent purchase of our home in  Phoenix.  No surveyor’s certificate and no legal fees made the process a lot less stressful than buying our home in Alberta. 
We, seriously, don’t know how we would have managed without you.  Since the inspections, utilities hook-ups, and all the paperwork were initiated by you, all we had to do was – literally – get the key and move in.
So “THANK YOU” and be assured than we are passing your information on to anyone we meet who talks about investing in property in Arizona.
All the best,
Jim & Annette
Millet,  Alberta  ”

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3 beds, 2.5 baths
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Lakeside family home, on a CUL DE SAC, now available in prestigious PINELAKE ESTATES. The home features a SPLIT FLOOR PLAN with large entertaining area, stone-trimmed fireplace, and front BONUS ROOM usable as either OFFICE or GAME ROOM. Prepare dinner in the large CHEF'S KITCHEN while friends keep you company at the large island counter. Enjoy outdoor living and VIEWS of the lake from under the substantial COVERED PATIO or from the SPARKLING POOL. This home is situated in a highly desirable area with NATIONALLY RANKED SCHOOLS and the award-winning Ocotillo Golf Club nearby. Within minutes of SHOPS and DINING and easy FREEWAY ACCESS, this home provides all the amenities your family could want for easy living.

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2 beds, 2 baths
Home size: 1,764 sq ft
Lot Size: 3,484 sq ft
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* Spectacular remodel in the popular Cantabria Shores * Custom white shaker cabinets with quartz counter tops * Professional series appliances with full size separate refrigerator and freezer * New wood look tile and upgraded carpeting throughout * Also replaces all baseboards, sinks, hardware, plumbing fixtures, toilets etc... * Prime poolside unit * Handset subway tiled in both bathrooms * Kohler plumbing fixtures and pottery Barn light fixtures * Truly amazing property *

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$320,000 :: 3800 S CANTABRIA Circle #1005, Chandler AZ, 85248

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2 beds, 2 baths
Home size: 1,564 sq ft
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Life is Good at Cantabria Shores on the Ocotillo Golf Club! (Mickelson Golf Properties recent acquisition). Enjoy relaxing or entertaining in this 2 Bed/2Bath Condo, overlooking the SIGNATURE HOLE on this Ted Robinson designed 27 Hole, Public, Course surrounded by mature trees, water hazards, & gorgeous Emerald Fairways! Phil (Lefty) was smart! Sitting on your Expansive Terrace you'll have a Crow's Nest View year-round! Cantabria is a Gated Community w/ Heated Pool/Spa & BBQ adjacent to Ocotillo Golf Club, Driving Range, Pro Shop, Lockers, Patio & Grill! (See Doc's about Oasis Card Discounts & Condo Features). All living is on the 2nd Level, with 2 Car Garage, & Extra Storage below. Great Room Concept, 10" Ceilings, Fireplace, & "like-new" SS Appliances. Each Bedroom has its own Terrace!

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