Purchasing real estate in the Phoenix area is a fairly straight-forward proposition, especially from the standpoint of the fees above and beyond the purchase price that are part of the transaction.
For those accustomed to transfer taxes, sales taxes and the like, rejoice … there are no such fees attached to a purchase in the Phoenix real estate market. In fact, the total fees you’re likely to encounter generally hover around 1% of the purchase price if there is no American mortgage involved and around 3% if there is a mortgage.
- Escrow fees – these are the fees paid to the escrow company for coordinating the entire transaction, making sure all the paperwork’s signed correctly and that the deed is recorded.
- Title insurance – the buyers’ title insurance policy insures that you have clear title to a property, even if you really don’t. Case in point – one of my clients once purchased raw land that later was determined to be landlocked. The title company, however, in reviewing the title never said the property was landlocked (why would my buyer have purchased land they couldn’t legally access?) but because the title company had insured the title to the property and insured legal access, it had to purchase the easements to give my client that access.
- HOA and insurance impounds – both the insurance company and the local Homeowners’ Association are going to want to see a couple of months’ worth of payments booked at the time of closing.
- Property taxes – most buyers will see a credit from the seller for taxes because property taxes in Arizona are assessed on January 1 but not collected until October and March 15 in semi-annual payments. But the buyer could be paying the seller if the seller has paid their taxes in full at some point before the close of escrow.
- Loan fees – These can run the gamut from doc fees to origination fees and discount points, depending on your loan.
There also may be small miscellaneous recording fees, but the above are the fees common to nearly all transactions. Also, you can expect to spend another $450 to $500 to hire a professional home inspector and termite inspector to review the property. And another $350 for an appraiser, though an appraiser isn’t mandatory in a cash sale.
One final note – Arizona is a non-attorney state, which is to say attorneys aren’t needed to complete the real estate transaction. Agents write the contracts and the escrow companies take care of the rest.
Got questions? We’ve got answers.
[tags]Phoenix real estate, Canadian buyers Arizona real estate[/tags]