Sunday, April 06, 2008

Selling a Home in AZ and Not Sure What to Disclose to the Buyer?

I recently received an email with this question about disclosure of sex offenders when selling a home in Arizona:

"Recently in USA Today 3/20/2008 in an article written by Matt Reed, he stated  " Arizona has one of the nation's toughest laws, requiring sellers and agents to disclose neighboring sex offenders to potential buyers."

Yet Arizona real estate law attorney Richard Keyt stated on his website the following: " The presence of a sex offender in the vicinity of the property is not a fact that is required to be disclosed by law."  His web page was last revised 3/23/2008.

Additionally, a form from the Arizona Association of Realtors, Residential Seller Advisory version 02/2008 stated: "By law, sellers are not obligated to disclose that the property is or has been: ( I'll skip to paragraph 3: located in the vicinity of a sex offender."

My question is has the governor or the legislation changed this provision of law recently? Who is correct?"

First, I have to say that I'm not an attorney so I can only address this question in the general sense and from a Realtor's perspective.  So do not consider my answer as legal advice, and ALWAYS consult an attorney for questions about your own specific situation.

Second, don't believe everything you read in the mainstream media!  Of course, you can't believe everything you read on the internet either.  But I do know bloggers who are much more thorough about checking facts than some of the major media outlets.

Arizona legislators are constantly updating our laws, and real estate disclosure is a hot topic.  However, I don't think a change to the law is the source of confusion in this case.  From my experience, I'd say all of the sources quoted are technically correct.  I think this is the USA Today article that was referenced in the question, here's the AZ real estate attorney who was mentioned, and here's the Arizona Association of Realtors (AAR) Residential Seller Advisory form.

The AAR Residential Seller Advisory does indeed state, "By law, sellers are not obligated to disclose that the property is or has been... located in the vicinity of a sex offender."  But if you keep reading, it goes on to say, "However, the law does not protect a seller who makes an intentional misrepresentation."  And then the top of the next page says, "Sellers are required by law to disclose all known material (important) facts about the Property to the Buyer".

So what is considered to be "material" or "important"?  Generally, anything that may affect a buyer's decision to buy is definitely material and should be disclosed.  To be safe, I tell sellers that EVERYTHING is material to the buyer.  At least, a seller has to assume that everything is material because they don't know what's material to the buyer.  Every buyer is different... what seems minor and unimportant to the seller may very well be minor and unimportant to one buyer.  However, that same item may be extremely important, and thus material, to another buyer.  If it ends up in front of a judge, I would guess that anything and everything the buyers find out later, that the seller knew and didn't disclose, will be considered material!

The AAR Residential Seller Advisory reinforces this idea with it's heading, "When in doubt, disclose!".  If the sellers know there's a sex offender living down the street and the buyers ask, I would tell the seller to disclose it, in writing, to protect both the sellers and the buyers.  Even if the buyers don't ask, I would still tell the sellers to disclose it, in writing.  It doesn't matter if the buyers are older or don't have kids.  You cannot assume they don't care about a sex offender living nearby.  They may have grandchildren who visit and play outside, or friends that come over and bring their kids.  My point is, you shouldn't try to get inside the buyer's head and figure out what is, or is not material.  Only the buyer can decide that.  Just disclose it and let the buyers make that call... whether it's a maintenance problem, or something you know about the neighbors, homeowners association, schools, etc.  Disclose whatever you know.

I know many people are reading this thinking, "Disclose it, even if it they don't ask? That would probably kill the deal."  Well, it's better to kill the deal now than end up in court later.  And actually, being honest from the beginning by making full disclosure reduces the risk of a last minute deal-breaker, 29 days into the transaction.  As a seller, if the deal isn't going to close, don't you want to know right away instead of AFTER your house has been off the market for a month?

Full disclosure isn't just for sellers either.  It's a two-way street.  Buyers should also disclose anything that might be material to the sellers, like if they know something which may affect their ability to qualify for a mortgage.  The "golden rule" can (and should) be applied to real estate transactions, just like anything else in life.  Every transaction is smoother, less stressful and turns out better in the end if both parties are honest and upfront with each other from the beginning. 

But buyers, don't be naive!  You should NOT rely on the sellers to disclose all material facts about the property you're buying.  Even if the sellers are honest people, they may not know all the material facts.  So buyers must also do their "due diligence" by investigating everything that's important to them.  The AZ Department of Real Estate advises buyers to read and investigate the items on this checklist for Arizona home buyers.  While the law may require certain disclosures, "Buyer Beware" is a reality!

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on April 6, 2008 | Permalink | Comments (14) | TrackBack

Monday, March 24, 2008

Homeowner Needs Help with HOA Issue

I get many emails from homeowners who are having problems with their Homeowner Associations, and are seeking advice.  I'm not an attorney, so I can't offer advice on how to handle specific HOA problems.  But I've been there myself, so I found the email below particularly interesting.  Without revealing any personal information, I'm posting the majority of the email along with my response:

"I don't know if you can help me with this but if you can offer some help or direction that would be greatly appreciated.  I have a truck that I have had parked on the side of my house for four (4) years.  Nothing was ever said.  Now, I have received a letter from my HOA telling me I can't park it there because it can be seen over the gate.  Maybe six (6) inches of the roof.  And, that it is parked in a "Landscaped Area", which it is not. It is a utility area that is not landscaped at all.

We buy these houses with big double gates so we can utilize the area behind these gates for things like this.  I can understand if it was something offensive, but no one has ever complained or said anything about the truck being there till this.  Any help?"

My Response...

"...I'm sorry you're having a problem with your HOA.  I had a similar problem myself and know first hand how frustrating it can be.  Obviously, every situation is different and your situation is probably based on very different facts, CC&R's, legal principles, etc.  And I'm not sure if you're in Arizona, but state laws also can affect your situation.  So the best advice I can give you is to seek advice from an attorney, which I am not.  From a homeowner standpoint, I can tell you that when I consulted an attorney in a HOA situation several years ago, the advice I was given was to work within the neighborhood to gain support and resolve the problem.  Here's what happened to me several years ago:

We had a nearly new pickup truck parked in the 'third-car' area of our driveway.  But it wasn't paved like the rest of the driveway, it was covered with rocks.  The truck was driven every day, and we had been parking it there for about 3 years or more when a certain Board member decided to make a stink about it.  Our attorney told us that in our case, by allowing us to park there for several years, the HOA had given us "constructive notice" that it was allowed.  Our CC&R's did not specifically prohibit it, however they did not specifically allow it either.  So our attorney claimed that in the absence of a restriction, it was permitted.  Then the Board member tried to use some vague landscaping clause to make us stop parking there.  Of course, there were others in the neighborhood who parked in a similar manner, so we found them and got them to show up at the next meeting for support when we addressed the Board.  Since only a few people usually showed up to Board meetings, we only had to get a few neighbors to show up to have overwhelming support.  We also went to each of our immediate neighbors and had them sign statements saying that we had been parking there for years and they had no problem with it.  Additionally we went door-to-door and asked other neighbors who agreed we should be able to park there to sign a petition so we could amend the CC&R's to specifically allow it.  We came up just short of the 2/3 required for an amendment to the CC&R's, but it was enough to make the other Board members agree to drop the issue.  Shortly thereafter, the Board formally adopted a policy which allowed parking on rocks with certain criteria, which we met.  End of story.

Again, your overall situation is different than mine, so you should speak to an attorney about the legality of your issues.  Much of the HOA's power comes from the CC&R's and an attorney can explain your rights under the CC&R's.  From a non-legal standpoint and from my experience as a homeowner, the power a HOA has comes from its members.  The unfortunate truth from my experience with HOA's is that in many cases, most members don't care and won't get involved in things they don't care about.  But if you can find those neighbors who are in similar positions, you may find strength in numbers.  Or you might find that others disagree with you totally and you are the minority in your neighborhood.  But chances are, there are others out there who recently got notices to stop doing things they've been doing for years also.  Did you recently have a new Board member elected who might be pushing a stricter agenda?

Again, other than telling you of my experience, you're in lawyer territory!  While I can't advise you on how to handle your situation, I hope my story helps.  And I wish you the best of luck in resolving your HOA issues.

Sincerely,
Shannon

Hope you found this interesting too.  Have a great day!

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on March 24, 2008 | Permalink | Comments (16) | TrackBack

Friday, August 03, 2007

Monsoons Make Arizona Homebuyers Rethink Toscana

Yes, the monsoons are back!  Over the past week or so, many areas of the Valley have seen some pretty major flooding.  Even the national news channels have shown stories of flooded AZ streets and people being rescued from their cars (remember Arizona's Stupid Motorist Law!).  As I drove through several Mesa neighborhoods earlier this week (trying to avoid the backed up traffic on major streets due to flooding), there were kids in their swimsuits standing near puddles on the corners, waiting for cars to come by and splash them!  Neighborhoods parks (retention basins) were flooded so badly they literally looked like lakes.  Kids were playing in the water on rafts and tubes.  Many teenagers had their quads out, driving along the edge of the 'lake' pulling their friends through the water on tubes.  It looks like fun, but I'm way too old for that!  I wanted to get a picture of some of the older kids in my neighborhood to post here, but my teenager wouldn't let me because she knew some of the kids and said it would 'be way too embarrassing"!

While the monsoon floods are fun for Arizona kids, homeowners don't find flooding quite as entertaining.  Drainage is something homeowners always need to be concerned with, and it's something that should definitely be considered when purchasing real estate.  This week, Phoenix, AZ residents of Toscana found out the hard way just how important drainage really is, even when buying a luxury condo.  A BlogArizona reader sent me the following email with questions about the recent Toscana floods:

"...I have heard from a local AZ friend that the garages in the Toscana development have flooded during the recent rains, causing a total loss for the cars parked there. I was considering a unit in the development.

Do you or your readers know if this is true? And what went wrong? And what needs to be done? And what would be the repercussions to the development.

Unfortunately for many, it's true - the underground parking garages at Toscana flooded and destroyed several luxury cars.  Toscana's HOA is refusing to accept any responsibility as of right now and is telling residents to check with their automobile insurance companies for coverage.  The HOA says the flood was an act of God that could not have been prevented.  However, many residents are already threatening lawsuits, stating that the floods could have been prevented with proper drainage.  I'm neither a Toscana resident or a lawyer, but it seems to me the developers (Statesman) not only could have, but should have foreseen monsoon flooding in an underground parking garage.  Monsoons come every year, and proper drainage is a basic requirement for any project or development.  It will take some time, and a bunch of fighting between the residents, the developer and the HOA before it's clear who will pay for the flood damage.  But I personally find it hard to believe that either the developer or the HOA can totally escape liability for this drainage problem.

Here's a local news story about the flooded parking garage at Toscana, and here are some videos about the Toscana flooding.

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on August 3, 2007 | Permalink | Comments (0) | TrackBack

Friday, April 13, 2007

BlogArizona.com Welcomes the Arizona Mortgage Guru!

Those who read BlogArizona.com regularly have probably noticed that I myself have been a blog mute over the past few months!  To the many people who read BlogArizona.com each day, I sincerely apologize for my absence.  Of course, there's no excuse to neglect your blog :)   But I will say (in my defense and in defense of the AZ real estate market in general) that I've been crazy busy lately!  No matter what the newspaper or other media may say, BUYERS ARE BACK TO THE ARIZONA REAL ESTATE MARKET!  That's why I haven't blogged lately!

Now that we've established that the Arizona "real estate bubble" is still not bursting, I want to welcome Shailesh Ghimire to BlogArizona.com.  Shailesh is the Arizona Mortgage Guru and a local Home Loan Expert.  Shailesh and his wife Aimee are a team at CTX Mortgage, serving the Greater Phoenix area.

If you've read Shailesh's first BlogArizona post or visited his blog, I think you'll agree that Shailesh will make a great addition to BlogArizona.com.  I have no doubt that his posts will add interesting and current content that BlogArizona readers will enjoy.

I also want to say that while I haven't posted much lately, I have been working on some new upgrades/features for BlogArizona. These improvements will be added over time, and that's all I'm saying so you'll have to keep checking back to find out what they are!  BlogArizona.com is also looking to add new Contributors.  Here's more information if you or someone you know is interested.

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on April 13, 2007 | Permalink | Comments (2) | TrackBack

Tuesday, June 20, 2006

New Law Helps Arizona Homeowners with HOA's

Arizona Governor Janet Napolitano recently signed House Bill 2824 into law, giving Arizona homeowners one more tool to fight back against abusive homeowners associations (HOA's).  The new law, which goes into effect 90 days after the legislative session ends, will enable homeowners to have their HOA disputes heard before a judge rather than having to file an expensive lawsuit.  The filing fees haven't been set as of yet, but the non-refundable filing fee is expected to be around $500 versus what could be tens of thousands to file a lawsuit.  Most lawyers oppose the new law, while most homeowner advocates support it, so it must be good for homeowners!  I believe it will help to level the playing field between the homeowner and the HOA.

Personally, I have mixed emotions about HOA's.  I'm currently the President of a commercial property owners association, and I have worked closely with the Board of Directors in other HOA's.  I have seen first hand how great a community can be if it has a good HOA, and how miserable it can be with a bad one.  While homeowners associations can be good for property values, a "bad" HOA can seriously mess up your life.  Because they have the power to lien and foreclose on your property, it is important that you stay paid up on your dues and promptly deal with any fines or non-compliance issues, no matter how angry you become!  I've seen homeowner associations turn a couple hundred dollars into thousands of dollars in fines, late fees and interest in a relatively short period of time. 

So what is a bad homeowner association?  First, it's important to understand how HOA's work.  A homeowners association is usually made up of two components - 1) the elected Board of Directors, who are members of the association, and 2) the property management company, who is hired by the association to take care of the association's daily operations. In my opinion, a "bad HOA" is bad either because it has a "bad" Board of Directors or it has a "bad" management company, or both.  My experiences both in residential and commercial real estate have lead me to the conclusion that property management companies are some of the sleaziest people in the real estate industry.  (Just my opinion, of course!).  I think the reason for this is that property management is not a licensed activity - anyone can do it.  Don't get me wrong, there are many really good property management companies that provide great service to their clients.  But the ones that are "bad" do a huge disservice to their entire industry.

As far as the Board of Directors go, they can be "bad" in more than one way.  If your association has that one Board member that wants to measure everybody's grass and make sure it's not out of compliance, that is "bad" in my opinion.  That's the guy I call the "Neighborhood Nazi", and I've met him!  As long as the Board has other reasonable members to overrule the Neighborhood Nazi, the HOA can still be okay.  If there are more Neighborhood Nazis than reasonable members on the Board, I would call that a "bad" HOA.  The Board of Directors can also be a problem if they are too passive, what I call an "absentee Board of Directors".  Unfortunately, when a management company realizes they are dealing with an "absentee Board", they will often take advantage of the situation.

Remember, not all homeowners associations are bad.  But also remember that even a good HOA can quickly become a "bad" HOA with the election of one or more new Board members, and vice versa.  But the "bad" HOA's worst enemy is the informed, involved homeowner...so be sure to go to meetings, vote and participate in your association.  And even more importantly, before you purchase a home, carefully read the CC&R's.  I know they're usually long and boring, but sometimes they have rules you don't expect like you must have at least 2 citrus trees in your front yard, or you can't park a pickup truck in front of your house overnight.  So use your inspection period wisely and inspect more than just the house, inspect the association before you buy!

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on June 20, 2006 | Permalink | Comments (14) | TrackBack

Tuesday, May 30, 2006

And You Thought Your Homeowner's Association was Hard to Please!

This article I found on grow-a-brain about a homeowner in the United Kingdom would be funny if it wasn't actually happening to someone.  I don't think it's actually a homeowner's association, but more like the locality enforcing (code?) compliance that sounds an awful lot like CC&R's!  The article says it's the Salisbury district council enforcing compliance with a "listed enforcement notice".

Anyway, I understand the principle, but if you read the whole article, they wanted her to cover her house in manure (a "weathering agent") so that her brickwork would "exactly match" that of her neighbors!  Who can really blame her for not selecting that option!?  The other alternatives they gave her weren't great either, but the point is that she used an alternative that the Council gave her and now they're trying to fine her 20,000 pounds because it didn't work.  What a country!  I don't keep up on exchange rates, but I think 20,000 pounds is somewhere between $30,000 - $35,000.  If I was this lady, I'd be looking for a new (more reasonable) place to live!

So next time you think your homeowner's association is being unreasonable, just be thankful you're not being asked to apply manure, soot or yogurt to your home's exterior!

Written By: Shannon Hubbard Realtor®-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on May 30, 2006 | Permalink | Comments (0) | TrackBack

Sunday, July 31, 2005

Official Launch of BlogArizona.com!

Today is BlogArizona.com's official launch date!  We have been working for several months now to add features and get the site ready...so check it out!  There's plenty to see while you are here:

• Read up-to-date articles written by Arizona real estate professionals
• Make a comment!
• Search Arizona MLS
• Use our mortgage calculators
• Make a comment!
• Take our poll
• Check today's mortgage rates
• Join our Frequent Blogger Club
• Find out how much your home is worth
• Make a comment!
• Interview a real estate professional
• Ask an Expert
• Suggest an article
• Read the daily cartoon
• Make a comment (Okay, I know...you get the idea now!)
• Set-up an automatic reminder for your new home 1-year warranty inspection
• Tell-a-friend about BlogArizona.com
• Read 'Today in History'
• Add a free FSBO listing
• Buy fun & unique real estate gifts in our online store
• Search our archives
• Buy or sell moving boxes

Best of all...you can find out what the heck a blog is!  And don't forget to make a comment while you're here (Did I mention that already?!).

Check back with us regularly for the latest Arizona real estate news and trends.  Thanks for visiting!

the BlogMaster

Posted by BlogArizona BlogMaster on July 31, 2005 | Permalink | Comments (0) | TrackBack

Sunday, May 08, 2005

AZ Dept. of Real Estate Helps Home Buyers & Sellers

The Arizona Department of Real Estate has created a publication to help guide home buyers and sellers through the process more smoothly.  In addition to providing information about the Arizona Department of Real Estate, "Arizona Real Estate and You (a Consumer's Guide)" also contains a wealth of other information:

• choosing a real estate broker
• preparing to sell your home
• disclosure
• buying a home
• the offer, purchase contract and counter-offers
• negotiating the deal
• the escrow period
• home financing and different types of mortgages, VA & FHA loans
• the home inspection, appraisal, home warranty, survey, pest inspection and final walk-through
• other investigations to make during the inspection period
• taking title
• closing the deal
• where to go for additional information

This guide contains some very helpful information, especially for first time Arizona home buyers and sellers.  I would also suggest that all Arizona buyers (and sellers, too!) go to the AZ Assoc. of Realtorsâ website to read "The Arizona Dept. of Real Estate Buyer Advisory".  This document helps guide the buyer through the paperwork aspect of a real estate transaction, as well as providing a more in depth look at the entire inspection process.  It includes a list of many possible inspections and investigations that a buyer should make during the inspection period, both with regard to the property and the surrounding area.  In addition to environmental inspections, it advises buyers to check out everything about a property, including but not limited to schools, homeowner associations & CC&R's, expansive soil, airports, property insurance claims history, sex offenders, etc.  In fact, the information in this advisory is so important that it is referred to in the new 2005 Residential Resale Real Estate Purchase Contract (the most commonly used Arizona real estate contract...I will be blogging about the changes to this new contract in the coming weeks, so be sure to check back!).

The Arizona Department of Real Estate's website also has other consumer information that all buyers and sellers should read.  Buying or selling a home is a very important transaction.  While it is essential to hire a knowledgeable real estate agent to represent your interests, it is equally important for the buyer and seller to be informed and educated about the process.  Remember...knowledge is power!

Written By: Shannon Hubbard Realtor-Investor Great American Realty, Inc. Cell: (480) 695-6672 Email me

Posted by Shannon Hubbard, AZ Realtor & Computer Guru on May 8, 2005 | Permalink | Comments (0) | TrackBack

Wednesday, January 12, 2005

Add Your Company Name & Logo to a Product in BlogArizona.com's Online Store!

Attention real estate agents & mortgage lenders!!
You may now customize most of the products in BlogArizona.com's Online store.  Add your company name, logo and contact info to a variety of real estate gift items.  Your clients and co-workers will love a unique, customized gift from BlogArizona.com!  (sample #1, sample #2).

No minimum order.  $35 one-time set-up charge per product.  Once it's set up, others in your office may also order as many or as few as they would like.

Email us with the following information:

1.  Name of Product you wish to customize
2.  Quantity you expect to purchase
3.  Attach the artwork you want to add (.jpg, .png or .gif only), and provide a short explanation of how you want it to look.

We will respond within 48 hours.  Thank you!

the BlogMaster

Posted by BlogAdmin on January 12, 2005 | Permalink | Comments (3) | TrackBack

Tuesday, January 11, 2005

Welcome to the blogosphere!

Welcome to BlogArizona.com...an Arizona Real Estate Blog!!  Feel free to look around...you won't believe how much you'll find to do here!

• Read up-to-date articles written by Arizona real estate professionals
• Make a comment
• Search Arizona MLS
• Use our mortgage calculators
• Take our poll
• Check todays mortgage rates
• Join our Frequent Blogger Club
• Find out how much your home is worth
• Interview a real estate professional
• Ask an Expert
• Suggest an article
• Read the daily cartoon
• Set-up an automatic reminder for your new home 1-year warranty inspection
• Tell-a-friend about BlogArizona.com
• Read 'Today in History'
• Add a free FSBO listing
• Buy fun & unique real estate gifts in our online store
• Search our archives
• Buy or sell moving boxes

But best of all...you can find out what a blog is!

Check back with us regularly for the latest Arizona real estate news and trends.  And don't miss our Official Launch date on July 31, 2005!

Thank you for visiting!

the BlogMaster

Posted by BlogArizona BlogMaster on January 11, 2005 | Permalink | Comments (2) | TrackBack