What is a buyer representative/agent?
Buyer agents solely represent the interests of a buyer in a real estate transaction. They must act in the best interests and follow the lawful instructions of the buyer and WILL NOT disclose any buyer information, facts or discussions to the seller. A buyer agent must advise the buyer of a reasonable purchase price, investigate the material facts related to the sale and affirmatively discover material facts and disclose them to the buyer.
Why is it important for a Canadian to hire UrbBurb?
UrbBurb, co-owned by a Canadian, has been successfully representing home buyers in the Valley since 1993. Canadians should work with a buyer agent that is experienced with both Valley real estate and the special considerations when dealing with a foreign buyer. We have numerous contacts skilled in all aspects of cross-border financial planning, visas, travel, banking, lending, currency exchange, accounting and legal work. We have digital contracts and signatures to remotely tender offers and move your escrow forward. We’re the best local choice for savvy Canadians looking for a skilled professional agent to represent their interests.
What is your procedure for assisting buyers?
Take a look at our Canadian Buyer Guide and you’ll have a better idea of the process of buying a home in Arizona. Then understand that we are here to expertly advise and guide you every step of the way from the start of your search to the day you close. Buying a home is one of the biggest decisions of your life – make life easier and talk to us first.
If I’m buying directly from a builder do I need a buyer’s agent?
The homebuilder is there to make as much money as possible. Without representation you’ll likely pay more, have less protection and largely be on your own throughout the entire transaction. Using a buyer agent doesn’t cost you a dime (the builders have agent fees built into their projected costs) while giving you the upper hand in buying your home. We help negotiate the price and contract terms, provide direction at the design center, meet with vendors and coordinate your professional services all while attending the inspection and builder walk-thru to provide guidance and answer questions.
If you’re doing all this work for me how do you get paid?
Our buyer services don’t cost you a dime. The seller’s agent is contractually bound to pay us from their commission proceeds. If you don’t use a buyer agent the seller’s agent usually just makes twice as much (dual agency) or the seller just nets more. Our fiduciary duty is to you, our buyer client, and we work solely on your behalf while costing you no out-of-pocket expenses.
How much do I spend?
The deals are fantastic here in Arizona but you still need to decide on what type of home you want, in what location and with what amenities. A general rule of thumb is to spend from 2-3 times the family annual income. This of course changes if you are semi or fully-retired and then your decision will likely be based on your net worth, current income and annual expenses. We’ll discuss what you feel comfortable spending and then review a selection of current listings that fit your criteria. Or you can search online yourself and get a better feel for the Valley’s housing market. Either way you’ll soon know how current Valley listings fit your budget.
How do we decide where to live and what to buy?
With our guidance you’ll be well educated about the Valley and its many residential options. Once you fill out our profile form we’ll know exactly your budget, what your housing needs are and what factors will determine your location and the lifestyle you want to lead. We will target only current listings and locations our experience determines will be what you’re looking for.
How can you help me with financing?
Yes. For more information please check out our Canadian Financing FAQs.
How do you find the best value in the home I’m looking for?
Hard work and experience. Finding the best home for your specific needs and budget means reviewing online and in person every single relevant property listed in areas we feel fit your lifestyle. That’s not easy task in a housing market as large as the Valley. It’s a full-time job keeping on top of the market, reviewing every new listing, checking existing listings and trimming it all down so that we show you only the best properties available. That’s why online property searches will never replace a qualified buyer agent. We save you time, money, effort and a great deal of unnecessary stress.
How do I prepare for the searching properties onsite?
We provide all the information you need when visiting properties and areas in the Valley. We do suggest you take your own pictures for reference and we will supply a clipboard and our “property review” sheets to grade and take notes on each selection visited.
How long does it take to find a home?
It depends on the immediacy of your purchase. There’s a lot of great inventory out there and sellers and banks (REO/Short Sale properties) are motivated to get a home under contract. We make the process much easier by focusing on properties that fit your particular needs and typically within 1-2 days of on-site searches you’re under contract or getting close to submitting an offer. With us you’ll quickly have a clear idea of the size, location, price and amenities of what is available in the market for your needs.
Can I buy a furnished residence?
From condos to large detached homes, we can help you select a furnished home, a furnished model or even negotiate with sellers to make your new home move-in ready. We can also set you up with experienced and talented interior designers and vendors to coordinate furnishing your space with everything from dishes to furniture in almost any style.
I’ve heard about active-adult and retirement communities. Can you help?
Yes. There are a wide range of older and new communities for the empty-nester or retiree. From Mesa in the east Valley to Sun Lakes to the south, Anthem to the north and Sun City West in the west Valley the Phoenix metropolitan area is a top destination for the middle-age and older buyers with a wide selection of community amenities, home prices, architectures and sizes. Alternatively we can suggest many in-fill locations within Phoenix, Scottsdale, Tempe and Mesa which offer many of the features and lifestyle you may desire but in a location closer to the city and retail centers.
List Price, Sales Price, Appraised Value and Market Value?
The list price is the seller’s asking price and the sales price is the final closing price. The appraised value is determined by a licensed appraiser using comparable sales, the condition of the property and other factors. The market (true) value is the value that the home will sell for once both parties agree to a price depending on how the appraisal, inspection and other items have been considered.
How do you negotiate contracts?
With experience. Experience teaches us to know the value of the property we’re looking at based on our market knowledge, stats and recent comparable sales. Experience guides us to know how to construct the contract, what items to push for and what concessions we should be prepared to make. We know that quick, prepared and concise responses from us will usually give you the upper hand in securing a contract.
What do we ask for in the contract?
Each buyer and seller has their own motivations when negotiating but one thing is clear: draft as simple a contract as possible. Complex contracts with multiple demands can be confusing or annoying to sellers and their agents and are unlikely to get serious attention in a high-demand property. Even on a low-demand property it is best to target your specific motivation (lowest price, furnishings, seller funds to offset repairs at close etc) for concessions. Determine what you really want, keep the contract clean and drive the hardest on the deal points that mean the most to you.
Can I ask for furnishings?
We can ask. Many sellers are more than willing to entertain getting a reasonable price for something they may not have to move. Tell us what you want and we’ll give it a shot.
Inspection & Escrow
What is a title company?
The role of a title company is to coordinate the interests of all parties to a real estate transaction including the buyer, seller, mortgage lender and the real estate agents while making sure all requirements for settlement are fully satisfied. After the Sales Contract is ratified, it is sent to the title company to review for accuracy and completeness and to begin the title and escrow process.
What ways can I hold title in Arizona?
You must carefully decide how you will take title due to the significant tax and legal differences. Read this Title Guide to better understand your options. You should also talk to your lawyer or accountant for guidance.
Escrow describes the process where a title company works with the seller and the buyer to facilitate the transaction. After the contract documents, instructions and buyer funds have been provided to the title company escrow will be opened. Once the title company verifies that title is clear and that all obligations have been met by all parties then ownership of the property is transferred to the buyer through recordation of the deed at the County Recorder.
Will you help me with the escrow?
Every single step of the way. We pride ourselves on providing the very best service to our clients from search to close. The escrow is the “glue” that brings the entire transaction together and we’ll coordinate all the events needed to insure a successful transaction. We monitor your financing, inspections, appraisals, and obligations while working directly with you to set up utilities, improvements, property management or any other service or task.
What is the inspection period?
Contracts are typically drafted with a negotiated inspection period whereby the buyer can have the house inspected, cost out repairs, review their financing commitment and if needed, drop the contract unilaterally without penalty. The inspection period usually last for 5-10 days but all inspection period terms are up to negotiation.
What happens during the inspection?
Immediately upon contract acceptance we will coordinate for a timely inspection from a licensed home inspector. The inspector will thoroughly inspect the property, draft a detailed report and review any obvious or suspected problems or needed repairs. For significant suspected problems such as foundations, roof, structural and electrical and plumbing systems further review by a specialist may be needed and the inspection period can be mutually modified if warranted. Additionally a termite inspection will occur looking for wood-destroying insects and evidence of rot.
What happens if there are significant issues with the home during the inspection?
Likely we would be aware of any significant visually-obvious issues with the home and factored the effects on value (and cost of repairs) into the offer. But occasionally issues are discovered during the inspection that are potential “deal-killers”. We then have the option to go back to the seller and try to renegotiate the price and contract terms. In today’s “buyer’s market” sellers are likely to accept any reasonable modification to the contract if they now have a known issue (the seller is now obligated to disclose known facts on any future contract) and a motivated buyer ready to close.
What is the repair period?
If there are items on the final inspection report that are of concern to the buyer then the buyer can go back to the seller to draft contract changes in the form of price concessions and repairs to the home. In most cases these repairs will be to be completed by the seller before close of escrow. If the repairs will take longer to complete, funds can be escrowed (held back) to insure that the seller completes their contract obligations.
Getting Ready to Close
I’m getting ready to move. Can you help me coordinate everything?
From general moving information to moving companies and from trailers to trucks we’ll help guide your move, set you up with places to stay along the way and help get you here to a home that’s ready for you.
What’s move-in ready?
Utilities need to be set up and professional services hired for additional work need to be coordinated during the escrow. These professional services including handling other “non-contractual” repairs, rehab, landscaping or interior design work, should be organized and ready to go once close of escrow has occurred. Whatever it takes we’ll help insure your home is exactly as you expect when you move in with the final touches to be started or completed soon after.
What happens after close of escrow?
Once the property has close our closing team will coordinate to make sure you get your keys and help confirm your utilities have been activated or switched. We will insure the final settlement package is sent to you from the title company and we will prepare and deliver your UrbBurb Closed! package insuring you have your questions answered and your final documents in hand.
What happens to my home when I’m away?
From property managers and caretakers to maintenance services we have the contacts needed to service your home when living in the Valley and when you’re away. Whatever it is – we’ve got you covered when you’re away.
For more check out Going Away? FAQs.
Can I rent out the home when I’m not using it?
Detached homes, townhomes, patio homes and condos can be rented out for you on a weekly, monthly or longer rental with the high season running from October though May. If your property is located within a HOA (Home Owner Association) community you will need to review your local CC&R’s (Covenants, Conditions and Restrictions) to insure compliance with what renting restrictions may be in force. We then work with you to coordinate with one of our property management contacts specializing in the preparation, management and accounting of these rentals.
What happens when I’m ready to sell?
Not only will we coordinate an aggressive strategy to sell your home quickly and at the highest price but as Canadian specialists we will work with you to make sure you are in full compliance with Canadian and U.S. regulations. We’ll set you up with the contacts you need including skilled cross-border financial planners and accountants to insure you maximize your gain while minimizing and tax, legal and headache exposure.
Tell me more about investing in residential real estate.
Much of the residential real estate in Phoenix can be considered an excellent long-term investment. Phoenix is seen as one of the most dynamic long-term metropolitan growth markets in the nation and currently offers fantastic pricing on a wide range of well-located residential homes. Prices are down significantly from their market high in 2007 yet homes, in a growing range of price levels, are seeing price stabilization. Canadian investors now have a once-in-a-lifetime opportunity to take advantage of a strong Canadian dollar and a strong Canadian economy to purchase cheap U.S. real estate in the resort settings of Arizona. If ever there was the perfect time to move your money into a solid income and equity investment – this is it.
REOs, Short Sales & Foreclosures. Tell me more.
The term foreclosure is sometimes used as a catch-all for all the terms which surround a “distressed property”. The bottom-line is that distressed properties typically follow the arc from the owner first trying to sell, then attempting a short-sale, to the actual foreclosure of a property (legal repossession and sale) if the loan is not modified or the property is not sold earlier. When a property is foreclosed upon and owned directly by the bank it is then “bank-owned” or REO. Banks, not wanting to own and manage real estate, then try to dispose of this inventory. The homes are usually in reasonable shape with many fixed up after the foreclosure to prepare it for the market. But the homes are usually sold “as-is” with no warranties, repairs or seller obligations. Understanding market conditions, the inventory of foreclosed homes and how to negotiate in a heated up buyer market is where the experience of UrbBurb can make all the difference.
If I buy residential real estate as an investment who will manage it?
We’ll set you up with a property management company that will take care of everything. As we coordinate your close of escrow our closing specialists will help set up the utilities, generate quotes for any improvements or repairs to take place after your close and liaison with the property manager to set up management services. Once escrow closes our team will insure that repairs are started and that your new property management company receives the keys and immediately takes over your investment.
Taxes & Financial Planning
Arizona & Taxes – what do I need to know?
Arizona is very tax-friendly including to Canadian buyers. Many other states have real estate transfer taxes that are assessed to foreign buyers – Arizona does not. Many other states have significantly higher property taxes including other popular Canadian destinations including California, Texas and Florida. For Canadians, Arizona is not only a great destination but your tax paperwork is reduced and more money stays in your pocket.
How do I know when I need to pay U.S. Income Tax?
We’ve got the formula right here – When do Canadians owe U.S. taxes?. Contact us for more information.
Are Canadian buyers subject to capital gains tax?
The Foreign Investment in Real Property Tax Act (FIRPTA) imposes a U.S. tax on income and gains from real estate owned by “non-resident aliens” at the same graduated rates applicable to U.S. citizens. Contact us for more information and referrals to tax professionals to assist you further.
What are withholding taxes and do I have to pay them?
On your rental property you will be subject to withholding tax on the gross amount of rent paid to a Canadian resident on U.S.-based real estate. If you occur significant expenses while operating the property you can file a U.S. tax return and take advantage of the net rental income election. The amount you would likely owe at the normal 30% of gross withholding tax will likely be reduced. When you sell your property located in the U.S. a withholding tax of 10% of the gross sales price in normally payable under FIRPTA (the Foreign Investment in Real Property Act of 1980). Exceptions for withholding taxes include the sale of a home for less than $300,000 or if the Canadian obtains a withholding certificate from the IRS indicated what amount of tax should be withheld rather than the 10%. Contact us for more information and referrals to tax professionals to assist you further.
What is an ITIN?
An ITIN (Individual Taxpayer Identification Number) is what you’ll need as a Canadian to file U.S. taxes for the rental or sale of U.S. real estate.
Will I be subject to double taxation on the income or gain on my property?
By working with a tax professional to plan your taxes you should never be subject to double taxation. The Canada-U.S. tax treaty has many provisions installed to protect citizens from both countries from being taxed twice.
Are there deductions available for my real estate rental income and/or capital gains?
There are multiple expenditures which can be applied to reduce your tax liability. Typical expenses such a mortgage interest, management expense, property taxes, insurance and travel expenses can be used to reduce your tax exposure.
What are local property taxes?
Property taxes are low and range city-by-city throughout the Valley. Taxes pay for city operating expenses including roads, schools, police, fire, libraries etc. Taxes are assessed every 24 months in Maricopa County (including Phoenix and the surrounding cities) and range from .8 – 1.5% of the assessed value of the property.
Can I appeal my property tax assessment?
Yes. Especially as values fluctuate in this market you may feel that the assessed value is incorrect. There is a time limit to contest your assessment and you will have to provide proof to challenge the value. You can accomplish this through an appraisal or a comparative market analysis. Contact us or your local tax assessor for the procedure to appeal your property taxes.
How do I get the best exchange rate?
When purchasing such a large asset it is imperative you get the best exchange rate for the money you bring to the closing and for your ongoing living expenses while down in Arizona. Too often Canadians let their banks fully handle the transaction at rates costing hundreds or thousands of dollars to the client. An alternative is a foreign exchange company which will tailor the exchange transaction to the best exchange rate for that day or at a price you have determined. With complete control of your exchange transaction you can be assured of getting the best market rate combined with professional and attentive service.
Living in the U.S.
How long can I stay in the U.S. annually?
Your visa status will determine how long you can stay but for snowbirds and visitors you’ll want to limit your stay to prevent loss of provincial health care coverage. Contact us for more information.
What should we do if we’d like to retire and move permanently to the U.S.?
Moving to the U.S. should not be taken lightly. You’ll save money and stress and protect your assets by consulting with a cross-border financial planner. We can provide information to guide the way but the smartest move you can make before purchasing any real estate is to set up a long-term retirement plan with an individual or company skilled in the myriad of legal, tax and financial considerations.
Why Arizona? What about California, Texas and Florida?
Although California, Texas and Florida have traditionally been snowbird and retirement hot spots, each is now facing difficult long-term issues which make Arizona much more attractive. Always one of the top four destinations for Canadians, Arizona is now gaining rapidly in popularity with its more stable economy, lower taxes, higher standard of living and great weather. We don’t have to dash from tornadoes, ride out earthquakes, take cover from hurricanes and build arks to survive flooding. Arizona is better positioned than its neighboring states, including Texas, California, Florida, Nevada, New Mexico, Utah and Colorado, to deal with long-term water issues due to its high groundwater reserve and the CAP Canal (with Arizona’s large allocations from the Colorado River). When the housing market crashed in 2007 California and Florida were devastated by the downfall and the stabilization of their housing markets looks many rough years away. Arizona, while seeing a downturn, now is seeing stabilization in its housing market and even price increases. To buy a home at these prices in the Valley, arguably one of the best large-market retirement & second home markets in the U.S., is truly a once-in-a-lifetime opportunity.