Your Guide to Arizona Real Estate
Making the decision to sell your Arizona real estate can be easy if you understand the sales process of listing and selling your property. Diane Olson is one of the few in the marketplace who truly understands real estate issues in both Canada and the US. Being able to access this kind of expertise is critical when purchasing or selling property in another country. She also offers a wide and trusted network of suppliers and professional services on both sides of the border.
If you sell and make money, you are subject to capital gains. If you sell to an investor you are subject to a non-resident withholdings tax known as “FIRPTA”. Diane and her team have the expertise and will walk you through the entire selling processes so you have no surprises!
To get started, here’s a roadmap to help you think through the major aspects of the journey you’re about to undertake.
What costs are involved with the sale of your Arizona property?
- Real estate commissions
- HOA transfer fees and disclosure fees
- Title service fees
- Unpaid property taxes
- Any negotiated repairs between buyer/seller
- Any negotiated seller concessions towards the buyer’s closing costs.
What is the “Foreign Investment in Real Property Tax Act” known as “FIRPTA” and what it means to Canadians when selling their Arizona property?
- When a foreign owner gets ready to sell they could be subjected to a 10% or 15% withholdings (of the sales price) unless the transaction is exempt from FIRPTA.
- Most common exemption is not more than $300,000. The buyer or member of their family must have plans to reside at the property for at least 50% of the number of days the property is used by any person during each of the first two twelve month periods after the sale.
- Other exemptions that may apply are:
- Seller to provide a certificate showing they are not a foreign seller
- Seller receives a withholding certificate from the IRS excusing withholdings or reducing withholdings.
What happens when you have an accepted offer on your Arizona property?
- Closing on a property is much different in Arizona than in Canada and is completed by the use of a Title Company and not a lawyer/law office.
- Once the parties to the transaction (buyer/seller/ender and/or borrower) have reached an agreement, the signed contract or purchase agreement, along with the buyer’s earnest money deposit, is submitted to the escrow holder which is consider escrow to be opened.
- The escrow holder will now follow the future written instructions of the buyer and seller, maintaining a neutral stance to facilitate the successful exchange of money and property between the parties.
- During the escrow period, the title department begins researching and examining all historical records.
- The transaction may include the following:
- Opening escrow and deliver earnest money deposit to held in a separate escrow account.
- Conduct a title search to determine ownership and status of the subject property
- Issue a title commitment and begin the process to delete or record items to provide clear title to the property. If applicable, request payoff information from the seller’s loan, other liens and HOA fees.
- Prorate fees, if applicable
- Prepare a settlement statement, used to itemize services and fees for buyer and seller, and set up appointments require for closing.
- When all funds are deposited, record documents at the county recorder to transfer the subject property to you.
- After recordation is confirmed, close escrow and disburse funds, including seller’s proceeds, loan payoffs, real estate agent’s commission and related fees for recording.
Phoenix is currently a seller’s market with more buyer demand than homes available which may result in multiple offers for a property. If you are ready to list, don’t wait. Take advantage of a seller’s market!
Contact Diane to discuss the listing and sale of your Arizona home. We are proud to offer our clients a full and trusted network of contacts – both in Arizona and Canada – so you can rest easy knowing you’ll be in good hands, no matter what you need help with. We will make your experience of selling an Arizona property stress free and easy!