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Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
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Tucson Real Estate � Home Buying 106

Due Diligence and Inspections

Due diligence is addressing issues like insurance, surveys, legal access, easements, prior use of the property, zoning restrictions, CC&R’s (Covenants, Conditions, & Restrictions), etc.

Inspections are primarily concerned with physical condition, operating condition, infestation, safety, etc.

Seller Property Disclosure Statement (SPDS)

In Arizona, ask for an SPDS. This is where the seller is required to inform you of any physical problems, repairs or concerns with the property; what services you can expect to receive; etc. Failure to disclose is the number one cause of litigation. Comparing the SPDS with the inspections is advisable.

Comprehensive Loss Underwriting Exchange (CLUE)

Ask for a CLUE report. In Arizona the seller must provide a history of the past 5 years for any claim insurance. This is the area most overlooked. Compare to make sure that any claims match what is reported in the SPDS.

Flood Insurance

Make sure you do not need flood insurance. Some areas are in the FEMA flood zone and other flood zones requiring high insurance premiums. The inspection period is the best time to find this out. Contact two or three insurance companies to get quotes.

Inspections

I recommend leaving the inspector alone during an inspection. Talking to and distracting the inspector opens opportunity for missing something. When the time is right ask the inspector to check a point of concern noted on the SPDS. If there is suspicion of mold you may need a mold inspection. If the roof is old and may need repairs or replacement, you may need an additional roof inspection. Electrical, structural and plumbing are other areas that from time to time need additional inspections. It all depends on the age and condition of the home.

Don’t forget to get a termite inspection. In Tucson we have a saying about termites, “Either you have them or you’re going to get them.” Knowing what to watch for and checking periodically will ensure protection of your home. Termites are natures recyclers of old wood. They just don’t know the wood in your home wasn’t meant for recycling.

Surveys

If buying in a subdivision there aren’t too many problems. Knowing where the lot lines are isn’t hard to discover. When buying in rural areas knowing exactly where property lines are can save serious problems. Asking for a survey to confirm boundaries and lot lines is worth the investment.

Access and Easements

When buying a home in an unsubdivided area make sure that you have both legal and physical access to your property. If there are dirt roads, is there a road maintenance agreement? What part of your land do you have to allow easement for neighbors so they can access their property? What part of your neighbor’s land can you use as an easement to access your property?

Water and Wells

If the home you are buying is supplied water by the city or some other municipal supplier there should be no or minimal problems. If there is a well, co-op, or shared well investigate further. How deep is it? How many homes can be supplied? How many homes are on the well? Who is responsible for repairs? Who is responsible for monitoring quality? If there is contamination or a problem, what solutions are there?

Your REALTOR® will help you with finding inspectors, mold inspectors, roofers, or surveyors. Which inspector you use as the buyer is your responsibility and decision. In Arizona Home Inspectors must be certified. Doing your homework in the beginning will save headaches later.

Time Frame for Inspections

In Tucson and all of Arizona the default time frame for inspections is ten (10) calendar days from the date of an accepted contract. Example: If an offer is accepted on December 23rd, Christmas and New Years are included in the 10 days. Within those 10 days the Buyer must complete all inspections and either 1) provide the Seller in writing with items that are not acceptable, 2) reject the property and cancel the contract, or 3) accept the property without corrections.

The Seller then has five (5) days to respond by default. The Seller can respond by 1) correcting all deficiencies, 2) choose to repair those items the Seller feels reasonable, or 3) refuse to repair or correct anything.

If the Seller chooses to refuse to correct deficiencies or corrects a portion the Buyer has two decisions to make. Either accept the Seller’s response or reject the response and cancel the contract.

Home Buying 107 will cover closing and escrow.

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This entry was posted on Sunday, June 24th, 2007 at 8:50 pm and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

[…] Tucson Real Estate ? Home Buying 106 In Arizona the seller must provide a history of the past 5 years for any claim insurance. This is the area most overlooked. Compare to make sure that any claims match what is reported in the SPDS. Flood Insurance … […]

June 24th, 2007 // Car-Boy Auto Insurance News » Blog Archive » Compare Insurance June 25, 2007 1:41 am
You have mentioned some really valid points there of which many people do not take into mind when being shown around a property and things to look out for which we will now use ourselves with our company.

Thanks for the tip.

June 25th, 2007 // Richie
[…] Home Buying 106 – Inspections & Due Diligence […]

July 1st, 2007 // Tucson Real Estate – Home Buying 105

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