When you buy a home in Sedona or the Verde Valley, you’ll want to do your “due diligence”. This means you’ll want to inspect all relevant aspects of the home and real estate. You are responsible for inspecting anything that you may deem relevant to the sale.
Here’s a checklist to get you started on your due diligence.
- The Price is Right?: Get a professional appraisal. We recommend an appraisal clause stating what happens if the home doesn’t appraise for full market value. If it doesn’t appraise, several choices are available via the clause. The sales contract can be voided or the seller can lower the price or you can make up the difference. We can pull comparable sales for you. Active property for sale is not always the best way to judge the price. We prefer to use homes that have actually sold. Below is a short list of what we look for in a comparable home but it’s pretty rare to get 3 sold comps that meet all of the criteria. Our experience will let us select the best comps. Ideally, the comparable homes will be:
- Within 1 mile of the subject home.
- Sold within the last 6 months.
- The size of the comps will be within 100 square feet of the subject home.
- The age will be within 10 years of the age of the subject home.
- Property Condition: Get a home inspection. Chose an experienced home inspector who does it for a living and not as a side job. A qualified home inspector will find the current condition of the home and make recommendations on what repairs are priorities. We recommend that you attend the home inspection. This will give you a clearer view of the condition of the home than you’ll get by reading a report. The home inspector can show you how to operate the systems of the home and what you’ll need to do to maintain them.
- Other Inspections: A home inspection can reveal systems that may require an inspection by a trade professional such as roofing, HVAC and electrical. This can confirm a problem or set your mind at ease.
- Permits: Was that addition built with a permit? Call the city of Sedona, Cottonwood, Camp Verde or the applicable County (Yavapai or Coconino).
- Get a Clue: A CLUE Report is an insurance report that will tell you any claims made against the property. If the home has an extensive history of insurance claims, it may be difficult to secure insurance on the property.
- HOA Documents: Review any Home Owners Association documents. Usually the first page or so will be a summary of any violations that are currently on the property.
- Well Water: If the property is on a well, you’ll want to know all you can about it. You can go to the ADWR website and look up the records on the well. You may want to go to SEC and hire them to do the well paperwork for you to ensure it is transferred over to you in compliance with ADWR regs.
- Septic Systems: If the property is serviced by a septic system. You’ll need to get it checked out. A septic inspection runs around $400-600 and is fairly extensive. This is typically paid for by the seller. You’ll want to ensure the seller has also had the tank pumped out.
- Pest and Termites: A pest company can come in and inspect the property for any
- Land Survey: Rarely will the property be clearly marked. It’s in your best interest to get a survey of the property. If you are going to put up a fence, you’ll almost have to get one down the road so why not do it now?
- Title Documents: The title company will research the title of the property and you can buy title insurance to protect your investment. Ask for the current preliminary title report and any restrictive covenants, easements and common area agreements (CC&R’s). Is the well or driveway under a shared use agreement?
- Zoning: Is the property zoned for the use you intend? Check with the county or city. Normally can be found on the website.
- Flood Plain: Is the home in a flood plain? If so, is flood insurance available? If you are getting a mortgage, a flood certification will be ordered. The county website will have an overlay of flood zones. We have come across a city mandated flood zone before that was not in the federal map.
- Talk to the Neighbors: You will need to meet them eventually, now is the best time. They can tell you about the neighborhood and maybe a bit about the property.
This list just covers the basics of due diligence when buying a home in the Sedona area. As you proceed through the list you may have to add to it if you discover issues or need clarification. If you’re building a home or buying land, you’ll need a different list of criteria.
See also the Arizona Buyer Advisory from the Arizona Association of Realtors. The Arizona Buyer Advisory will guide you through much of the Due Diligence and give you some very useful information on buying a home. You can read it now via the aforementioned link, you will also get a copy when you make an offer on a property.
Call us if you have any questions at all or would like more information on buying a home or real estate in the Sedona area including the entire Verde Valley.