Buying a Home South of the Border

Today we have a guest author – a Realtor from Phoenix, Arizona. He’s been helping a lot of Albertans buy property in Phoenix lately, and has found a lot of us have the same questions. He contacted us and asked if he could answer some of these frequently asked questions here on the blog and we thought it was a great idea. I don’t the first thing about buying real estate in Phoenix so do your homework before you get involved. Here is what he sent:

Greetings from Phoenix! My name’s Jonathan Dalton and I’m an agent with RE/MAX Desert Showcase and author of Dalton’s Arizona Homes Blog. As I write this the temperature is hovering around 1. (35 for us – sounds better that way, actually.) Of course, it’s also midnight. But I digress.

Over the last several months, ever since the Canadian dollar reached parity with the American dollar, I have been answering questions and meeting with Canadian buyers – nearly all Albertans – looking to purchase a vacation home in the Phoenix area.

I’ve heard much about the seminars that have been held there over the past few months; I’ve never been one for a one-size-fits all approach because purchasing real estate in Phoenix (or anywhere) isn’t for everyone. There are risks that need to be taken into consideration, filtered against one’s personal circumstances. Plus, I don’t think you ought to have to pay to find out the basics. There are a handful of questions I ask that will help both me and the prospective buyer focus on what’s important:

1. Oilers or Flames? If you’re reading here I probably know the answer but it always helps to know whether I should discuss Mike Vernon and Theo Fleury or Gretzky, Messier, Kurri and Fuhr. (I’m a Kings fan so I have equally painful memories of both groups.)
2. What do you like to do? The Phoenix metropolitan area is huge – some 65 miles separate Surprise in the northwest, and Queen Creek in the far southeast. In fact, Queen Creek isn’t in the same county as Phoenix. Queen Creek is in Pinal County, as is Florence (featured in the local paper as a destination for Canadians) and Pinal carries a higher tax rate than Maricopa. You can golf and shop anywhere but there are particular things – sporting events, theater, etc. – for which living on one side of the Valley or the other may work better.
3. Retirement community or no? Some active adult communities have age limits as low as 40 years old. If you’re thinking about a seasonal rental (even though the hot months in the seasonal market are the same months you’d probably want to be down here and not in the snow), these communities often are the best bet as they offer significant community amenities to their residents. And because of the number of winter visitors, year-round neighbors are vigilant about watching their friends’ properties during the summer.
4. What’s your time frame? Waiting to see if the Phoenix market softens further could be beneficial but only if your dollar retains its current strength against the U.S. dollar. A drop in strength of the loonie can be more costly than a drop in Phoenix property values.

Speaking of seasonal rentals, one of the questions I often receive is where tenants can be found. In truth, your best bet for seasonal tenants are the people you know – the ones who aren’t interested in buying but wouldn’t mind visiting for a couple of weeks or a month. With monthly seasonal rental rates currently approaching $2,000 (not guaranteed, mind you … just an average), your friends and family can provide an income stream along with the security of knowing the home will be well cared for.

One final note and then I’ll return you to your Edmonton real estate news. If you’re serious about buying, skip the short sales – properties where the owner owes the bank more than the home is worth. These usually are a waste of time and they aren’t really a bargain – your simply buying someone else’s overpriced problem at market value, but often waiting weeks or months to hear from the bank whether they’ll accept your offer. The list prices you see aren’t real and there are abundant opportunity risks at play.

If you’ve got particular questions about purchasing property in the Phoenix area, feel free to visit my blog or send me an e-mail. Thanks for reading!