This Page's Content Was Last Updated: February 22, 2024
The allure of a desert landscape, a vibrant cultural scene, and a thriving job market are just a few of the reasons why many Canadians are increasingly turning their sights to the sunny state of Arizona. However, navigating the intricate process of buying a house in a different country can be intimidating. This comprehensive guide is tailor-made for Canadians who are looking to buy a house in Arizona, showing you a step-by-step guide on everything from market research and financing to closing the deal.
- Use your Canadian credit history
- No pre-payment penalty
- Save up to $4,500 USD on closing costs on U.S. mortgages42
- Cross-border mortgage lenders allow you to use your Canadian credit history and income to finance the purchase of a house in Arizona.
- Canadians buying a house in Arizona with a mortgage will need to make a down payment of at least 20%.
- Work with cross-border experts, such as a local real estate agent trained to work with Canadian clients, to facilitate a smoother transaction.
- It’s possible to buy a house without stepping foot in Arizona with services such as virtual open houses and remote online notaries.
Before you begin house hunting, you should do research about the Arizona real estate market and consider how to budget and finance your new property.
Understanding the Arizona Real Estate Market
Arizona boasts a diverse real estate market, ranging from bustling city condos in Phoenix to secluded luxury homes in Sedona. When looking for the best place to buy a house in Arizona, find a city that aligns with your lifestyle and goals. Consider factors like cost of living, job opportunities, climate, and proximity to amenities. Places like Scottsdale offer a blend of urban living with access to nature, while Tucson appeals to those seeking a vibrant cultural scene and college-town atmosphere. Home prices and property taxes can vary widely across the state.
Arizona Housing Market
As of the end of 2023, the median home price in Arizona was $468,000. In Phoenix, the median home price was $444,990, while it was $1,040,000 in Scottsdale and $375,000 in Tucson.
Median Home Prices in Arizona (December 2023)
Arizona Housing Market Data Source: ARMLS (Arizona Regional Multiple Listing Service)
Research Budgeting and Financing Options for Canadian Buyers
Many Canadian buyers opt for a cross-border mortgage with a Canadian bank or will use a HELOC (Home Equity Line of Credit), which leverages their equity in a property in Canada to purchase a U.S. home. Currency exchange rates between CAD and USD, taxes and fees, and your income and credit score in Canada all influence your budget for an Arizona home. Understanding these will give you a realistic idea of how much home you can afford.
If you’re thinking of getting a mortgage to finance your Arizona home purchase, you should start saving up for a down payment. Getting a cross-border mortgage for a home that will be your residence requires a minimum down payment of 20% of the home’s purchase price. If it will be an investment property, you will need to make a down payment of at least 25%.
Getting pre-approved for a mortgage will give you a clear idea of how much you can borrow and what interest rates are available to you. It also shows sellers that you are a serious buyer, putting you in a better position for negotiation. Some real estate agents may even require you to have a mortgage pre-approval letter before they show you home listings!
Getting a U.S. Mortgage as a Canadian
Canadians that don’t have a U.S. credit history can benefit from a cross-border mortgage lender as they can use your Canadian credit history and income to qualify for a U.S. mortgage when buying property in the U.S. For example, RBC Bank lets you apply online in minutes, with pre-approvals good for 120 days.
Get pre-approved for a U.S. mortgage8 with RBC using your Canadian credit history and income, and start shopping for your Arizona home with your Pre-Approval Certificate that is good for 120 days. Plus, there are no bank or lender fees with RBC, saving the average borrower up to $4,500 USD in closing costs!42
- Use your Canadian credit history
- No pre-payment penalty
- Save up to $4,500 USD on closing costs on U.S. mortgages42
Navigating the Arizona housing market can be challenging for out-of-country buyers, making it essential to have a knowledgeable and trustworthy local real estate agent by your side. An experienced Arizona real estate agent, familiar with Canadian buyers, can be a goldmine of information and can help you understand market trends, negotiate on your behalf, and handle the purchase process.
They are also familiar with the local market and can provide valuable insights into property values, neighborhoods, and schools. Additionally, they can assist you in finding properties that meet your specific criteria and negotiate a fair price.
Tips for Selecting the Right Agent
Referrals, reviews, and accreditations are pivotal in selecting your agent. Look for someone who specializes in cross-border transactions and can help you comprehend financing, taxes, and property laws peculiar to Arizona.
As part of the RBC U.S. HomePlusTM Advantage program, you can get connected with a local real estate agent in Arizona that has been through Canadian-certification training. That means they have experience working with cross-border buyers like yourself and are well-versed in the unique challenges that come with buying a home in Arizona as a Canadian.
They’re also top-performers in the Arizona housing market, being required to maintain at least a 90% customer satisfaction rating and complete at least 10 or more transactions per year. Plus, when you buy or sell a home with an Arizona real estate agent through RBC U.S. HomePlusTM Advantage and HomeStory, you can get a cash bonus of up to $9,500!38 39
With a knowledgeable real estate agent by your side, you can begin the exciting process of finding your dream home in Arizona. Your agent will work with you to understand your preferences and requirements and provide you with a curated list of properties that meet your needs.
Use online platforms, attend open houses, and visit prospective neighborhoods during different times to gauge the ambiance. When evaluating potential properties, keep your must-haves in mind and consider the following factors:
- Neighbourhood: Take note of noise levels, safety, and overall feel.
- Amenities: Consider access to shopping, dining, entertainment, and outdoor spaces.
- Layout and size: Ensure the property meets your space and functionality needs.
- Condition: Be aware of any necessary repairs or upgrades that may affect the overall cost.
You don’t need to be present in Arizona to view homes. For out-of-country buyers, the challenge of property viewing is solved through solutions like virtual open houses. These virtual tours, either pre-recorded or live, provide a comprehensive, 360-degree view of a property, allowing potential buyers to explore every room and space as if they were there in person. With features like video walkthroughs and interactive floor plans, these virtual experiences offer a convenient and time-saving solution for those unable to visit in person.
Real estate agents can facilitate live virtual tours, offering real-time interaction and answering questions as they guide you through the property. This can be arranged at a time that suits different time zones, ensuring that Canadian buyers are as well-engaged in the property hunting process as local buyers.
During this step of searching for a home, it's crucial to remain flexible and open-minded. It may take some time to find the perfect home for you, but with the help of your agent, you can narrow down your options and focus on properties that are most suitable for you. Be sure to communicate openly with your agent about your budget, desired location, and any must-have features in a home.
Determining Your Must-Haves
When looking for a property, consider your must-haves. This can include the type of property, location, number of bedrooms and bathrooms, and specific amenities. Communicate these preferences clearly with your agent so they can narrow down their search and save you time.
Factors to Consider When Choosing a Location in Arizona
Arizona is full of diverse neighborhoods that cater to different lifestyles. Whether it's the urban chic of downtown Phoenix or the serene golf communities in Scottsdale, pinpoint your desired location. Look at things such as access to amenities when choosing a location and proximity to your workplace if you’re relocating to Arizona for work.
Once you've found a property that interests you, your agent will guide you through the process of making an offer and negotiating the terms of the sale. They will also help you navigate any legal or cultural differences that may arise during the process.
You've found a potential house; now it's time to ensure it's as dreamy as it appears at first sight.
Conducting Thorough Inspections and Due Diligence
Employ professionals to inspect the property and address concerns. This includes getting a home appraisal and home inspection. Your agent can recommend reputable inspectors and help schedule these appointments. Your cross-border mortgage advisor will also provide guidance on what is necessary for a smooth financing process.
Understanding the Legal and Regulatory Requirements
Title searches and title insurance, zoning regulations, and Homeowners Association (HOA) bylaws, if applicable, all warrant attention. A real estate attorney can help you decipher these requirements and ensure your purchase is legally sound.
The offer should match market values and your financial capabilities, but also be appealing to the seller.
Tips for Making a Competitive Offer
Your realtor's input on market value is key; use this as your compass. Additionally, a strong deposit and a pre-approval letter with your offer can make it stand out.
Negotiating the Purchase Price and Terms
Timing, contingencies, and seller concessions are all elements that can be negotiated. Your agent's skill in these discussions is invaluable and can save you money or protect your interests.
It's time to finalize the sale. Your agent will work with you through this process, which includes:
- Negotiating final terms and conditions with the seller
- Reviewing all legal documents and signing contracts
Understanding the Closing Process
The closing process is where all the loose ends are tied, from paperwork, funds, and agreements, to key exchanges and title transfers. Familiarize yourself with the closing procedures well in advance.
Securing Homeowners Insurance
Obtaining homeowners insurance is a crucial step in protecting your investment in Arizona real estate. Shop around for the best rates and coverage options, and make sure you have a policy in place before closing on the property. Mortgage lenders will require you to have insurance in order to secure financing. They may also require special coverage for disasters that may occur in Arizona, such as floods or wildfires. Flash floods are more common in arid regions, such as northern Arizona.
Preparing for the Closing Costs
Closing costs are expenses incurred during the transfer of property ownership. These can include appraisal fees, title insurance, and attorney fees. Your agent can provide an estimate of these costs and help you prepare financially.
RBC doesn’t charge bank or lender fees on its cross-border U.S. mortgages8, such as foreign national premiums. This can save the average Canadian homebuyer up to $4,500 USD in closing costs42!
- Use your Canadian credit history
- No pre-payment penalty
- Save up to $4,500 USD on closing costs on U.S. mortgages42
Ensuring a Smooth Transaction and Transfer of Ownership
Your agent, lender, and possibly attorney will work in tandem with you to ensure a seamless transition to your new Arizona property. Remember to have your identification, additional funds for closing costs, and your for-sale contract ready.
To close on your Arizona property, you can close in-person, appoint someone as your Power of Attorney (POA), conduct a mail-away closing, or even have a virtual notary. Remote Online Notary (RON) services are legal in Arizona. However, not all lenders offer this option, so be sure to confirm with your lender beforehand.
Enjoying Your New Home
Congratulations, you are now a homeowner in Arizona! Take a moment to celebrate before diving into necessary tasks such as moving and setting up utilities. Explore your new community and enjoy all that this beautiful state has to offer. Whether it's hiking through the Grand Canyon or strolling through the charming streets of Sedona, there is no shortage of adventures waiting for you in your new Arizona home.