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Archive for Disclosure


New CFPB rules August 1

On August 1, the CFPB will require lenders to do away with the Good Faith Settlement Statement and merge the disclosure into 2 forms that will add $50 to a buyer’s closing costs, make escrow and lenders compare notes 3 days before closing (they already do that), and other things that we project will hold up closings due to inconsequential, form-type matters.

CFPB says “bye-bye” to HUD-1 and Good Faith Settlement Statement – Makes New Forms

CFPB = Consumer Financial Protection Bureau

While the CFPB is supposed to represent the consumer, we hope they will rethink… especially the unnumbered lines of the forms which usually are included as reference lines.

Old forms & new forms by the CFPB

The Rule as explained by the CFPB

CFPB’s Consumer Summary

Just as in the Arizona Association of REALTORS Real Estate Purchase Agreement and any other of their forms, there are numbered lines…  it’s basic tech writing.  It’s a way of communicating, indicating, and referencing.

The AAR will be changing all purchase forms that must meet the CFPB and Dodd-Frank requirements on August 1.  Look forward to a new CFPB learning experience.

Go to as the time rolls around and schedule a CE class to help you navigate through the murky waters.

Good house-hunting…

SedonaKathy  Kathy Howe, owner/broker

  • how2arizona real estate LLC
  • 1120 W SR89A, B5
  • Sedona, AZ 86336
  • 928-274-4088

PS.  The CFPB has your back

An HOA or a POA…?

Arizona has stringent laws about a Homeowner Association (HOA) and how they should operate.  Our State Statutes restrict some vile HOA restrictions found in CC&Rs that have been created over the years.  Refer to Chapter 16, Article 1 (1801 thru 1818).


Even today, many HOAs choose to violate State Statutes that trump their CC&Rs, but that’s another story.  If you decide to purchase a home in Arizona, take the time to read the HOA governing documents and decide if this is the life you want to lead… you may get fined for having your garage door open or your trash can out over night or your weeds are too high (yes there might be a neighbor on the BOD who may measure them)…

Go to sell your home?  Some communities such as Vistancia in the greater Phoenix area continue to break the AZ Statute, ARS 3-1808, by only allowing signs approved by the HOA used to indicate the properties are for sale.  We do understand there are negotiations going on.

Until just recently (2013) HOAs would make outrageous requirements for owners who used their properties as rentals.  SB 1482 / HB 2695 signed by Governor Brewer on 4/17/14 curbed many of the abuses by trumping the HOAs and their requirements.

Other issues like transfer fees are being abused by the HOAs.  See ARS 33-1806 and the limits to fees charged by HOAs when someone sells their property (be sure to check the amounts when you purchase).

But what if you live in a POA?  A Property Owners Association.  What is it?  Actually it is not defined in Arizona Statutes.

Take the Verde Village Property Owners Association.  By their own words, they began as an HOA in 1972… 25 years later their Articles of Incorporation expired, so in 1997 the “VVPOA amended its Articles of Incorporation to not only renew its corporate existence, but to change the duration of the corporation to “perpetual”.  The site says that the dues are “voluntary”.  If you pay you can help make the rules.  If you don’t pay, you still have to abide by those paying members who make the rules.

There’s the Ventana Lakes Property Owners Association in Sun City Arizona.  And many more…  Do they fall under HOA statutes?  Are they different?  Can they be voluntary?  Ask an attorney…

Good luck…

Kathy Howe

  • how2arizona real estate LLC
  • 1120 W SR89A, B5
  • Sedona, AZ 86336
  • 928-274-4088




Sedona City Streets how2arizona real estate

Sedona City Streets  how2arizona real estate

Sedona City Street Map

The City of Sedona publishes online maps for streets.  In black are those streets that are maintained by the City, while the blue lines indicate those privately owned and maintained.

If you are buying a property in Sedona, it may be wise to have a survey done if you find that you own the street.  It is possible that your property line goes into the middle of the road.

If you click on the “maps for streets” it will link you to the City of Sedona site.  The purpose of the article is disclosure.  While most people live in areas where all streets are maintained by the city, many of Sedona’s are private.  Any repairs, resurfacing, or liability may be that of the owner.  Ask questions when you purchase.  Check with your insurance company.

Blue lines indicate private streets.

Sedona Private Streets how2arizona real estate

Blue:  Private Streets

The black lines indicate City-Maintained streets, while the blue lines indicate Private ones.

Suggestion:  if you are considering the purchase of a property with private streets, be certain to have a survey.  In many cases where there is no HOA, your new property line may run to the middle of the street.  So runs your maintenance and your liability.  Discuss the issue with your insurance agent.

West Sedona Streets how2arizona real estate

West Sedona Streets

Full disclosure is paramount to a happy real estate transaction.

Call me if I can be of assistance!  Kathy Howe – 928-274-4088

I’ll give you the name of the gentleman at the City of Sedona who can help you determine if your streets are city or private.



Arizona’s Dual Agency is Limited Representation

Arizona allows disclosed Dual Agency

Arizona's Agency Structure

This is the real estate structure in Arizona.  Salespersons and Associate Brokers hang their real estate licenses with the Employing Broker and are supervised by the Designated Broker.  All listing employment agreements and all buyer broker agreements are taken by the salesperson or associate broker for the employing broker.  Each real estate salesperson or associate broker is usually and Independent Contractor who works with the employing broker through an Independent Contractor Agreement.

Many sellers and buyers never meet the Designated Broker of the Employing Broker, the real estate brokerage firm, and are only familiar with “their” agent.  So it’s easy to understand why there is confusion and misunderstandings when Dual Agency occurs.

When a salesperson with the same real estate brokerage firm who works under the same Designated Broker writes an offer on a property listed by that firm, Dual Agency has occurred.  It occurred when the property showing took place…even before the offer was written…

Dual Agency = Limited Agency

It starts when the showing occurs and the disclosure should be made by the salesperson, if only casually.  The Arizona Association of REALTORS(R) have a great agency disclosure form called the READE form which includes disclosure about Dual Agency.

Here’s how Dual Agency works:

Arizona Dual Agency

If you want more information on how Dual Agency works in Arizona, read this post on our sister site, how2educate LLC

  • Ask questions if you are writing an offer on a property listed by your agent
  • Ask questions if your agent is writing an offer on a property within their brokerage
  • Ask your agent how things will work if an offer comes in from an agent with your brokerage
  • Ask how you will be represented in a Dual Agency situation

Successful Dual Agency transactions work when salespeople work for the equal interests of the principals.

Disclosed Dual Agency can work.  We call it Limited Representation.

See Lerner vs DMB.  The appeals court opined that a broker and a principal have the right to negotiate their representation and we do that through the Consent to Limited Representation standard Arizona Association of REALTORS form.

Kathy Howe  Owner/Broker, how2arizona real estate LLC,

and owner/administrator/educator of how2educate LLC

Arizona’s Dual Agency aka Limited Representation

“As Is” Means “Buyer Beware”

as is

Are you thinking of purchasing a home? It’s a great time to buy!

“As Is” = “Buyer Beware”

Know that if you are going to purchase a foreclosure or a “short sale”, you will be required to sign an “as is” addendum. That addendum may be a bank-attorney drafted “as is” paragraph in the purchase contract addendum, or it could be the Arizona Association of REALTORS(R) “as is” addendum.

Whichever, you need to give some thought to what the “as is” addendum means.

Is “as is” just a statement that the Seller is not going to pay for repairs?

No. Absolutely not.

  • It’s about you taking the property in its current condition.
  • It’s about you not getting any warranties.
  • It’s about the Seller having to disclose all material latent defects.
  • It’s about the Seller having to give you time for inspections.
  • It’s about you doing inspections.
  • It’s about you checking and rechecking information.
  • It’s about you having to pay for repairs that are normally costs of the Seller.

Your Buyer’s agent will give you direction about city, county, state officials to contact. The HOA, homeowner association, information will be made available to you and you should talk with them and the neighbors. Be sure to ask for the “pickiest” home inspector. Yes. Without any Seller disclosure on a foreclosure, you want an inspection that addresses everything. You want an inspector who tells you the “good, bad, and the ugly.”

Arizona’s Home Inspectors are certified, but there are still A, A+, and “B” inspectors. Ask your agent for names of 3 inspectors and spend the time to interview them. Don’t be blown away by a huge binder with lots of paper, but rather look at the background of the inspector, and ask for references.

“As Is”

More information can be obtained about the language of the purchase contract and the “as is” addendum in a post at how2educate’s website.  Click here.

The more you know about “as is”, the better your buying experience.

While you are looking for Sedona, Verde Valley, Jerome, Clarkdale, Cottononwood, Cornville, Village of Oak Creek, or Sedona Golf Resort properties for sale, you’ll give us a call.  We can assist you with “as is” property conditions.

Kathy Howe  Owner/Broker  928-274-4088

as is

Sedona “as is” properties for sale include foreclosures, short sales, and traditional sales.

Coconino County Septic System Worksheet

Coconino County Alternative Waste Disposal System worksheet when sewer hook-up is not available.

Use this worksheet when trying to decide what size waste system you will need when your build your dream home.

Coconino County

One note to be concerned with is the notation that in Coconino County, any room that is 70 square feet is considered a bedroom for the purpose of computing septic or alternative waste system size.

Whether you purchase one of the many Sedona homes, lots, or properties for sale in the Uptown, Palisades, Chapel Area, the Coconino County Rules will prevail.  See the map bifurcating Sedona into 2 separate counties:  Coconino County and Yavapai County.  The City of Sedona has its rules as well.

Coconino County


Consulting with your contractor about the need for a good engineer when you build your dream home, or consulting with the engineer before you decide to remodel the dream home you have purchased will go along way in saving you money if you do not have sewer hook-up.

Procedures for your Coconino County site evaluation.

Coconino County remodel or addition requirements.

If you are purchasing a Sedona home for sale, it is wise to ask the listing agent for a copy of the Coconino County alternative waste disposal system approval.  There’s a lot of information to gain and you may wish to know about the system before you purchase rather than finding yourself in the middle of a due diligence period without time to understand the system and what it will cost to maintain.

Kathy Howe aka SedonaKathy

  • how2arizona real estate LLC
  • 450 Jordan Rd “C”, Sedona, AZ 86336
  • 928-274-4088

Proud resident of Uptown Sedona (Coconino County)

Does “As Is” Mean No Seller Property Disclosure?

Seller Property Disclsoure

In Arizona we use Hill v. Jones as our foundation for seller property disclosure.

“A seller has an affirmative duty to disclose material facts which adversely affect the value of the property.” Arizona Court of Appeals, 151 Ariz. 81, 725 P.2d 1115 (1986).

Recently we have begun to see more sellers using the “as is” addendum in traditional sales (not just REOs and foreclosures).  What does this mean to buyers?

Another Arizona case describes “as is” and its impact on a transaction:  S Development Company v. Pima Capital Management Co.

“We hold that latent defects in a property sold “as is” that are known to the vendor must be disclosed to the purchaser.   We also hold that a vendor may be held liable for negligent nondisclosure of facts basic to the transaction when the purchaser is precluded by the vendor from discovering those facts.”  These words reaffirm Hill v. Jones.  Sellers cannot say they have made all disclosures and then not allow the buyer an inspection period.

Further in S Development Company v. Pima Capital Management Co., “…Consequently, absent fraud or misrepresentation, a contractual agreement to accept real property “as is” with the right to inspect defeats liability…”

What is the difference between a latent defect and a patent defect as it affects property disclsoure?

Patent comes from the word “apparent”; therefore, a patent defect is one that can be discovered visible or by an inspection.

Latent defects are described as:  “a hidden flaw, weakness or imperfection in an article which a seller knows about, but the buyer cannot discover by reasonable inspection.” – the Free Legal Dictionary

“As Is” in Arizona has always been upheld as “caveat emptor” or “buyer beware”, if 2 things happen:  1)  seller discloses latent material information; and 2)  buyer is allowed an inspection period.

Recently this story came out from Inman News (one of real estate’s top news organizations) about “as is” as it applies to Alabama real estate transactions.  Teer v. Johnston

As a buyer it is highly recommended that you and your agent discuss the ramifications of signing an “as is” addendum.  The onus of proof that the seller committed fraud or misrepresentation is on the shoulders of the buyer.  While the proof may be at hand, the courts may make a “caveat emptor” decision.

If asked to sign an “as is” addendum, try to write it out by stating something to the effect:  “…buyer is not asking the seller to pay for or to make any repairs but buyer conditions the sale on the warranties of sections…”

Most sellers think that “as is” means they don’t have to pay for repairs.  The same holds for some buyers and their agents.  It’s a lot more than about repairs…

It’s about property disclosure

property disclosure

Kathy Howe aka SedonaKathyproperty disclosure

Proud resident of Uptown Sedona

Does Your Real Estate Agent Negotiate for You?



Does your agent merely fax over your offer to the seller’s agent?


Does your real estate agent ask to be present at the presentation of the offer for you?

As the seller, do you want to be able to ask questions about the buyer?  Might your questions of the buyer’s agent be able to clear up misunderstandings and give you a clear picture of the offer?  Might you and your agent be able to negotiate with the buyer’s agent?

In most areas of the country the NAR Multiple Listing Policies state something like the following:


The cooperating broker (subagent or buyer agent) or his representative has the right to participate in the presentation to the seller or lessor of any offer he/she secures to purchase or lease. He/she does not have the right to be present at any discussions or evaluations of that offer by the seller or lessor and the listing broker.

However, if the seller or lessor gives written instructions to the listing broker that the cooperating broker not be present when an offer the cooperating broker secured is presented, the cooperating broker has the right to a copy of the seller’s or lessor’s written instructions. None of the foregoing diminishes the listing broker’s right to control the establishment of appointments for such presentations.

The seller’s agent is also allowed to be present at the presentation of the counter offer unless the buyer gives written instructions to his/her agent not to allow the other agent at the presentation…and the seller’s agent has the right to see the written refusal of presence.


As a buyer or seller, your agent should welcome the presence of the other agent.  Having the other agent at the presentation insures that all parties have been represented.  Both agents have been hired to negotiate for their clients.

You hire an agent to negotiate for you.

If you are the buyer, ask that your agent be at the presentation of the offer. To be certain your offer is presented in its total and to negotiate if the situation presents itself.

Before selecting an agent, ask the question:  “Do you encourage the buyer’s agent to be at the presentation of his/her offer?”  and “How do you intend to negotiate for me?”

If you get the response:  “we don’t do things that way here”…  ask for the agent to explain how they intend to negotiate for you.

Expect the best!  Hire an agent who will negotiate for you.  After all, most advertise that they “will negotiate for you”.

GREAT negotiators:
ASK more and better questions…
LISTEN intently to the answers…

~ Jim Hennings

negotiateKathy Howe aka SedonaKathy

how2arizona real estate
1120 W SR89A, B-5, Sedona, AZ 86336
Proud resident of Uptown Sedona!


Kathy Howe owns and operates how2educate LLC (real estate education) and is an Arizona Department of Real Estate educator who teaches real estate, including how to negotiate for your clients.