Read the what? Unless you’ve purchased a new home, you may not be aware of a document called the Subdivision Public Report. If you are considering purchasing a new home, you need to understand the importance of this document.
Arizona home builders are required by law to assemble a disclosure document called a Subdivision Public Report when subdividing land for sale. The home builder completes an application with an extensive questionnaire and submits it to the Arizona Department of Real Estate (AZDRE) who puts the information into a document called the Public Report. It’s not a quick read, but it is important.
The Public Report contains helpful information about the local schools, shopping, parks, hospitals and emergency services. It usually contains the names and phone numbers you’ll need for setting up your utilities prior to close of escrow.
More importantly, however, are the disclosure items that you should be aware of before you sign your purchase agreement. The Public Report discloses issues relating to:
- Fees: Taxes, Assessments & HOA
- Flooding & Drainage: Is the home located in a flood plain?
- Soils: Is there evidence of expansive soil or other soil problems?
- Airports: Is the home located in a “High Noise or Accident Potential Zone?”
- Surrounding properties: What is the zoning and current use of the area around the community?
Other vitally important facts are also included in this report such as how your earnest money will be handled. Some builders deposit those funds into a neutral escrow account; others however, will deposit those funds directly into their general account. You have more risk with your funds in their general account. If the builder goes out of business and cannot complete your home, chances are there’s no money left in the general account to refund deposits. Therefore, the AZDRE requires that it be disclosed in the Public Report if it is the builder’s policy to deposit earnest monies into their general account.
If the builder has filed for bankruptcy protection, that must be disclosed in the Public Report as well. In this case, the AZDRE requires that earnest monies be deposited into neutral escrow accounts.
When you sit down to purchase a new home, the public report should be given to you. If it is not given to you, ask for it. If you are told that the Public Report is not available, pick up your checkbook and leave. Most of the homebuilders in our Valley are honest business people who follow the rules and offer a quality product. But there are cases where someone has something to hide. Don’t take the chance.
You will be asked to sign a “Receipt” for the Public Report. That document is often handled with the rest of the paperwork when you buy a new home. Read the Public Report BEFORE you sign the Receipt! The Receipt states that you “HAVE READ” the Public Report.
Buying a new home can be a wonderful experience. Most communities offer a wide variety of floor plans to fit your needs and have extensive options list so that, even on a budget, you can personalize your new home. So complete your due diligence first, and then enjoy the experience!
Get more information on Public Reports from: Arizona Association of Realtors
To search for and download a Public Report use: AZDRE’s on line services
For more information from AZDRE on: Illegal Subdivisions
Teresa Dempsey (480) 634-7975
Teresa Dempsey is an Associate Broker with Keller Williams Legacy One Realty. Together with her husband Kevin they formed The Dempsey Group and offer a wide variety of real estate services including professional assistance for buyers, sellers and investors. Teresa spent the majority of her real estate career in the new home business and now uses that experience to help clients find the perfect new home. Visit DempseyAZ.com today or call Teresa at (480) 634-7975 for expert representation in a rough market. The Dempsey Group, Making a difference...One family at a time
Great article with important information for homebuyers!