You'll be even more surprised that it is NOT always the highest price offer.
Before you get angry and go into denial as to what it takes for a Buyer to land the contract, let's revisit what is going on in the Greater Phoenix market.
Arizona Seller's are holding tight right where they are. Why? Half say because they need to sell before they can buy and there is no inventory to select from. The other half say that as long as working from home and/or kids are doing distance learning is just temporary, that they do not need a larger home. Exactly how long can families work from their living rooms and kitchen tables? And for those that are waiting to see what happens with the election will find themselves in even more of a pickle as we move into 2021.
Presidential elections do not affect the real estate market. It has been S-L-O-W-I-N-G down our increasing demand (phew) but I for one am expecting a Buyer surge after the elections. Not only from Arizona residents that have been sitting on the fence but all the Buyer's coming in from other states.
Now, let's get to the nitty gritty about what is needed to land the contract. It's important to know if a Seller is listing their home at a lower price (not low price) that will create a multiple offer frenzy OR list it high 'because they are not in a hurry'. It has been proven that the final contract will be a higher offer if it is priced on the lower side to attract more Buyers. From this, the Seller can also handpick which offer is the strongest and with the highest probability of closing.
Tip #1 Offer Price - Comps need to be run before an offer can be made. I once posted an agent's gripe about her writing an offer for $40,000 over a $300,000 list price for a home in Maricopa and she wondered why her Buyer did not get the home. Reason: The home would have never appraised for that much. Best approach is to go as high as you can prove the value and then add in the amount of CASH you have (or are willing) to bring to closing. Do not assume that all Seller's are open to the idea of an escalation clause or do not see a low price with the escalation clause as a weak Buyer.
Tip #2 Earnest Deposit - Do not cut corners here. Way too many agents don't advise their client's well right here. Buyer's have no idea when they lose a home because of their agent.
Tip #3 Inspection Period - Shorten the normal 10-day inspection period. I call my home inspector before I write an offer so I know how quickly I can get in if we have an accepted contract. This also gives the Seller a shorter time-frame to know if the Buyer will be proceeding. Value is not just in money.
Tip #4 Pay for your own home warranty and if there is an HOA, pay for the transfer fee. Home warranties run about $500-$700, HOA fees may run $200-$300. In the scheme of things, these are minimal costs.
Tip #5 The GOLDEN EGG - As the Buyer, offer to pay some of the Seller's closing costs. Yes, I really typed that.
If a Buyer really wants in this market, they need realistic but strong numbers, guarantees for the Seller and an extra $3,000-$5,000 to seal the deal.
The longer Arizona Buyers wait to move forward, the harder it will be for those migrating from other states with a lot more cash in hand. Meanwhile, rents are jumping up faster than property values.
Sheryl (Shey) Willis, CNE
GOARIZONA REAL ESTATE
Realtor
USAHomebids State Advisor
Zillow Premier Agent
Redfin Partner Agent
Direct: 602-748-5588
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Sheryl Willis, Go Chandler and eXp Realty does not engage in or condone activities which illegally discriminate on the basis of race, color, religion, sex, age, national origin, disability, familial status or any other protected classification under federal or state law.