If you’re still waiting to see the Phoenix housing market bottom out, you may have waited too long.
With just over 15,000 homes currently for sale in the Greater Phoenix Area, we now have less than half of the inventory that we had for sale at this same time last year (when it was over 32,000)! And since lower inventories usually create increased competition, much of the Phoenix area is starting to feel like a seller’s market again.
So, what’s a buyer to do in this shifting market? There are thousands of lists of home buying tips available across the internet, but remember, every market is different. Here below is a list I put together specifically for Phoenix area home buyers, based on Arizona’s Residential Resale Real Estate Purchase Contract. No, they won’t ensure every offer you ever make will be accepted, but talk with your agent about them and see if one or several of them could help your offer stand out.
17 Ways to Get Your Offer to Buy a House Accepted in a Seller’s Market
1. Make your offer as “clean” as possible. Don’t ask the seller to pay for your home warranty, and the homeowner’s association’s transfer fees, and your lender’s fees, etc.
2. Don’t ask the seller for their personal property (refrigerator, washer, dryer, etc.)
3. Ask your agent to find out what’s important to the seller (price, terms, closing date, etc.) and then craft your offer around this information.
4. The typical inspection period is 10 days long. Consider shortening the inspection period to five or seven days.
5. You may have to offer more than the list price. Really? Yes. Really.
6. A typical earnest deposit is 1% of the purchase price. Give the seller more than this to show you’re financially strong and serious about buying the home.
7. If you can afford to do this, offer to pay cash and provide proof of the funds you’ll use.
8. If you feel confident in the price you’re offering, waive the appraisal contingency. This will mean, if the home appraises for less than the purchase price, you’ll make up the difference in cash.
9. Add an “escalation clause” to your offer that outbids any other offer up to a given price. For example, “Buyer will pay $500.00 over any offer up to $200,000.” Your agent should check with his/her broker for a recommendation on the specific language to use before doing this and then require a copy of the next highest offer the seller received.
10. Offer to forfeit your earnest money to the seller if you cancel the purchase contract after the inspection period.
11. Make a larger down payment than what is required for your loan program. For example, put 5% down on your FHA loan, rather than the minimum requirement of 3.5%. Again, this shows the seller that you are financially strong, but more importantly, by making a larger down payment, you’ll finance less, and save more money over the long term.
12. Offer to buy the home in as-is condition. Signing an As Is Addendum doesn’t mean you can’t have the home inspected. Here in Arizona, you can still get a home inspection, cancel the contract, and get your earnest money back if you find something wrong with the home and notify the seller during your inspection period.
13. Agree to open escrow with the listing agent’s preferred title company.
14. Agree to get pre-qualified with the listing agent’s preferred lender. This doesn’t mean you have to finance the home with the listing agent’s preferred lender. It will just reassure the sellers that you really are qualified to purchase their home.
15. Write a letter explaining why you chose the seller’s home and why you want to live there. You may even include a photo of your family, if you feel comfortable doing this.
16. If your bid on the home isn’t accepted, have your agent ask the listing agent if the seller wants to hold your offer as a back-up offer.
17. Make sure you’ve provided all of the required documents with your initial offer. If a seller receives multiple offers, one of the first things he/she often does is throw out the sloppy and incomplete offers.
Good luck and happy home buying!
Image Credit: poweron on Flickr. CC Licensed.