So you think you’re ready to take the plunge and put in an offer on the home you’ve always wanted, whether it’s your first home, a bigger home for your growing household, or an investment property? Seems pretty easy right? Just go online and get some tips, read Facebook, or watch a YouTube video on how to make an offer and get the right home for you.
While that is one way you can do it, it will most likely end up causing you to pay more money that you should and many months trying. Midway through 2020, things in the Maricopa housing market have changed a little bit. If you haven’t heard, there is currently a shortage of homes for sale, which makes it a very strong seller’s market.
Currently in Maricopa, there are only 90 homes available for sale. Subtract the 24 homes that are in Province, the active adult community, and the 15 homes that are brand-new builds and will take between four and six months and you are left with a whopping 51 homes to choose from.
Those, by the way, are the same 51 homes that everyone else and their brothers are looking at, too.
These problems are not just local to the Maricopa market. Just for comparison, on any other given year there were about 35,000 homes for sale in the Phoenix Metro area. Currently, as of the end of June, there are only 9,390 homes for sale in the metro area, or about 25% of the typical average.
So, it’s not just a Maricopa problem, it’s a trend seen all over the state and in several other states, too.
If the last time you purchased a home was either during the foreclosure market, or even up to a few years ago, the market was much different and it was actually slanted toward the buyer.
So, here are some great tips to help you navigate this new seller’s market.
- Have your agent reach out to the seller’s agent. Find out if there’s any other offers and find out what the seller’s reason is for selling and their timeframe. If the seller currently lives at the house and they don’t have to start a job in another state for three months, that is great information to have. If they have a brand-new home that has just been built and are getting ready to move in quickly, that is great information to have and can be used to make your offer stronger.
- Write the cleanest offer possible. There are certain items that need to be attached to every offer. One is a prequalification letter. The second, at least in the city of Maricopa, is an HOA addendum. Submitting an offer missing either one of those documents makes it an incomplete offer that may not be given serious consideration by the seller.
- Avoid asking for personal property. This is something to avoid in a seller’s market. If your offer is the one that asked for a bunch of extra furnishings, the seller may focus on other offers.
- Write a personal letter to the seller. Compliment them on their choice of decorating and furnishings. Let them know they have taken great care of the home and you would love to see you and your loved ones in that home making memories. This personalized, handwritten letter can be submitted with the offer and it will get the attention of the seller. If another offer is very similar, the letter may make all the difference!
- Have your lender, the one who wrote the pre-qualification letter, reach out to the seller’s agent first thing the next morning. That agent receiving a call from the lender will let that agent know that the loan officer is indeed responsible and easy to communicate with. While the lender is on the phone with the agent, he/she can also let the realtor know that the prospective buyers are very strong financially and the loan process should be flawless.
- Add an escalation clause. An escalation clause is something that many newer agents are not familiar with because they’re generally only used in a strong seller’s market. Basically the clause reads that your client agrees to increase their offer $500 higher than any competing offer up to a specified amount. The other agent will need to prove the amount of the other offer(s).
- Consider giving the seller occupancy after closing for X number of days. Many sellers are hesitant to sell because they don’t 100% have another home lined up. Doing this may calm their fears and get them to pick your offer over one a little bit higher just because there is less stress involved.
- Close on the home faster. This goes back to tip number one. If the home is empty, the sooner it sells, the less the seller pays in property taxes, utilities and possibly mortgage. You closing on the home early may save the seller $1000 over another offer.
These are a few tips, but here’s the bottom line: trying to buy a home in a seller’s market is a different beast than buying in a market that is buyer-friendly. Communication is so important, and finding out as much information as you can may really help your offer be successful without costing you any more money.
A final, but extremely important tip, is make sure you have a local Maricopa real estate agent who knows the market inside and out. Homes are like fingerprints, each one is unique and an experienced real estate agent can help you find your match.