Whether you have recently moved to Arizona from out of state, are a longtime renter looking to make the leap to homeownership before mortgage rates increase even more or are in desperate need of a larger home for an expanding family, there are a number of reasons people find themselves buying in Arizona’s increasingly competitive seller’s market. After all, the high demand for homes in the Phoenix area is one of the primary factors fueling the market. And while we encourage buyers to be strategic in their purchasing process at all times, it is especially important in times like this. Here is a list of our top strategies for successfully buying a home in a seller’s market.
Buying in a Seller’s Market
You can’t turn on the radio or open a newspaper without it being mentioned: The Phoenix-area real estate market is definitely a seller’s market. Inventory is low, mortgage rates are expected to increase and the demand for well-built homes is relatively high. So what does that mean if you are looking to buy a home? Would it be more prudent to renovate your house instead? Is now the time to buy a new home build? Let’s take a look at a series of things you should take into consideration.
Do not rely on Internet searches alone
We have all come to know and love the convenience of the Internet. Perusing real estate listings is no exception. But keep this in mind: If you have found a listing for a home on the Internet, in this market, the odds are that every other would-be buyer shopping in the same neighborhood and price range as you probably has the same listing in hand — especially if you are looking on a website like Zillow rather than directly at a realtor’s home search. That is not to say that you should not look online at all. On the contrary, pulling some listings that you like can be invaluable and save you a lot of time. Sharing those listings with a professional real estate agent will give them a good idea of the types of listing you are looking for and what your priorities are in buying a home. Be very clear about which elements of those listings are non-negotiable. For example, if you need three bathrooms in a house, let your realtor know so that you are not wasting any time looking at homes with two bathrooms. If you are lucky enough to have a really great real estate agent, this level of clarity about your wants and needs may even enable them to leverage their professional connections to find you a great listing that may not be on the market at all quite yet. Speaking of a great real estate agent …
Make your agent work for their commission
One of the keys to a successful real estate transaction is not only ensuring that the priorities of the homebuyer are considered, but that a seller’s are met as well. A great real estate agent will be proactive in connecting with the selling agent to get a clear understanding of what is important to the seller. This is invaluable when it comes time to writing a compelling offer for a home. Whether it is timelines or the bottomline, every seller is different. An agent who does not do their due diligence can cost you money (if a seller would have accepted a lower offer had they been able to close sooner).
If you are serious about buying in a seller’s market, put in the effort to demonstrate it to potential sellers. While you may have been advised by well-meaning friends to just get pre-qualified for home loans to understand how much house you may be able to afford, pre-approval offers you more leverage when you make offers by adding legitimacy to your offer. Pre-qualification is not a guarantee of funding. Pre-approval is. Your realtor should be able to recommend a reputable mortgage broker who will help you through the entire process and ensure you still have plenty of time to look at houses.
Should I buy a new home build?
Many people trying to buy in a seller’s market find themselves contemplating purchasing new construction as opposed to a previously occupied house. Whether or not this is a good move for you depends on a few different factors. Even in the competitive seller’s market, builders are usually more amenable to making certain concessions to buyers. But, this is highly specific to the builder. This is another place where your partnership with an experienced realtor comes into play. They should have the knowledge and relationships with builders in the area to know which concessions to ask for to get you as close to your ideal buying situation as possible while still pulling off a successful transaction.
Should I renovate my house?
Again, this depends on your situation. If you are renovating in hopes that you will be able to sell your current house at a higher profit to give yourself more money to compete with when you go to buy a replacement, you will want to be very careful. Ask a realtor for an analysis of your home’s current condition and then ask about which types of renovations would be the most beneficial and potentially give you a quick return on investment.
Alternatively, some buyers purchase fixer-uppers with the idea that they can get in at a lower price point and then spend the rest of their money on renovations to make the property fit their needs. Whether or not this is the best course of action depends on things like your overall budget, the types of renovations you would need and whether or not you would be able to put off moving into the property should it need major renovations that make the house un-occupiable for a time. Furthermore, the market for fixer-uppers is highly dependent on neighborhoods as some professional flippers are driving up the prices on even the most HGTV-worthy gut jobs in some areas. Talk this scenario out with your realtor.
Are you one of the thousands of people looking at buying in a seller’s market? Then you know better than anyone that the prospect can be anxiety-inducing. BUT, partnering with the right real estate agent in Phoenix can make the process far less scary and far more exciting. There is something exhilarating about the competitive aspect if you know that you have an edge that other buyers do not. Contact us today to tell us about your situation and let us pair you with the realtor who will help you come out on the other side of this seller’s marketing victorious!