Phoenix Home Sale Bidding Wars ~ Have you got your Ninja on

House for sale. Hits the MLS at 7am on Tuesday. 16 offers received by 7am on Wednesday. Half of the offers are cash buyers and almost all of the offers are above full price.  It’s a full-fledged seller’s market in the Phoenix Metro area.  For over 6 years, buyers have felt pretty powerful as they made low-ball offers and sellers felt the sting of a declining market.

Now it’s the sellers who are smiling.

Sellers who 6 months ago were frustrated because no one had looked at their home for weeks as they reduced their price again and again, are now finding they might as well plan on being being gone the day the house is listed due to the revolving door of showings from dawn to dusk.  The cars of potential buyers and their agents are lined up on the street before the sign even goes up.

It’s flashback 2005.

So which offers are winning those bidding wars?  What tactics are being used to make an offer stand out above the rest?

phoenix home bidding wars1. Cash is King.  A cash offer almost always wins.  Why?  No worry about lending issues.  AND…many agents are  now pricing their listings about 10% above recent sales…at least to start.. and everyone knows that the appraisal may be an issue.  Cash buyers aren’t required to have an appraisal and most don’t get one.

2. Financed offers with the appraisal contingency waived.  This means an offer is closer to a cash offer.  If the appraisal comes in low, the buyer has agreed to pay the additional funds above the appraised value that their lender will require. Not quite as good as a cash offer, because a buyer still has an inspection period and if they get the appraisal during this time and if it comes in low, they can cancel due to a random inspection issue.  It happens when the ‘buzz’ from the frenzy of bidding on a home wears off and the buyer now feels they may have got caught up in the moment and overpaid for the home.

3. Conventional financing will usually overpower any other type of financing, especially when a seller is putting 20% down…so proceed to #4

4. Enticements are being offered. Buyers and their agents are getting creative.

5. Buyers are not only removing appraisal contingencies, they are offering to purchase the home “as is” and are removing the inspection contingency which means they waive their right to cancel the offer due to inspection items.

6. Buyers are making their earnest money non-refundable.  Which means if they choose to cancel during the inspection period the seller gets to keep their earnest money.

7. Buyers are offering the seller the opportunity to stay in their home for 30 days after closing for free to help make the seller’s transition easier.

8. Buyers who are financing are offering to “purchase” items that typically stay with a home…things like ceiling fans and dishwashers…on a separate bill of sale.  This is a sneaky way to give the seller extra money for their home which doesn’t affect the appraised value or the buyer’s qualification to purchase.

9. Can’t forget the “warm and fuzzy” letter to the seller.  This can work if all things are equal.  The buyer’s agent writes up an introduction letter to the seller that tells the seller that “Mr. and Mrs. Smith are excited to live in this beautiful home filled with love as they begin their life together…”

The good news is our values are rising but home prices are still lower than they were and are a great value for anyone who wants to live in paradise…8 months out of the year.

About Amy Jones Group

Amy Jones is the owner of Amy Jones Group Keller Williams Integrity First. The Amy Jones group has been recognized as the #1 Real Estate Team in Chandler by the Phoenix Business Journal and voted Best of Our Valley for 4 years.

The Amy Jones Group specializes in real estate in Chandler, Sun Lakes, Gilbert, Mesa, Tempe, Ahwatukee, and Phoenix.

Comments

  1. Of course, the cash is King, we need to remember the rule.

  2. I’m glad to see things are turning around in Phoenix. Looks like still some good buys available. I think the real estate market here in Bend Oregon is turning around also.

  3. Good news for the entire nation…eventually, I hope!