The median home price has grown from $288,000 to $399,000 over the last year.
Here are the things buyers most often consider to sweeten the deal and get their offer accepted in this market:
1) Offer over asking price – This is a common occurrence as more buyers arrive in Arizona flush with cash from selling in a more expensive market and multiple offers make it competitive. There are buyers with healthy savings from stimulus payments and who have spent less during the pandemic, but not everyone can offer over asking price. It is not uncommon for offers to include an escalation clause to scale their offer over a competing offer by a fixed amount. Typically, proof of other offers is required and these are falling out of favor with sellers who just want a solid highest and best offer.
2) Waive the Inspection – A misconception is that waiving the inspection means there is no inspection. What it really means is the contract is not contingent upon an inspection; therefore, a buyer cannot cancel and receive a return of their earnest deposit based on the results of the inspection. It is wise for a buyer to perform a home inspection so they know the property condition. Sellers are not typically doing repairs prior to putting homes on the market, so a buyer needs to know what outstanding maintenance issues exist. A preferred option is to keep your inspection period and preserve your right to accept or reject the property based on condition. A buyer inspection period is also for due diligence on the systems of the home, such as well and septic, and of the overall area, such as schools and roads.
3) Sign an Appraisal Waiver – This is similar to the inspection waiver and it doesn’t mean there is no appraisal, unless the buyer is paying cash. Bank loans are based on an appraised value of the home and appraisals are for the bank. It simply means the buyer cannot cancel the contract or ask for a price reduction if the home should fail to appraise. Buyers of homes with an appraisal lower than the purchase price will have to come to the closing table with the difference between appraisal price and purchase price if they waive the appraisal contingency.
4) Offer Post Possession – No one wants to move twice, so some offers are chosen if the buyer offers a period of time after closing that the sellers can remain in the home. This could be a few days to a few months. Find out what is important to the seller and then everyone can move once.
5) Offer Buyer Concessions – This is a turn-the-tables moment, as sellers have long been asked to help buyers with closing costs and fees in addition to paying both sides of the commission. There is no reason a buyer can’t offer the same to a seller! A buyer could also offer to pay for moving expenses such as moving trucks, packing service, boxes… it all adds up!
6) Get Creative Based on What’s Important to the Seller – We have seen buyers offer things to the seller that vary from a vacation getaway to a hot pizza delivered upon contract acceptance! These gimmicks don’t outweigh the strength of a good, clean offer, so take this tip with a measure of advice from your agent.
7) Work with a Great Agent! Don’t underestimate the importance of agent-to-agent relationships. This is not the time to use your cousin or neighbor’s best friend from another area just to be nice. The agent community mirrors Prescott as a closely-knit community. The most productive agents work with each other on sale after sale. A listing agent who knows the buyer agent will communicate in a timely manner and get the deal done will go a long way when offers are accepted by the seller and listing agent.
Here is a market update for Prescott Valley, where listings are down year over year and sales are up, creating upward pressure on price. The median home price has grown from $288,000 to $399,000 over the last year. These numbers are meant for general interest only. Please review your specific situation with a qualified local agent. QCBN
By Leslie Guiley
Leslie Guiley is chief operating officer at Better Homes and Gardens Real Estate | BloomTree Realty, which includes BHGRE Commercial and she is an area ambassador with Inman News.
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