Arizona home inventory today is low and the buyer activity is high. The housing market is a sellers market driven by high buyer demand from people moving from other states, low mortgage rates, that puts the sellers in the driver's seat and home values on the rise.
Here are some ways this can help you if you are a seller:
1. Higher Home Values
Homes are winding up in bidding wars, driving prices up. Buyers are bidding up the prices and sellers are able to net more profit when the home sells. Typically a seller is offered a price and the buyer asks for some repairs and closing costs. The current market sellers are having to do less repairs and less helping out with buyers closing costs. Netting the seller more money!
2. Sellers are getting more money
Making a profit when selling a home is not out of the ordinary, but home sellers are walking away from the sale of the home with a lot more than the average seller. Equity has risen every month for months and months. The experts at CoreLogic are saying “ second quarter of 2020, the average homeowner gained around $9,800 in equity” . Some neighborhoods gained more!
3. Buyers are giving sellers better terms
Sellers are not being asked to pay as much closing costs, or repairs, and the seller is definitely in the driver's seat during negotiations. With multiple offers the seller can look at all offers and pick the offer that makes the most sense. The offer that will appraise, and net the seller the most money.
Sellers become renters or buyers!
If you are a seller, be prepared to be a buyer also! This means you will be buying at a time when rates are low! This typically gives buyers more buying power. The competition for homes is high in Arizona. You will probably wind up staying with family or renting for a bit, while finding a home making an offer with at least a few other offers on the home. We have seen seller rent backs in this market, but typically buyers will not be too interested in becoming a landlord.
There are several ways to avoid becoming a renter
1. Become a landlord, Buy a home move in and rent out the home you are own now. For many reasons this is a good plan, your probably going to make a little money every month. The tenant is going to be paying the mortgage, and this gives you time to decide what direction the market is going. Sell when they move out, or rent it back out. Be patient and double check everything that the buyer puts on the rental application. Drive by the house they are renting now, make sure the yard is kept, the garbage pails are put away, the blinds are in good condition etc.
2. Bridge Loan, short term financing on the home you own, and a home you buy. This gives you the time to buy a home move. Then stage and sell your home. Then obtain permanent financing.
3. Stay with friends or relatives. This is a good option if you have a mom or dad that have plenty of room and know your looking for a home.
4. Sell and rent a house or an apartment. I would find the rental first, then start moving over some items to de-clutter. Then put your home on the market (this works October 2020, may not work next year).
5. If you can be approved for both, buy then sell. New mortgage payments may not start right away, or you can work something out with the lender to give you 30/60 days before your new payment starts. You can get away with this right now, not all markets will allow this unless you want to own the home your selling for 90 days. 60 days to sell 30 to go through escrow is not that out of the ordinary in a normal market.
Any way you look at it, don't rush to find a house unless you know the floorplan and area will provide that type of home you will enjoy and love. You don't want to rush into a new home and wind up stuck in a home/neighborhood you will regret for 5+ years until you can sell again.
Photo from Josh Sorenson Pexels.