Our nation is in the midst of a serious housing crunch, but there is some good news for buyers in the North Phoenix area. While inventory remains somewhat competitive, with homes receiving an average of two offers, recent trends show a decrease in home prices compared to last year. The median sale price of a home in North Phoenix was $500,000 last month, down 2.0% since last year.

Here are five tactics you can utilize to sweeten your proposal and outshine your competition in the North Phoenix real estate market:

1. Demonstrate Solid Financing
The reality is, no one gets paid if a home sale falls through. That’s why sellers (and their listing agents) favor offers with a high probability of closing.

Sellers particularly love all-cash offers because there’s no chance of financing issues cropping up at the last moment. But don’t despair if you can’t pay cash for your home. According to the National Association of Realtors, only about 1 in 4 home purchases are all-cash deals, which means the vast majority are financed with a mortgage.

If sellers are assured that financing will come through, buying with a mortgage doesn’t have to be a big disadvantage. The most important step you can take as a buyer is to get preapproved before you start looking for homes. A preapproval letter shows sellers that you are serious about buying and that you will be able to make good on your offer.

It’s also important to consider the reputation of your lender. While sellers may not know or care about a lender’s reputation, their agents often do. Some lenders are much easier to work with than others, especially if you are pursuing certain types of mortgages like FHA or VA loans. If so, you’ll want a lender who specializes in these types of mortgages.

2. Put Down a Sizeable Deposit
Buyers can show sellers that they’re serious about their offer and have “skin in the game” by putting down a large earnest money deposit.

Earnest money is a deposit held in escrow by a title company or the seller’s broker or lawyer. If the purchase goes through, it is applied to the down payment and closing costs—if the sale falls through, the buyer may lose some or all of that deposit.

3. Ask for Fewer Contingencies
Most real estate offers include contingencies, which are clauses that allow one or both parties to back out of the agreement if certain conditions are not met. These contingencies appear in the purchase agreement and must be accepted by both the buyer and seller to be legally binding.

Common contingencies include:

Financing: A financing contingency gives the buyer a window of time in which to secure a mortgage. If they are unable to do so, they can withdraw from the purchase and the seller can move on to other buyers.

Inspection: An inspection contingency gives the buyer the opportunity to have the home professionally inspected for issues with the structure, wiring, plumbing, etc. Typically, the seller may choose whether or not to remediate those issues; if they do not, the buyer may withdraw from the contract.

Appraisal: Most lenders will not offer a mortgage on a home that costs more than it’s worth. An appraisal contingency gives the buyer an opportunity to get the home professionally assessed to ensure that its value is at or above the sales price. If an appraisal comes in low, the seller may be asked to renegotiate the contract.

Sale of a prior home: Some buyers cannot afford to purchase a new home until they sell their previous one. If the buyer is unable to sell their current home within a specified window of time, this contingency enables them to withdraw from the contract without penalty.

Since contingencies reduce the likelihood that a sale will go through, they generally make an offer less desirable to the seller. The more contingencies that are included, the weaker the offer becomes. Therefore, buyers in a competitive market often volunteer to waive certain contingencies.

However, it’s very important to make this decision carefully and recognize the risks of doing so. For example, a buyer who chooses to waive a home inspection contingency may find out too late that the home requires extensive renovations, and a buyer who waives the appraisal may risk their mortgage falling through. If you back out of a home purchase without the protection of a contingency, you could lose your earnest money deposit. We can help you assess the risks and benefits involved.

4.Offer a Flexible Closing Date and/or Leaseback Option
Consider offering a flexible closing date that accommodates the seller's needs. This could be particularly helpful if the seller needs more time to find their next home or complete necessary repairs. Additionally, a leaseback option can be attractive to sellers. This allows them to continue living in the home for a specified period after the sale, providing a seamless transition. By offering these flexible terms, you can make your offer more appealing and increase your chances of a successful deal.

5. Work With a Skilled Buyer’s Agent
In this competitive North Phoenix real estate market, one of the greatest advantages you can give yourself is to work with a skilled and trustworthy real estate professional. A knowledgeable agent can help you navigate the complex process of buying a home, from finding the right property to negotiating the best deal.

A skilled buyer’s agent can:

• Provide expert advice: Your agent can offer valuable insights into market trends, property values, and negotiation strategies.
• Help you find the perfect home: They can use advanced search tools to identify properties that match your specific needs and preferences.
• Handle the paperwork: Your agent will take care of all the paperwork, from drafting offers to coordinating with inspectors, appraisers, and title companies.
• Represent your best interests: Your agent will work tirelessly to negotiate the best possible deal on your behalf.

By working with a skilled buyer’s agent, you can increase your chances of finding your dream home and securing a favorable deal.

Helping You Find Your Dream Home

Whether you’re a first-time homebuyer or a seasoned investor, we can help you navigate the complexities of the North Phoenix real estate market. We’ll work closely with you to understand your unique needs and goals, and we’ll use our expertise to help you find the perfect property.

Contact us today to schedule a consultation and get started on your home buying journey.