Anyone selling a home in North Scottsdale these days expects a parade of willing buyers to throw money and other benefit at them. If you’re one of them, what can win the homebuyers’ lottery for you?
First of all, get over the idea that the asking price is always the asking price. It’s not.
According to a survey by Realtor.com, about a quarter of those lis0ing their homes for sale expect to get more than asking price. Slightly more than half of sellers think they’ll get asking price, and about 30% plan to ask for more than even they think the home is worth. A panic bidding war is what 16% think they’ll see.
There are some indications they are correct. The National Association of Realtors reports that nearly half of sellers got asking price or more. If fact, sellers are being advised to think of the list price like an auction reserve price: The amount you will not sell the house under.
So what are buyers doing to “win” the right to buy a home in Scottsdale these days? Well, lots of things, some of them crazy or financially dangerous. But haggling for a lower price and asking for extras are not among them, at least for desirable properties.
Here are a few examples:
You may not like it and it might not seem fair, but when many if not most buyers are upping the price, buyers who expect to get their offers accepted have to do the same. How much more over asking? If you want to stand out, offer more. Your Realtor should be able to tell you what similar properties sold for recently, which can be a guide. But those numbers tend to be available mostly for closed properties, which can take more than a month, and the trend could have changed in the interim. And in North Scottsdale, where properties tend to be more varied than in typical tract neighborhoods, those comparisons can be more difficult. Using a Realtor who knows the area you’re shopping is recommended.
Only about 10% of buyers in normal areas can afford to pay cash, and North Scottsdale is pricier than normal areas. Of course, with the exodus of California residents and the appeal of luxury housing these days, there may be more buyers with the means to do so, even if it means juggling assets. If you can’t afford that, it doesn’t help. But if you can, it can be a potent attraction in your offer.
More money is always nice, but often there are other pain points the seller wants to mitigate or opportunities to make your offer stand out. For example, a quick close might appeal to someone who’s buying another property or already vacated the one for sale. And a long close would be attractive to someone who isn’t quite ready to move yet. For the latter, an offer to lease the house back for several months – perhaps even for free – might be the deal-maker.
You could also offer to pay more or all of the expenses of the exchange, like the closings costs. That not only would reduce the expense to the seller, it would make the deal as clean as possible for them.
Higher down payment
Your earnest money deposit, or EMD, is an expression of true interest in the property, and signals the seller that you’re serious. Supposedly, that’s the money the potential buyer would lose by backing out of the deal without a good reason. (In normal times, there are multiple “escapes” from the deal that allow them to keep the EMD.) A higher earnest money deposit sends the signal to the seller that you’re a serious buyer. And if you don’t get the house, you get it all back anyway.
Make the offer clean and professional
I’ve seen offers with missing details, incorrect information, areas left blanks, missing signatures, and other headaches. This is really your Realtor’s responsibility, but a sloppy offer with missing details often goes to the bottom of the pile in a hot market. Don’t make them come back to you repeatedly, because they don’t have to these days.
Do you have to sell your house first? Do you lack a letter of approval from a qualified lender stating what number you qualify for? Is the offer contingent on some outside factor like a job offer? All these “if and only if” contingencies make your offer less sure, which means less likely to be accepted, particularly when the competition is paying cash or doesn’t have them.
Tell them your story
This is a controversial tactic, but any edge in this market might help. Some buyers include with the offer an letter explaining who they are and why the house is perfect for them and why they love it. They may talk about their roots in the area or how the home fits their special need. Sellers might have an affinity for the home and like that it will be well cared-for. The caveat here is that a seller may be put off or feel pressured by it, or simply not accept it. It also must avoid any mention of something that might be considered discriminatory.
What not to do
Don’t ask the seller to include furniture, artwork, the backyard swing set or patio equipment and the like. Asking for minor repairs that wouldn’t cost much time or money to fix add unnecessary headaches for the seller and not very valuable spiffs for the buyer. One thing some buyers are doing that is NOT recommended is giving up the home inspection. You could overlook expensive problems, and it’s always best to know what you’re getting into. If you lose a bid to someone so desperate that they’ll buy without knowing what problems they’re inheriting without recourse, you might be better off.
Get a good Realtor and listen to her or him
Home deals these days turn on nuances, and these folks do this day in and day out while buyers and sellers may do it a half-dozen times in decades. Pay for good advice, and use it.