I have been looking for a single family property around Phoenix for the past few months now and put several offers down on a few different properties. I am working on a tighter budget with homes from 250-300k, how can I compete in this market with such a budget?
I have mostly looked east of Central Ave and South of Indian School Road and I work downtown.
There are probably posts on here about how to make strong offers, but one thought might be to offer the seller a free 30 days lease back. That gives them time to get their money and go buy the next house....without pressure to move...and without the risk you can't close. Typically if you close at the end of the month, you have about a month before your first payment is due, and maybe you have time to wrap up your lease if you are currently leasing.
I have a client now who did get the 30 day lease back and they're still in panic mode after living there for 30-40 years. Not ever seller will value this, but when they think about it some might...and for some it will be a big relief.
When I was thinking of buying in Bay area 20 years ago and there might be 70 offers on a property, people got real creative with what they did to woo sellers...flowers, wine, airline tickets, vacation stays, etc. Maybe you can do that at no out of pocket to you. Could you transfer them frequent flyer miles in your account for airline tickets, or if you own a time share, give them a week vacation, or if you have some skill, provide that for them. Do you have friends or family that could add to this....maybe you have a side Wine Tasting Seminar business or DJ business or construction or whatever side you have that you could throw in as a bonus to them. Something that would make your offer get attention.
Best wishes and good luck.
Could you go after sellers in the neighborhoods you like directly. Hi I'm Evan....me and my wife, kids, dog....whatever want to live in your neighborhood. If you're thinking of moving this year, let me save you money by selling your house to me directly....blah blah blah...we want to raise our kids in this area, we like the schools, I work at X, I like the parks,...blah blah blah....
Door walk those with a $1 in them to all the homes in the area you want to live. When you're doing this talk to everyone outside and ask them if they know anyone moving or if they know of any vacant houses. You might also make offers on houses for rent. Maybe you catch the right landlord that wants to sell or would consider selling.
Thanks for the advice! Thats actually the first time I have heard about getting creative with the offer! I will definitely keep that in mind going forward.
@Evan Anderson Be sure your agent has you set up on a Coming Soon MLS search for your target area and property features. In the Arizona Regional Multiple Listing Service (ARMLS), agents can list homes as Coming Soon and these homes usually can be shown while in this status and offers can be written. The advantage is that Coming Soon listings do not appear on Zillow or any of the other RE websites. So you can get a jump on listings before they hit the open market.
Also, my buyer clients have been successful by making "clean" offers. Don't ask for any seller concessions, including a home warranty. You can always buy your own. And before you craft your offer, have your agent reach out to the listing agent to find out what is important to the sellers so you can be sure you address that in your terms.
Make your offer as early--and as frictionless--as possible.
@Evan Anderson keep plugging away, you get one eventually.
Try to make your terms more appealing, shortening up the inspection period is one way. Also, write a letter to the seller, to submit with your offer. Pulling on someone's heart strings sometimes makes a difference in their decision.
@Evan Anderson waive inspection period, waive appraisal contingency, put down more earnest money, make your earnest money non refundable (aka hard), close quicker (or longer) depending on which is preferable to the seller. Have your agent explain the risks/benefits of options #1, #2, and #4 before employing those strategies.
You're competing against cash offers and financed offers that might be putting more money down, so you need to be hyper competitive with your offer. Sometimes that means taking risks that you otherwise wouldn't if this were a buyer's market.
@Evan Anderson if you haven’t considered it, I would advise you to go off market. A decent realtor will have connections with local wholesalers. The general public is not competing on these deals and the pool is much smaller. I get about 20-30 deals a day emailed to me from my network of wholesalers.
@Melanie Johnston Hi Melanie, Im a new Investor in AZ. My first Flip is in Tempe and it's almost complete. We're planning on putting on the market after the first of the year. Do you think it would be a good idea for me to list it as coming soon now and are there any rules about how early you can do that?
Hi @Mike Cordova . Yes, the MLS says you can be in Coming Soon status for 30 days. On the 31st day your listing will automatically go ACTIVE. In fact, here are the exact rules, as outlined in our MLS Rules and Regulations. Maybe this will help:
- (a) Listings entered into this status must have a current executed Listing Agreement.
- (b) Listings may be in Coming Soon Status for a maximum of 30 days. (i) If the Listing is left in Coming Soon Status for the full 30 days, it will automatically be placed into active status on the 31st day.
- (ii) A Coming Soon Listing that has subsequently moved to any other status is ineligible to be placed back into a Coming Soon status.
- (iii) A Premises may only be in a Coming Soon Status for 30 of every 45 calendar days.
- (c) Section 8.24 Photo Requirements shall not apply to Listings while in a Coming Soon Status. However, if photos are included with a Coming Soon listing, the photos must comply with photo use rules.
Let me know if this sparks any other questions or if I can help in any way!
@Melanie Johnston Thank you so much! that's super helpful.