FREQUENTLY ASKED QUESTIONS ON BUYING A HOME IN GREATER PHOENIX

My Buyers’ Most Frequently Asked Questions…Answered!

Navigating the complexities of buying a home in Metro Phoenix, even for seasoned buyers, can be a daunting task with numerous moving parts. As you juggle your personal and professional responsibilities, delving into the intricacies of a real estate transaction may seem overwhelming. Rest assured; you are not alone! Although each buyer’s journey is unique, in this article I will address the common concerns and questions most often shared by my clients in today’s ever-evolving real estate market.

Q:  How will I know that property value will increase in Greater Phoenix?

You can’t bring up real estate without someone using the word “crash” but that is just not reasonable to expect. Although there are no guarantees, there are clues and historical data that are indicative of future performance. Homes continue to increase in value in Greater Phoenix driven by low taxes, affordable living, and incredible job opportunities. In addition, Phoenix has earned the nickname the ”Silicon Desert” as many tech companies are migrating to every corner of the Valley and all those executives and employees need homes.

If you know an area is changing and is going to increase in density or desirability, you are likely to see an increase in value over time. I always tell my clients to not go on hearsay but look at projects that have successfully gone through the planning, development, and funding stages.

Being near an economic corridor is also a good indicator that your value will increase over time. The good news about the Phoenix market (throughout Maricopa and Pinal counties) in general is that our population is increasing, our unemployment is low, and our economy is booming.  That is a recipe for an increase in value overtime.

Despite the general trend, you still need to buy smart—each neighborhood, block and/or building can be different and it’s important to make sure you don’t overpay. You “make money when you buy, not when you sell” is an old real estate adage that simply means you must first “buy right.”

Q:  Should I put a deadline on an offer?

The decision to put a deadline on your offer depends on various factors, including market conditions, property demand, and the seller’s circumstances. Working closely with a knowledgeable real estate agent is essential to receive valuable insights and make the best decision aligning with your specific goals, the seller’s goals, and the dynamics of the current real estate market.

In competitive markets and neighborhoods, sellers often prefer to give their home full market exposure to get the highest price possible. They might set a deadline to present all offers at once if there’s a likelihood of multiple offers.

If you anticipate competing with other offers, get creative and consider making yours the most appealing. Offering a higher price than asking and favorable terms, such as shorter contingency periods, could entice the seller to take their home off the market.

On the other hand, if multiple offers are not expected, a quicker deadline might be a strategic move. Ensure the deadline allows enough time for the seller to respond but not too long for another offer to come in. In general, setting a deadline of 8-12 working hours can often be effective in avoiding a bidding war.

Remember, each real estate transaction is unique, and customizing your approach to each situation can increase your chances of securing the property you desire.

Q: Is it worth it to find something faster when interest rates are low?

No!  Don’t let interest rates dictate your time to buy a home.  In the Greater Phoenix area, we are still in a period of historically low interest rates.

A slight increase in your interest rate is not going to make the home you want unaffordable.  And, just like buying and selling other investments, such as stock, timing the market is never a good idea. 

Buy and sell when the time is right for you. Speak with an expert about perhaps which month is best, but always go based on your own timeline and schedule. One thing we know for sure—there will always be homes to buy. And, when interest rates go up, it often leads to a slight cooling of prices.

Q:  How do I get a good deal When Buying in Greater Phoenix?

To ensure you are getting a good deal, it’s crucial to examine the specific neighborhood where you are buying and compare your prospective home to recent sales within the last six months to a year. Prices can vary based on location (e.g., homes backing up to major roads may sell for less) and condition (recently renovated homes may sell for more). By comparing the home you wish to purchase with recent sales, you can avoid overpaying.

Additionally, it’s essential to gather information from your agent regarding whether it’s a sellers’ market or a buyers’ market. This knowledge will help you craft your offer accordingly. If a home has been on the market for a while, there might be more room for negotiation, potentially leading to a lower price.

However, it’s essential to remember that just because something appears “cheap,” it doesn’t necessarily mean it’s a good deal. Avoid making this crucial mistake by thoroughly analyzing all relevant factors before making your offer.

Q:  If the house I want is $20k over my price range, does that mean I can’t afford it?

I advise my clients to focus not only on the purchase price but also on their monthly payments. By taking this approach, you can determine what you’re comfortable paying for your new home on a monthly basis.

Rather than fixating on a specific price point, set your sights on the monthly amount you’d like to spend, for example, $2,500. By doing so, you’ll have a better understanding of what you can afford and what fits within your budget.

Keep in mind that when interest rates are 6.5% for every $10,000 change in price, your monthly payment typically increases by only about $65. Looking at it this way, you might find that you can comfortably afford the home of your dreams or that enchanting home you fell in love with, even if it has a slightly higher price tag.

For instance, an additional $20,000 might translate to just an extra $130 per month. The key is to evaluate whether this increase is manageable for you and won’t strain your finances or disrupt your lifestyle.

On the flip side, opting for a less expensive home might seem tempting, but you may end up spending more on repairs and maintenance.

In addition, consider how property taxes and HOA fees affect the bottom line on your monthly payment. For example, with lower taxes or no HOA fee included in the monthly payment, your overall purchase price can increase.

Let me assist you in considering the pros and cons of each situation to help you make an informed decision that aligns perfectly with your financial goals.

Feel free to reach out to me with any questions not covered here; I am passionate about my profession and am eager to be your Greater Phoenix real estate resource. Together, let’s begin this journey and ensure your home-buying experience is both informed and successful.