8 Ways to Buy a House in Today’s Arizona Real Estate Market

September 24, 2009 at 7:15 pm 5 comments

Arizona’s real estate market may never have been better than it is right now. Homes are selling quickly. First-time home buyers rush to buy a home before November 30. In today’s real estate market, it is interesting to note that home buyers have many options. In a normal market, traditional sales are where majority of the sales come from. However, in the current market, a buyer looking to purchase a home has many choices.

1. Traditional Sales: A homeowner who has gained enough equity in the home is selling the house. The transaction is simple and quick. The buyer and seller agree on the price and then negotiate the repairs. Average time of closing is one month to a month-and-a-half on a buyer borrowing money; two to three weeks for a cash buyer. This is the most preferred way of buying a home.

2. Lender-Owned Property: The seller is the bank. The bank sells the home for an average of 20 percent below market value to generate multiple offers. The bank continues to ask for highest and best offer from participants until the bank decides on the lucky winner. Bank sells”Buyer Beware” and ” property as-is with no repairs. Banks provide an addendum overriding previous contracts to satisfy their conditions. The Bank Rules” and “Buyer Beware”are the credos to remember in this game. Chances of you winning the house among, say, 10 other buyers in a blind auction format is low. Recommended for buyers who have time and money to do repairs and can handle going through multiple rejections from the banks.

3. Short-Sale: The seller is the homeowner, who is upside down on his home and needs a lender approval to sell the house. The sale is subject to the seller agreeing to the terms set by his lenders and the lenders approving the sale. Close of escrow could take two to five months depending on the banks, listing agent, lender negotiator, deficiencies, and other factors. Every short sale is custom sale. The condition of the house will vary from a move-in ready home to a home that is neglected and needs work to varying degrees. Short sale approvals have increased significantly since last year. Recommended for people who have time to wait before moving in.

4. Maricopa County Trustee Sale: Foreclosed homes are auctioned to the public. The majority of these take place at the Maricopa County Courthouse Steps on Jefferson Street in downtown Phoenix. There are three sessions per day except weekends at 10 a.m., 12 noon and 2 p.m. More than 500 homes are auctioned each day. Bidders must have $10,000 to bid. If you win the house, the remaining balance is payable in 24 hours. A hard money loan should be arranged a day before the sale. Homes on the auction list may be canceled or postponed 20 minutes prior to bidding. Many homes are NOT available to show and buyer pays off any liens attached to the home. Recommended for those who have the ability to secure a $10,000 cashiers check and are knowledgeable about the bidding process. Also, you must be able to arrange a hard money loan or have cash arranged or available and have time to do research on the property of interest. You also must be willing to bid on a property site-unseen.

5. HUD Homes
– HUD homes are government-acquired foreclosed homes whose original loan was an FHA loan. Bidding is done electronically and results are available online. Multiple bids are accepted until a certain deadline. Bidding dates are assigned on the HUD website. An inspection report is available online. Only $100 down payment is required on an FHA loan. The seller can pay up to 3 percent in buyer’s closing costs and a $1,000 bonus for a full-price offer. HUD homes are available only through HUD-certified brokers. Most HUD homes are in need of repairs and the inventory can be minimal in some areas. For more information go to http://www.mcbreo.com Recommended for those willing to do repairs and have little or no downpayment.

6. Privately-Run Auction: This type of auction is done usually at a hotel or convention center. Buyers outbid each other in an atmosphere that creates urgency and desire. The auction contract is designed to favor the auction company. Buyer is advised to bring a real estate agent with them to review the contract and research the recent comparable homes prior to bidding. The auction company requires $5,000 to $10,000 to bid and inspection is done prior to bidding. You can buy a house in less than a month in such an auction. Recommended for those who want to close on a home quickly and are willing to pay for inspection on a house that they are not sure of getting.

7. New Construction Homes: The builder is the seller and appoints a Real Estate Agent as their employee to process the transaction with the buyer. The employee works for the builder and has the builder’s interests in mind. Prospective buyers are advised to consult with a buyer’s real estate agent to review the contract, terms and research recent comparable sales. New construction homes provide a variety of options in terms of features and upgrades that are considered in the pricing. For that reason, final purchase price tend to be significantly higher than the advertised price. You may purchase a “spec home” that is ready to move in, or a home that will be built to fit your needs. Buyer chooses the color, upgrades, minor changes to the layout and other additions. Recommended for those who want to close quickly and don’t mind paying more for a brand new house — and also don’t mind spending additional money for landscaping, fencing, window treatments, etc.

8. FSBO – For Sale By Owner, as the name implies, are homes being sold by a homeowner to avoid paying a 3 percent commission to a Realtor. Statistics show that 85 percent of FSBOs eventually end up listing with an agent because they cannot sell the house themselves. Some FSBOs cooperate with buyers’ Realtors; others don’t. Buyers are advised to seek expert legal or real estate help to review the contract when entering into an agreement with a FSBO seller. Most FSBO homes are well-kept and clean, but can be priced above market value. Recommended for those who are willing to be unrepresented in the real estate sale and those who know enough about real estate transactions.

*Consider your needs, priorities and wants in determining which of these options will work best for you as a potential home buyer.
Maria Gonzales Hass is a licensed full-time Realtor with Realty Executives. She has great knowledge in any of these types of buying options. For more information, you may contact her at (480) 650.0075.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , , .

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5 Comments Add your own

  • 1. Tony Cartman  |  October 5, 2009 at 9:45 am

    In fact, as you said, there’s a plenty ways to buy a real estate market. The foreclosure homes are available and you can make offers to get a good deal

    Reply
  • 2. reokid  |  October 25, 2009 at 9:40 pm

    Thanks for all the information you provide.
    In Tucson the reo market has become extremely competitive. I have found that hud homes offer an alternative source of reo inventories that buyers have a level playing field when they bid.
    http://www.tucsonbankrepos.com

    Reply
  • 3. talonecl  |  April 6, 2010 at 8:39 pm

    Purchase or selling of a place requires a real estate agent to help the people to strike the right deal and meet the right conditions that need s to be met. Real estate agent is the one who connects the sellers to the buyers and help them in all possible aspects to buy or sell the place. One should be careful in selecting the right agent.

    Reply
  • 4. talonecl  |  April 6, 2010 at 8:44 pm

    There are several agents in the market not all are same, no 2 individuals can be same that is for sure. Agents have different ways of working; some are argumentative, some are highly repudiated, some are harsh and pushy.

    Reply
    • 5. arizonabargainhomes  |  April 7, 2010 at 9:47 am

      I agree. Every Realtor is different. The difference can make a difference on how the transaction will end. It’s always wise to find a knowledgeable and professional Realtor.

      Reply

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