If you are thinking of purchasing a Phoenix are foreclosure there are a few things you need to keep in mind:
- The list price is a starting point
- You need to move quick
- Cash is king
- Don’t expect it to go quick
- The buyer’s market you heard so much about, is over at least for now
- When selecting a buyer’s agent make sure they have worked foreclosures
- Be patient, don’t force it
The Phoenix foreclosure market has changed drastically over the last two months. Two months ago you would give your agent your criteria and they could pull up dozen’s, if not hundreds of listings that matched what you were looking for. Today, if that list is a handful it’s good.
As of 6:42am on 5/20/2009 5,437 active foreclosure listings in the central Arizona MLS. That may sound like a lot, but it is a fraction of what it was a couple months ago. What that means for you today is if you see one you like, be ready to get aggressive.
One of our agents had an investor look at a house in South Phoenix a little over a week ago that was on the market for $39,900. After looking at the property both the agent and the investor thought the home was worth closer to $60,000, not $39,900. After running some comparables, their suspicions were confirmed.
Using techniques we teach our buyers agents the investor put in a bid at $39,900 and used language to ensure they would get the property if it did not go over $60,000. They were able to win the house by outbidding the highest bidder and landing the deal for $56,000. Did they overbid for the house? Not when you consider the actual value was close to $60,000. The list price of $39,900 was irrelevant and just a tool the banks used to get it sold quickly.
If you are thinking of putting an offer in on a house you need to act quickly. This weekend we got a call from a new buyer who was interested in looking at some properties. She gave our buyers agent a list of 11 she wanted to see and set an appointment for 9am on Wednesday. The agent warned her they may not still be available, but the new buyer did not seem concerned. The agent called for availability on those 11 Tuesday, and 8 of the 11 had already been awarded to buyers.
Just because the houses are going quick does not meant the process will go that quick. Banks are taking their time, partially because they are overwhelmed by the amount of work they have. When you consider all the factors that are going on in this market now one thing you really need to consider is how much experience does your agent have working in today’s market. Do they know how to get the most information possible from the sellers agent that will help you secure the home? Make sure you are picking an agent that has been in the trenches for the last few months and has seen the market change and can educate you.
One last thought, if you do not see the home you want, don’t force it. Wait, there is a good chance this market will be turning around again shortly. We recently wrote about how the market may seem to be at a bottom, but a new bottom may be around the corner. If you don’t see the deal right now you want just be patient.
