Phoenix Real Estate Price Wars

I was recently involved in a real estate transaction in Phoenix, thank the Lord, that I feel bears repeating because there are lessons to be learnt for both buyers and sellers in this difficult market.

The subject was an entry-level home in Phoenix that had just been reduced from $229,000 to $219,000. It had been empty for about a year, but the sellers were long time owners (over 20 years) so they were not in distress. However, they felt the home was priced right, given the vagaries of the market in the Valley of the Sun, and they were probably correct. Plus it had a remodeled kitchen and an impressive 4-car garage, which was an absolute boon to my client, who I represented as a buyers agent. He wanted the property, because of the garage, and was willing to pay full price. We started at $212,000 which is an amount that is respectfully close to asking and not insulting in any way. The Lister had told me in light of the reduction they would probably not go lower than the asking at this point. Whilst she was at the owners' home presenting the offer, she called me to say, "if you re-wrote the offer at $215,000 today, they would sign it, as they are going on vacation in the morning, and did not want to mess around with a counter-offer. If not they would counter back at $219,000." Verbal negotiations are not valid, all offers must be reduced to writing, so I said "Do what you have to do." Remember, they had already indicated they would accept $215,000 so their $219,000 counter could be countered back by a $215,000 counter from my client if needed. Why the rush? Two hours later, they accepted the $212,000 without any counter. Why? Well, buyers have a lot of choices these days, so if a well qualified one comes along it is important to take them seriously. In this case our offer was close enough that they could "smell it".

Too many people start way too low then the seller feels insulted and takes it personally. In fact, it is a business transaction but both buyers and sellers can get over-emotional because we are dealing with their home, with all the hopes and memories that that can contain.

I also try to dissuade clients from annotating offers with language like "final offer" or "firm". They are combative terms and I find them to be petulant. Be
business like in negotiations and allow people to keep face and respect. It will turn out better in the long run, and you will feel better, too.

I also avoid advertising homes as "with instant equity" or "tens of thousands below appraisal". Seriously, does anyone buy into that nonsense? It always reminds me of T.V. ads from jewelers who guarantee "our items will appraise at twice our price". Good, will you buy them back from me then? I could make a tidy living popping in and out of jewelry stores all day.

The truth is that, in the cooling market that is Phoenix real estate at the moment, correct pricing will help you find the few real buyers that are out there. Negotiating fairly and with respect will help you close the deal, and keep that buyer. And, of course, your integrity.