Phoenix real estate goes old school
As the Phoenix market continues its transition from a "balanced" state towards one that favors prospective homebuyers, some forgotten terms have returned to the real estate lexicon.
"Concession" and "contingent" are the most prominent reentries.
"Contingent" is an offer placed on a home by a buyer that is conditional upon the sale of their own home, while "concession" refers to a request (or requests) granted by a seller to a buyer in order to facilitate a real estate transaction.
Both have been rare inclusions in real estate contracts in recent years, according to Phoenix real estate expert Tina Tamboer.
"We're starting to hear stories about contigent offers, which is something we haven't really (seen much of) in 10 years," Tamboer told That Real Estate Show. "So, when you think about it, there are going to be a lot of these old school tactics that might be coming into play in the next few months."
Old school also applies to home seller "concessions," which haven't been necessary in recent years, due to Phoenix's low home inventory situation.
"The seller's advantage has pretty much dwindled away," said Tamboer. "Our entire market right now is in balance, so basically what that means for sellers is that (they) may want to consider those seller concessions again."
Some common seller concessions include monetary contributions to help cover closing costs, appraisal/inspection fees and/or home warranties. More unusual examples would be upgrade allowances or purchasing furniture or appliances for the new home. All of these examples, however, would depend on the individual seller's motivation and circumstances, as well as the condition of their home. Still, there's evidence that some sellers in Phoenix are finding creative ways to set their home apart and get the deal done.
"Sellers are getting aggressive," said Tamboer, who recounted a recent story of a buyer asking for and receiving the installation of a new garage from a seller.
These types of stories may increase, as Phoenix's real estate market becomes one that favors buyers. According to Tamboer, the cities of Tempe and Queen Creek already fit that classification, and Anthem, Peoria and Gilbert could become buyer's markets very soon.
In other words, if you're getting ready to move, you may also want to get ready to negotiate.
Rod Lakin, That Real Estate Show