“We’re not saying you can’t own guns. We’re not even saying you can’t carry a gun. We’re just saying you can’t carry a gun in town.”
– Sam Elliott as Virgil Earp, Tombstone
Look, I’m not saying you have to write your first offer on a home in the Phoenix market at around 10 percent of list price, assuming it’s priced at market value. I’m not saying you even have to write an offer on a home here at all. All I’m saying is if we’re going to work together, we need to be on the same page as far as strategy.
Last night, one of my prospective buyers and I parted ways before ever looking at a home here in the Valley. Why? Because we couldn’t come to an agreement on the state of the market and developing a strategy that matched both his needs and the realities of our real estate market.
Let’s take a look at two retirement communities in the West Valley, Sun City Grand and Pebblecreek. I ran the data for both and the numbers come out more or less the same:
In Sun City Grand, the lowest list-to sales price percentage for the 389 sales was 78.93%. Of those 389, all but 47 were sold for at least 90% of the final list price and more than half – 206 of the 389 – sold for at least 95% of the final list price.
In Pebblecreek, there 97 sales, only one below 80 percent of final list price and 77 of the 97 at 90 percent of list price and above.
So yes, if you really are so inclined, start the offer even lower than the 10 percent figure that seems to work so well in the off chance the seller wants to give their home away. But just don’t base your buying decision on finding a one-percenter – you’re almost certainly going to come away empty-handed.
Which is all well and good if you want to pay a retainer for the gasoline and time needed to help you view homes you’ll never purchase. Because, believe it or not, this is a business.
Extended timelines are fine, as some clients I’ve worked with for multiple years can attest. But unrealistic expectations are a completely different issue. Not believing me when I provide advice is one thing; also ignoring the hard data in favor of anecdotal stories from the cocktail party crowd is lunacy.
There’s one line from last night’s conversation that sticks with me. This buyer mentioned he knows the game because he’s purchased five homes in his time.
That’s honestly two more than I’ve personally purchased. But it’s also equal to the number of homes I currently have in escrow right now – now multiply that by six years in the biz.
It’s my experience that allows me to make my recommendations with confidence. You don’t have to follow them. But without some sort of middle ground and common strategy, there’s not much reason for us to work together.
[tags]Phoenix real estate[/tags]