Time is right for Valley homebuyers to get concessions from sellers, expert says
Oct 19, 2022, 10:04 AM | Updated: 10:05 am
(File Photo by Justin Sullivan/Getty Images)
PHOENIX – As 2022 moves into its final months, it could be the best time of year for Valley homebuyers to get concessions from sellers, according to a local real estate expert.
“The fourth quarter of any year, seasonally for Greater Phoenix, regardless of the market, is the best time for buyers, frankly, because many sellers want to sell before the end of the year. It tends to be the slowest time anyway,” Tina Tamboer of the Cromford Report, a service that tracks the Valley’s residential market, told KTAR News 92.3 FM’s Arizona’s Morning News on Wednesday.
“Come the spring is when our buyer season comes in, so this is the time for buyers to negotiate with sellers.”
New Phoenix-area homeowners face more than $116,000 in first-year costs on a median-valued home, based on a 20% down payment and a mortgage with a 6% interest rate, according a September study by SmartAsset.
But Tamboer said potential buyers shouldn’t be intimidated by that figure.
“As a buyer, it’s real important these days to get extremely educated on all of your options in terms of buying a home,” she said. “There is a lot of help out there, and a lot of sellers are very willing to help buyers get into their home.”
Many deals can close with as little as 3% down, which would significantly lower the initial expense. Tamboer also said there are ways to reduce the interest due over the first year, even with rates now up to around 7%.
“Many sellers these days are engaging in rate buydowns for buyers. So, it’s really important for buyers to understand that a seller may be offering incentives that could lower that first-year mortgage rate essentially by 2%,” she said.
And unlike when housing was red hot in recent years, buyers are now more willing to cover closing costs in the current local market.
“You’re looking at about 42% of sales through the MLS [Multiple Listing Service] are including seller-paid closing costs, and some areas of the Valley that 70-80% of sales will involve a concession by the seller,” Tamboer said.
Sellers, meanwhile, need to understand that the market is not what it once was, Tamboer said.
“Sellers need to be very realistic about the timeframe it’s going take to sell their home, that many offers are going be coming in with requests for closing cost assistance, with requests for repairs,” she said.
“The days of getting offers over asking price, waiving appraisals, those days are well over now.”