The Arizona Purchase Contract – For the Faint of Heart

Many buyers, especially first time homebuyers can get very uptight about buying a home, indeed, both buying and selling a home is stressful. I’ve heard it said that the degree of stress that buyers and sellers go through during the home buying/selling process is akin to the stress of losing a spouse. Now, that doesn’t mean that the two are related in terms of importance, but only how the human body metabolically responds to the stress.

Well, we can’t prevent clients from not having stress, but I will say that Arizona’s purchase contracts, which are decades in its evolutionary process, go a long way toward alleviating the stress load and in fact may be the very best consumer-centric real estate contract in all 50 states. Having worked in California for 18 years and using their forms, and then coming to Arizona, there is no comparison in terms of “User Friendliness.” In California, for example, we were told we could not explain to clients what a given clause meant as that would be practicing law, for which we are not licensed. The problem was in the legalese, the lack of clarity.

In Arizona our forms are crafted to be understood. Every few years a large, select group of industry officials including brokers, lenders, contractors, termite and home inspectors, Department of Real Estate, lawyers, to name just a few, meet to see which clauses are working and which aren’t. As Realtors, we have the chance to give our two cents worth prior to the group meeting. Out-dated stuff gets tossed, new legislation gets integrated, and best practices are utilized. I sadly contend that if a consumer will take one to two hours to carefully read our contracts, they might know as much (or more) than their agent about the agreement.

Perhaps the greatest tool in the hands of buyers, sellers, and Realtors, is the “Buyer Advisory” put out by the Arizona Association of Realtors. This contains links to virtually every aspect of house buying in Arizona. To view this form, go to:  http://www.aaronline.com/wp-content/uploads/sample-forms/BuyerAdvisory.pdf

 On top of the Buyer Advisory, we have our

“10 day Due Diligence”

period (aka inspection period). This is one of the most critical and valuable parts of the home buying process. For buyers, it’s the best opportunity to find out pretty much everything there is to know about the home they’re buying. If a buyer, in their 10 Day Due Diligence, determine there is something that they don’t like, they can withdraw from the agreement without forfeiture of deposit. Does the request need to be reasonable? Used to, but now it’s strictly up to the subjective opinion of the buyer. This takes the pressure off.

But what about the seller, how does it benefit them? It greatly benefits the seller. I feel it goes a long way to reducing ye old “Buyer Remorse.” If buyer, seller, Realtor all understand that the buyer pretty much has a ten day “free look” then once the buyer has gone past this period, they are “locked” into the deal with the exception of a financing contingency. If they back out during the first 10 days, it’s only 10 days, and then we can get the property back on the market. This means that following that 10 days, everyone can pretty much expect smooth sailing to closing.

(…and if you’ll buy that…)

Odds n’ Ends Phoenix Metro Market Update

 

TEMPE RANKS AS ONE OF THE BEST COLLEGE TOWNS for students and permanent residents alike, based in part on:

  • Livability
  • jobs
  • housing affordability
  • availability of rental units
  • walkability

The ranking was completed by www.livability.com, which states that Tempe offers a big city experience while still maintaining a small town feel. The study further noted that Tempe has a diverse economy, major university, vast shopping opportunities, excellent recreation facilities, great local transportation, including a good “walk Score,” warm sunny days and, I will add, PAC 12 ASU Sun Devil football and basketball.

PENT UP DEMAND FOR ACTIVE ADULT COMMUNITIES?  Homebuilder confidence in the market for homes aimed at buyers over the age of 55 rose in the second quarter – its highest 2nd quarter reading in 6 years. According to the National Association of Builders chief economist, David Crowe, “The slow but steady increase in existing home sales” is one of the factors of this optimism.

As more and more of the over-55 crowd is able to sell their homes for better prices, many are looking to the active adult communities for their next move.

IT’S ALL ABOUT THE KITCHEN STUPID!  What ranks as the most important feature for buyers considering a “new” home? Well no surprise here, but according to the PulteGroup Home Index Survey, 30% of Americans say they consider the kitchen to be the most important area when choosing a new home. And considering the phenomenal popularity of cable TV home and cooking shows in the past 5 years, it looks like this trend will only move upwards.

Surprising to me anyway, is that the master bedroom is ranked the 2nd area of importance by 22% of the new home buyers. In personal experience of showing buyers homes, the “Great Room” seemed to be almost as important as the kitchen.

HOMEOWNERSHIP DECLINING  The U.S. homeownership rate declined for the ninth year in a row in 2012-2013 according to the Joint Center for Housing Studies of Harvard University. The number of homeowner households also fell for the 7th straight year with a drop of 76,000. Homeownership rates, per the study, for ages 25-54 are at their lowest rates since 1976.

These declines are the smallest reported since 2008 suggesting that the bottom may be in sight. Without question, our great recession, spurred on by the housing debacle of 2007-2009, was the main culprit as more folks lost homes or walked away and turned toward renting or living with relatives. As the numbers turn, homeownership will again head upwards in a big way.

Sell Like a Super Hero

Sell Like a Super Hero

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