Back in January 2020, married couple Mindy and Alicia decided to upgrade from their Phoenix, Arizona, starter home to find their dream home – that is, until the coronavirus threw their plans for a loop.
The pandemic has made many real estate markets more competitive than ever, and Phoenix, Arizona, is no exception.
According to November 2020 market statistics, Phoenix home sales are up 27.4% from 2019, while total inventory is down 28.2%. Currently, there’s only 1.4 months of available housing inventory.
What does that mean for buyers? With sales up and inventory down, home prices are skyrocketing, and the market is rife with competitive, multiple-offer situations.
In fact in November 2020, median listing prices were up 10% from 2019, and the average median sale price (i.e. what the home actually sells for) was up a whopping +16.8%.
“Half the sales are closing above listing price,” explains top Phoenix real estate agent Justin Schlegel, who works with 66% more single-family homes than the average Phoenix agent.
Plus, homes are flying off the shelves (so to speak) quicker than ever: In 2019, homes spent an average of 58 days on the market; in 2020, homes spent an average of just 41 days on the market.
Of course, all of this is great for sellers, who are fielding multiple offers and are able to choose the cream of the buyer crop. For buyers, the tight real estate market in Phoenix spells stress, bidding wars, and inevitable disappointments.
Mindy and Alicia are no strangers to those frustrations. Here’s what happened when they bought and sold a home simultaneously during coronavirus.
Why they decided to buy and sell a home during coronavirus
Mindy and Alicia kicked off their home search in January 2020, a few months before the pandemic hit and shutdowns began.
At first, they just wanted to see what was out there, but they knew they couldn’t make any serious moves until they sold their current home.
The couple had purchased their starter home back in 2015, when it was just the two of them. Now, they’d added two adopted sons to their family, and they needed more space. The fact that they were buying during coronavirus was merely coincidental timing.
“We had been wanting a new house for some time, and we had reached out to our agent to run the numbers,” explains Mindy. “Then we decided to just go for it, and it happened to be during COVID.”
Mindy and Schlegel grew up together, and they had remained friends over the years. He helped the couple navigate their first home purchase, and he was enthusiastically on board for the upgrade.
“We had sat down in March and looked at where the market was,” Schlegel shares.
“Obviously, so many things were happening at that time. We were going to wait through the month of April, and then see what things looked like in May.”
But as April dragged on, the couple decided not to wait — they were ready for a change and willing to do whatever it took to make it happen.
Selling their starter home was a breeze
On April 21, Mindy and Alicia listed their starter home. With the market so competitive, selling was a breeze.
“Within two days, we had multiple offers and went under contract,” says Schlegel.
Unfortunately, buying a home under the same circumstances wasn’t going to be so easy.
The home search was stressful
“We looked at around 20 houses in person, and we were super stressed,” Mindy admits. “We had even put in an offer on one that we never even walked through.”
In that case, the seller — being cautious about coronavirus — would only allow Schlegel to do a walk-through while the couple watched on via a video call. Ultimately, that home didn’t work out.
Schlegel notes that sellers’ coronavirus rules varied widely based on their own personal level of comfort with strangers coming into the home.
“Some people require you to use hand sanitizer when you walk in the door. Some people even had a can of Lysol that you had to carry around and spray a door handle if you touched it,” Schlegel reveals. “Some people wanted you to wear gloves, some people wanted you to wear masks, or take your shoes off, or wear booties.”
Ultimately, the couple was able to navigate their home search safely, and they put offers on three houses. They had two disappointments, losing out to their competition, but the third time was a charm!
Finding a hidden gem
After a wild ride of a home search, Mindy and Alicia discovered a unique opportunity — a listing that was under-marketed, and therefore had less competition.
The single-story house — located in the Terramar community in Phoenix’s North Peoria neighborhood — had two bedrooms, two bathrooms, an RV gate, a fireplace, and a swimming pool.
“It was a home that I think we got pretty fortunate on because it’s one of those situations where the marketing of it by the listing agent was not very good,” Schlegel explains. As a result, the online listing didn’t get as much attention as it should have, “because underneath, it’s a really nice, fully loaded home.”
Because of the poor marketing, the home hung around on the market a little bit longer than comparable homes, and Mindy and Alicia were able to seize the opportunity and win their offer.
A winning offer strategy
In their previous two offers, Mindy and Alicia were beat out by the competition because of their home sale contingency.
Even though they were in the home stretch of their starter home’s sale — they’d already moved beyond inspection and appraisal — sellers were nervous about accepting their contingent offer.
“Because of the amount of offers and quality of offers out there, that’s what made it the most challenging,” Schlegel says.
They couple wasn’t taking any chances on losing their dream home. They decided to put in an offer for the full asking price — $418,000 — with 20% down from the proceeds of their starter home sale.
“There was one other person that put in an offer, but they accepted ours,” Mindy shares. “We wrote a letter to go with ours, talking about our family and how this home would be a good fit to raise our boys in.”
They think the personal touch of the letter helped their case. They won the bid.
Closing was a breeze
Mindy and Alicia lucked out on closing, and the process was a breeze. They only hit one minor snag.
The lender needed some last-minute documents “due to my wife being on a leave of absence from getting knee surgery from work, and her work not communicating that very well,” Mindy says.
According to Schlegel, not all of his clients were so lucky.
He remembers another client who was buying and selling simultaneously during coronavirus, only to find out that their buyer lost his job four days before closing on the sale.
“So my clients were in a moving truck across the street from the home they thought they were buying that day, so I had to call them and tell them that the whole thing blew up.” Schlegel recalls.
After that experience, his clients were so stressed that they decided to stay in their current home and put off selling it for another year or so.
Thankfully, Mindy and Alicia experienced no such shocking twist. They stayed the course and closed on their dream home on June 29, 2020.
“It took a few swings; we got beat out in a few multiple offer situations,” Schlegel admits. “But at the end of the day, I think we landed the right home for them, and it certainly fits their needs.”
They have no regrets, and Mindy says they wouldn’t do anything differently.
All’s well that ends well, indeed!
Header Image Source: (Kyle Kempt / Unsplash)
One couple kept losing bids during Phoenix, Arizona’s coronavirus-fueled real estate frenzy. Here’s the unique strategy they used to win their dream home.HomeLight Blog