Real Estate

WHAT IS AN IBUYER AND SHOULD YOU USE ONE?

By Chad Arend, Realtor

Simply put, the term iBuyer is Opendoor OfferPad used to group companies that will submit an immediate offer on Homes Purchased in July 2019 364 86 your home using automated techniques Homes Purchased in July 2018 295 98 available online. Companies in this category are most known as Opendoor, Annual Change in purchases 24% -12% Offerpad and Zillow, including vari- Homes Sold in June 2019 350 71 ous others. The rise in occurrence has Homes Sold in June 2018 245 104 certainly been noticeable within the industry in the past two to three years, Annual Change in Sales 43% -32% since the market favors sellers to the Median Purchase Price in July 2019 $234,950 $244,024 greatest degree since August 2005. Median Purchase Price in July 2018 $238,900 $229,412 “We can see significant growth in Median Sale Price in July 2019 $250,000 $249,900 iBuyer activity compared to this time last year, a 25% increase in purchases Median Sale Price in July 2018 $255,000 $241,500 and a 51% rise in sales. In recent Homes in Inventory at the End of July 1,004 445 months, Opendoor has consolidated its position as the dominant player while OfferPad and Zillow have experienced If you’re considering selling your seller doesn’t have to show their home little change in volume since the be- home, should you consider selling to to multiple buyers and can usually ginning of 2019,” says Ryan Sams of an iBuyer? Perhaps. The advantage to pick the closing timeframe. Empire West Title. an iBuyer is typically convenience. A

Chad Arend - Realtor Neighborhood Specialist Chad Arend - Realtor Neighborhood Specialist Chad Arend - Realtor Neighborhood Specialist That being said, you should be very aware of how much your home could “retail” for and understand the net amount you would receive for your home in all scenarios. I spoke to four different sellers that recently sold their home to either Zillow, Offerpad or Opendoor. Here is how they each broke down…

SELLER #1

Approx. value = $267,000

Listed for $275,000 with good activity but needed to sell quickly. Accepted an offer from Offerpad for $253,000 with 6% fee and $4,000 in repairs.

We have the experienced team to handle the complicated We have the experienced team to handle the buying process of short sales, lender owned homes and complicated buying process of short sales, lender investor flips. We strive to make sure how clients are happy with our service every step of the way, from initial marketing meeting, to after closing. We promise you won’t be disappointed. • Local market knowledgeable • 14 years full time real estate experience We have the experienced team to handle the complicated buying process of short sales, lender owned homes and investor flips. We strive to make sure how clients are happy with our service every step of the way, from initial marketing meeting, to after closing. We promise you won’t be disappointed. owned homes and investor flips. We strive to make sure how clients are happy with our service every step of the way, from initial marketing meeting, to after closing. We promise you won’t be disappointed. • Local market knowledgeable • 14 years full time real estate experience • Excellent follow up skills Chad Arend Realtor Direct: 602-740-2074 Email: Chad@TheArendTeam.com www.TheArendTeam.com Chad Arend Realtor Direct: 602-740-2074 Email: • Excellent follow up skills • Aggressive negotiation tactics • Extensive marketing campaigns • Local market knowledgeable • 14 years full time real estate experience • Aggressive negotiation tactics • Extensive marketing campaigns • Large client base with multiple referral channels • Community & Neighborhood involvement Office: 21630 N 19th Ave Ste B8 Phoenix, AZ 85027 Chad@TheArendTeam.com www.TheArendTeam.com Chad Arend • • Large client base with multiple referral channelsExcellent follow up skills 16 • October 2019Office 21630 N 19th Ave Ste B8 Phoenix, AZ 85027 Realtor Direct: 602-740-2074 Email: • DEER VALLEY TIMES • Community & Neighborhood involvement• Aggressive negotiation tactics • Extensive marketing campaigns Chad@TheArendTeam.com www.TheArendTeam.com • Large client base with multiple referral channels Community & Neighborhood involvement Netted $233,000 for their home or 88% of retail value.

SELLER #2

Approx. value = $565,000

Listed for $569,000 and accepted an offer from Zillow at $562,000 with 5.5% in concessions and $1,500 in repair credit.

Netted $535,000 for their home or 94% of retail value.

Zillow

78 31 152% 114 6 1800% $275,700 $320,000 $298,875 $259.450 351

All iBuyers Combined

529 424 25% 535 355 51% $242,350 $240,250 $255,000 $252,500 1,800

SELLER #3

Approx. value = $275,000

Never listed, accepted $260,000 with 6% concessions and $1,500 repair credit.

Netted $242,900 for the home or 88% of retail value.

SELLER #4

Approx. value = $330,000

Never listed, original offer of $315,000 from Offerpad. After inspection, Offerpad reduced offer to $297,000 due to “exterior paint” (which would have realistically cost $4,000!)

Net offer reduced to $280,000 after 6% concession or 85% of retail value.

On average, in these four cases, the seller received 89% of retail value for their home. Only one of the four cases essentially received a near-asking price offer compared to what they would could have received using a local agent. If you are considering selling your home, it is important to look at all aspects of the sales process including average retail price, offer price, commissions and concessions. All of these could greatly affect your net price and will allow you determine if the convenience fee is of value to you.

TOP FIVE REMODELING PROJECTS THAT ADD VALUE TO YOUR HOME

By Alan Anderson BATHROOM REMODEL

As homes in Northeast Phoenix, Scottsdale and your house and updates to this space could help the surrounding Valley continue to age, many you earn more money when selling. Look for homeowners are looking at ways to stay up- stand-alone tubs and high-end mirrors with intedated. Increasing your home’s property value in 2020 grated LED lighting to continue to stay popular effectively has a lot to do with understanding the val- in 2020. Other trends include rain shower heads, ues of the modern buyer. Square footage and location frameless shower enclosures and curbless showare key, but energy efficiency and high-end finishes in ers. Homeowners can look to recoup around 66 a low-maintenance home are especially important to percent. the modern-day property buyer. Keep these top five

KITCHEN RENOVATION

Kitchens are usually the hub of the house and buyers are demanding upgraded finishes and designer touches. Look for two-tone kitchens (white with an accent of wood-stain color or accent painted finish) and more glamorous metal accents like copper, champagne bronze, glass and stone details. Depending on the scope of kitchen remodel, home owners can typically recoup costs as high as 73 percent.

ROOM ADDITION

Many homeowners are adding room additions to their homes, as it provides extra space and square footage. Look for trends in converting garages into a playroom and then building another garage, creating spa-like bathrooms and building a separate “snore” room for partners who snore. Homeowners can expect to recoup costs around 60 percent.

BACKYARD PATIO RENOVATION

Whether it’s a luxurious swimming pool and cabana, an open-air kitchen and dining area or a cozy fire pit for roasting marshmallows, you’ve likely dreamed of having one, if not all, of these amenities at your home. In 2020, we will continue to see more and more homeowners looking to include outdoor living – or better yet, a design that allows for a flowing indoor-outdoor living space – in their home design. And experts say homeowners will recoup about 59 percent of the costs. A brand new bathroom can help inspire offers on home renovations in mind as we approach 2020 and WET BAR ADDITION when it comes time to sell, you’ll be able have your A wet bar is exactly the kind of bell and whistle property hit the market with unmatched value. that many modern home buyers are looking for when they are shopping for a new home. Trending are wine coolers, ice makers, glass shelving that is

recessed into the wall and quartz countertops. Remodels that yield a good return on investment make sense as homes in the Valley continue to age. The point of a well-chosen, well-thought-out remodel is not only the comfort and beauty it will add to your lifestyle but also the value it will add to your home.

For 2020 and the coming decade, the key is to make sure your remodel is not only beautiful, but functional for years to come.

About Alan Anderson-Arlington Custom Builders:

Alan is co-owner of Arlington Custom Builders, along with his wife Brenda Southard. Together they have over 70 years of construction experience and have won numerous awards, including being recognized as one of the top remodeling contractors by Ranking AZ. The company specializes in custom home construction, kitchen and bathroom remodeling and Arizona room remodels.