It’s a sunny moment for anyone who needs to sell their house fast in The Valley. Cash home buyers in Phoenix are always seeking new investments in the metro area and would be remiss to neglect a city experiencing unparalleled growth. In addition, the city has become known as a hotspot for iBuyers, or tech-enabled companies that use automated valuation models to make instant offers on properties and provide an online home-selling experience.
Whether you’re downsizing to a retirement home in Papago Park or looking to escape the realities of Phoenix’s 100-degree Halloweens, scary scorpions, and small yards — you can likely get cash for Phoenix residence in short order. That would allow you to skip today’s average 7-plus week mortgage closing period and the hassles of leaving the comfort of your AC for showings.
Our guide provides an overview of the cash home buyers doing business in Phoenix, your responsibilities as the seller in the state of Arizona, and how to request a cash offer in the area from a Phoenix buyer.
We’ll cover the following:
Cash-buying landscape in Phoenix:
Selling to a Phoenix cash buyer:
Cash-buying landscape in Phoenix
The Phoenix real estate market draws investors with its consistent housing stock, strong employment base, and vacation-worthy weather. Here’s what to know about the cash buying real estate landscape in Phoenix.
Under $700k market attracts cash in Phoenix
Cash buyers in Phoenix will care less about if your home is a Spanish Mission, Pueblo Revival, or Ranch-style and instead are likely to focus on price point and location. Lisa Roberts, a seasoned real estate agent in the Scottsdale and Phoenix markets, is seeing a higher number of all-cash offers for properties priced under $700,000, and especially for homes under $450,000. “In the luxury market, as the price goes up, there are less buyers in general, which means less cash buyers, as well,” she explains.
Roberts is also seeing a bevy of investors who are involved in real estate investment trusts (REITs) coming in to scoop up lower-priced homes in the Phoenix area and surrounding communities like El Mirage, Chandler, Gilbert, and Mesa. “Generally, when the houses are under $500,000, we’re sure to see lots of cash buyers,” she says. The neighborhoods of Arcadia and Paradise Valley are also of particular interest to Phoenix investors, according to a forum on BiggerPockets.
Population boom fuels Phoenix housing demand
Phoenix is a popular place for buyers to invest their cash due in large part to healthy economic fundamentals and a booming population. U.S. Census Bureau population estimates show that Maricopa County expanded by 86,820 residents in the year preceding July 2020, a greater increase than any other U.S. county. The Phoenix-Mesa-Chandler area rose to 5.1 million people during the same period, making it the fastest-growing of the top 10 U.S. metros.
Carving a reputation as more than just a retirement destination, Phoenix continues to attract residents (and homebuyers) for its expanding job opportunities in tech, manufacturing, and bioscience. Home prices have risen in lockstep with the city’s ongoing improvements and jobs market; in Q2 2021, the median sales price for Maricopa County — where Phoenix is based — saw an annual 27% increase in median real estate sales prices, according to data from the Arizona Realtors MLS.
Landlord laws entice Phoenix cash buyers
Martin Boonzaayer, owner of a house-buying company in Phoenix and the surrounding area, points out that Arizona has historically been a “landlord-friendly” state. Traditionally if a tenant doesn’t pay rent, a landlord in Arizona can start an eviction action in a short amount of time. “This is in contrast to some other states, where the process of evicting a non-paying tenant can sometimes take in excess of six months or even a year,” he says.
Note: The CDC temporarily halted evictions nationwide for tenants who meet certain criteria, which expired on 7/31/21.
Phoenix is ‘ground zero’ for iBuying trend
When iBuyers (instant buyers) first came on the scene in the mid-2010s, Phoenix proved to be an attractive spot for their tech-focused approach to flipping houses. One report from ABC15 speaks to the homogeneous nature of Phoenix’s housing stock — not unlike the reliability of the region’s hot, dry weather — making it easier for companies digitizing the home-selling process to algorithmically value properties. Indeed, this particular type of cash buyer appreciates Phoenix’s relatively affordable housing and large number of new cookie-cutter developments, which satisfy their low-maintenance purchase criteria.
In 2019, iBuyers were claiming a slice of Phoenix real estate sales to the tune of a sizable 4%-5% market share, notes one analysis from Forbes. More recently, a severe post-COVID housing inventory drought has put pressure on real estate investor margins, chilling iBuyer activity. However, activity is expected to bounce back as supply improves, and Phoenix remains the No. 1 market for iBuyers. In Q4 2020, iBuyers accounted for 2.1% of homes sold in Phoenix compared to 1.9% in Raleigh and 1.6% in Atlanta.
International buyers scooping up Phoenix real estate
According to a 2020 report from the National Association of Realtors, U.S. real estate has historically piqued the interest of international buyers; prices in many U.S. metros are inexpensive compared to the central areas of some global cities. The same research shows that 39% of foreign buyers pay all-cash for homes, compared to 19% of all existing home buyers.
Phoenix’s sunny weather, jobs growth, and education opportunities collectively make it a particularly popular target for international buyers. In fact, 16% of international investors surveyed by the Association of Foreign Investors in Real Estate plan to increase their Phoenix real estate holdings in 2021. As such, the city ranks 6th among U.S. cities where foreign investors are increasing their real estate investments.
Selling your house for cash in Phoenix
You may be looking to sell your Phoenix property for a number of reasons. Perhaps you recently inherited a home you can’t afford to take care of, you’re going through a divorce, or the pandemic resulted in income loss that has put the cost of needed repairs out of reach. Alternatively, you could be looking for a non-traditional listing process, turned off by the prospect of opening up your home for viewings during a scorcher of an afternoon. In any event, here’s what you should know about working with cash buyers in Phoenix.
Issues common to Phoenix housing
If your home is affected by any of these issues known to affect Phoenix housing, you might have better luck going through a cash buyer who has the time and funds for immediate repairs, rather than a traditional buyer who is planning to live in the home right away and expects move-in-ready condition:
Phoenix has the dubious distinction of ranking No. 9 among the U.S. cities with the most termites. In the event of an infestation, a homeowner could end up spending around $3,000 to repair the damage, according to Orkin, a pest control company since 1901. A cash investor will be more likely to purchase a home with a termite problem, as they’ve likely dealt with pest problems in the past and have the knowledge and resources to resolve them.
Phoenix’s daily high temperatures regularly exceed 100°F every June, July, and August; and all of that heat can take a toll on the city’s housing stock. Some common signs of heat-related wear and tear include cracking, peeling, and discolored wood; bubbling or chipping paint; and damage to roofing shingles. A cash investor may be less averse to purchasing a home with these types of issues.
The expansive soil of the Southwest and Sonoran desert (which expands with water and shrinks with dryness) can put your Phoenix home at risk for foundation heave, which is when part of your foundation or slab floor moves upward while other sections remain stationary.
Foundation heave can result in a bowed effect and cause cracking of your inside walls among other side effects. One company estimates it sees 80% of homes with expansive soil experience some kind of foundation heave. While severe foundation issues may scare off traditional buyers, certain investors will be willing and able to take it on, though you should expect the offer you receive will reflect the cost of hefty repairs.
Timeline for a cash sale in Phoenix
The typical timeline for a cash sale in Arizona is about three weeks, according to Boonzaayer — speaking from his experiences with clients. But it can vary from deal to deal. Roberts adds:
“The closing timeline depends a lot on the seller’s situation. If they want a quick close and the title is free and clear, it can happen as fast as 10 days. But if we’re dealing with HOA disclosures and loan payoffs, it could take a few weeks.”
Disclosures and taxes for Phoenix cash transactions
The Arizona Association of Realtors has provided a Seller Disclosure form where a seller must indicate any previous or current issues with the home (although a cash buyer can choose to waive the seller’s requirement to disclose). The form is separated into six sections:
- Property and ownership
- Building and safety information
- Environmental information
- Sewer/wastewater treatment
- Other conditions and factors
Beyond the standard form, some Arizona sellers may have to provide some additional disclosures if the following criteria apply:
- The seller has filed insurance claims on the property within the last five years
- The home was built before 1978 and may have lead-based paint
- The home has a swimming pool that must be enclosed with an appropriate barrier
- Soil remediation has been performed on the property
- The property is located within the vicinity of a military airport
What’s nice is that Arizona is one of only 13 U.S. states that don’t have a state transfer fee or transfer tax on real estate, which can make selling even more appealing.
How much will Phoenix cash buyers pay?
In the current seller’s market, with less than a month of inventory available in Phoenix, Roberts says that many cash buyers are making offers at market rate or above, often sight unseen, no questions asked. “In a typical market, investors usually look to buy properties for less than market value, but with such low inventory, they’re willing to pay top dollar,” she says.
Boonzaayer is seeing the same trend. “The 70% rule is no longer relevant in this market,” he says. “A Phoenix cash buyer who is seeking to resell quickly to make a profit (i.e., a ‘flipper’) will generally target a 5% to 10% return on their investment. An investor who is seeking to acquire property for a rental portfolio may be willing to pay up to 100% of fair market value if that property fits their targeted criteria.”
The easiest way to find cash buyers in Phoenix
Even in a seller’s market, finding a reliable cash buyer on your own can be overwhelming. To get started, HomeLight’s Simple Sale platform makes it easy and safe to get a competitive cash offer — and yes, we cover Phoenix!
Here’s how it works:
- Enter the address of your Phoenix-area home and answer a few quick questions about it.
Is it a ranch-style in Gilbert, or a historic condo in Uptown? Does it need a little work, a lot of work, or none at all? How soon are you looking to sell? It could be ASAP or in 12+ months. Our easy questionnaire makes getting set up on the platform a breeze.
- We’ll provide an all-cash offer in as few as 48 hours.
You won’t be obligated to accept any offer you receive. If you’d like, HomeLight can also introduce you to a top real estate agent in your neighborhood for an expert opinion on what your home is worth.
- You sell your house in its current condition.
No additional repairs, prep costs, agent commissions, or hidden fees. This can save you time and money —a 2021 study we conducted found that on average, Phoenix sellers spend more than $6,000 prepping their home for the market. Pests, foundation heave, and damage from the sun are often no issue; our platform will provide a full cash offer for homes in almost any condition.
- You can sell your house fast for cash in as few as 10 days.
A 10-day closing translates as selling your home around five times faster than with a buyer who needs financing in today’s market. According to the latest data from Ellie Mae, purchase loans are taking an average of 50 days to close as of May 2021. You’ll have the ability to pick a move date that works best for your schedule, too. That’s the ease of Simple Sale!
Cash buyers are catering to Phoenix sellers
When you need to sell your home quickly, it can feel like you’re already at a disadvantage with buyers, especially those willing to pay cash. However, the blossoming city of Phoenix and the surrounding area puts sellers in a position of leverage. Even if your house needs serious TLC or you’re in a major rush, it’s the location investors will prioritize most. All you need to do is strike a deal!
Header Image Source: (Mark Skalny / ShutterStock)