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How to Sell Your House in Arizona

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Martin Boonzaayer

July 21, 2021

Arizona is a hot spot for people looking to buy a house. The state has the second-highest rate of homeownership in the country, with two-thirds of homes being owner-occupied. It also ranks near the top when it comes to home price growth, so if you're considering selling your house, now may be a perfect time! 

For those homeowners who are selling their house for the first time, the task may seem daunting. However, regardless of the state you live in, there's a lengthy process you must go through before you can enjoy the proceeds from the sale of your house. 

Keep on reading to learn more about the options you have, the costs involved, your responsibilities as a seller, and the sales process will be extensively explained. 

What are your options?

If you're thinking about selling your house, there are a few initial decisions to make before you dive in. The first is determining whether you want to sell the home yourself or with a realtor. 

How to Sell Your House in Arizona

If you're going to sell it on your own, be prepared to devote at least 80% of your daily time to dealing exclusively with the selling process. If you plan to work with a realtor, it will involve additional costs, but you will get to hand off many tasks to them.

What are the benefits and disadvantages of working with a real estate agent versus selling a house on your own? Let's look at the pros and cons of each option. 

>> Selling a house by owner

Pros 

Save realty commission - The main reason people choose to sell a house on their own also called the 'FSBO' method (for sale by owner), is to save as much money as possible. Given that the seller will have to pay certain taxes anyway before completing the deal successfully, the real estate agent commission could be a substantial additional amount for those in a tight financial situation. 

Complete control over everything - By choosing the FSBO route, you'll be able to build the pricing strategy yourself, schedule meetings with potential buyers, and negotiate and analyze the offers received. This means that you'll oversee dealing with market research, competition analysis, neighborhood expertise, and any other factors that may influence the final value of the set price. 

Although it sounds like a lot of work in the first place, complete control over these steps is quite reassuring for some sellers. They will often feel much safer knowing that they deal with all details from start to finish. 

Advertising opportunities for Private Home Sales - You will also be the head of advertising. This means that you will oversee promoting your home and posting your listing. Luckily, there are many options for homeowners who have decided to sell their properties on their own.

You can do this through an FSBO yard sign, on Craigslist, on other websites explicitly dedicated to For Sale by Owner ads, or through a flat-fee MLS company. The internet is full of possibilities!

Cons

Commission-free is rare - And, unfortunately, Arizona is not a state where a commission is optional. Being an FSBO seller will only save you from paying the commission for a possible agent of yours, not your buyer's. That's because 87% of buyers work with an agent.

If you list FSBO and sell to a buyer without an agent (a relatively rare situation), you will pay no commission. However, if you list FSBO and sell to a represented buyer, you must cover the buyer's agent commission. 

Time resources are needed - By listing FSBO, you will get into the role of a seller, negotiator, advertiser, house guide and must be responsible for all legal requirements. Acting in all these roles means that you will have to dedicate a significant amount of time to this selling. 

Successful advertising is problematic - Effectively advertising a house requires the experience of a professional. If you are not a marketer, it will take some time to figure out how to promote your home in the best ways. This time spent trying to learn could involve a few hundred unsuccessful photos and poor-selling propositions. 

Many homeowners do not have the necessary skills and experience to use other ways of promotion besides just posting online. Expert agents in real estate have a customer base that they can access and know exactly who to talk to, thus eliminating potential buyers who could waste time. 

Practical negotiation skills are required - Reaching an agreement with a potential buyer can be intimidating. As you negotiate and eventually settle on a price, it may be challenging to defend a fair house price while also meeting the buyer's requests.  Many of those requests will not even be related to the price. Instead, they'll be related to the issues identified after inspecting the house. 

A home inspection is the one component that can often end the buyer's interest due to unsuccessful negotiation. This places the FSBO seller in a position where they must now look for other potential buyers. 

The way you handle the negotiations after a house inspection can be a determining factor in whether you have a successful sale or not. 

💡 Key Insight: Keep in mind that when negotiating home inspection items, you should always try to negotiate for a closing cost credit or a price reduction instead of going through time-consuming reparations. Or, to avoid all this, you can make sure that your house is well kept from the beginning. 

>>Working With a Real Estate Agent

Pros 

More credibility - Leaving the house-selling responsibilities in the hands of a professional is typically a good idea, especially if you have zero knowledge about selling a house. And, despite the beliefs of those who prefer the DIY approach, this option can bring many benefits. 

Your potential buyers will usually have an agent to represent them. If sellers also use a realtor, it will give them more credibility. The buyers and their agents know that those who embark on selling their own homes are usually inexperienced. They understand that FSBO Sellers can potentially be a waste of time trying to work with. 

Thus, a represented buyer will primarily focus on represented sellers.

Expert advertising - Working with an agent means having access to a professional database of buyers who know exactly what they are looking for, high-quality photos of the properties, and well-crafted sales speeches. 

Advertising your house on your means promoting it among buyers as inexperienced as you.

Deciding to work with a real estate agent will get you access to higher-level advertising. The agent will know how to raise awareness at the right target using the proper tools. 

Tips for improvements - Did you know that specific improvements before meeting potential buyers can significantly increase the price of your house? Maybe you didn't, but a real estate agent certainly knows. 

They will give you valuable tips on the improvements you can make to increase the selling value of your property.

💡Key Insight: The condition of your home plays a significant role in its value and appraisal - for example, a deck addition can recoup as much as 72% during resale.

Agents work full-time on the task - This means that your responsibilities will diminish significantly after hiring one. They can fully deal with market research, price strategy, home inspection, and any other aspects of the sale process. 

However, that does not mean that you will no longer have control over your house being sold. Instead, you will have the freedom to get involved only when you have the time and desire to do so. 

No emotions involved - When selling a house independently, it is easy to fall prey to emotions and become subjective about certain aspects of the process. The agent will pursue only one goal - to sell, so there will be no influence from other external factors. 

They will aim to find the best price, carefully filter prospective buyers, negotiate to your advantage, and ensure that both sides are satisfied with the end agreement. 

Avoid legal issues - Selling a house is an activity that involves following a lot of laws. Sometimes, no matter how hard you try, there is a possibility that you will lose sight of something. 

Sellers must deal with legal requirements such as Arizona disclosure forms. An agent will advise you on all the documents you need to close the sale without legal complications.

Cons 

Paying commission - The average commission rate in Arizona for a realtor is somewhere between 5-6% of the house price. Given that the median price in Arizona is $375,000, the commission for a realtor would reach somewhere between $18,750 - $22,500. Although it is not a colossal amount for some people, it is still quite a lot for others.

This is the main reason why many homeowners avoid hiring a realtor when selling their properties. Unfortunately, they often avoid it without considering all the effort they will have to get their home sold.

Incompatible partnership - As with many other services that people use, there are many real estate agents on the market, some experienced, some less professional. 

There is always a possibility you will find an agent with whom you are not compatible. Some agents might treat you as just another one of their many clients, and they may not be efficient in fulfilling your objectives.  

Choosing to either sell your house independently or with a real estate agent is an important decision. There are pros and cons of both methods, so it's best to weigh them all before making a choice. 

Do you have the time and patience to sell on your own? Is it worth it to you to do the work of selling your home so you can avoid paying commission fees? Are you comfortable negotiating offers from potential buyers? Can you handle rejection without getting discouraged? 

If not, then going with a real estate agent might be your best option. Realtors will do most of the work for you, devote their time to effectively marketing your property, and iron out the details when it comes time to make a settlement. You'll also have access to their knowledge about market conditions to get the best possible price. 

Selling a House in Arizona Process Overview

Sellers want to sell their property as quickly and for as much money as possible. But, to achieve that, they must follow some tried-and-tested steps towards the sale. 

Whether you choose to sell your home on your own or work with a real estate agent, both options typically follow the same selling process.

  1. Determine the Selling Price 

The best way to set your home's price is first to compare it with similar properties. Check the price for homes like yours which have been sold in recent months. You can also keep an eye on local real estate listings and see what costs the homes are sold for.

However, pricing a home is an essential skill for a real estate agent. Pricing your house too high will make it harder for people to find it desirable, while pricing it too low will make you miss out on potential income. If you choose to work with a realtor, determining the selling price will be much less of a concern for you.

The timing of your home sale can also impact its price, so keep in mind when the best times are for selling homes, specifically in Arizona. 

💡 Key Insight: If a fast sale is your goal, you should list in June and July as these are the months with the quickest sale rate in Arizona.

  1. Marketing your house 

Success in real estate can depend a lot on marketing. A good marketing plan for your home will yield the best results and get you to close the deal quicker. 

As a homeowner, you may have heard that advertising is essential when selling your house. It can be challenging to know where and how to advertise your property for sale without hiring a professional. Real estate agents are trained to know the best ways to promote and bring potential buyers into their listings. 

But if you're looking for an alternative way, many online resources will get the word out about your listing as well as provide other helpful information on the home buying process. 

Although choosing to work with an agent is an optional step, advertising your property is mandatory. 

  1. Showing the house

Next comes the step where potential buyers will visit the property for an inspection. You can present the house to them, or you can delegate this responsibility to the real estate agent.

The buyers will usually want to check if the pictures match the reality of the home, see what they can do with space, and see how it appeals to them. Therefore, you must make sure your house looks its best when showing it. 

Some ways you could prepare before a showing include: 

  • Making sure all furniture, lamps, and decorations are in place; remove any clutter or messes from the floor
  • Taking out any personal items like family pictures or clothes from closets
  • Making sure there are no odors (cooking smells, pet smells)
  • Being mindful of fragrances since some people may have allergies/sensitivities
  • Cleaning stains on carpets or hardwood floors so that the house will look fresh and welcoming.
  1. Negotiate 

Most buyers will want to negotiate when it comes to the final price. The negotiation includes closing costs, transfer taxes, inspection fees, and other fees associated with the close. You will either prepare for this negotiation or choose to have an agent negotiate on your behalf. 

  1. Home inspection and appraisal 

Before finalizing a purchase, a home inspection and an appraisal done by a licensed Arizona appraiser need to be completed. 

Some may be surprised to learn there is a difference between home inspections and appraisals, because they are so often used interchangeably.  In reality, however, they are extremely different in terms of the purpose they serve and the clients they service.  The Home inspection is done on your behalf, while the appraisal is done on behalf of the bank holding the mortgage (to preserve their interests in the transaction).

A home inspector will thoroughly inspect the property for any issues that may be present and make recommendations to fix them. 

This appraisal is necessary to get an idea of what your home is worth in the current market. You will also need to register your property with the county and pay a $5 fee. In addition, you will need to provide information about your property that includes when you moved in, when you built it, how many bedrooms are included, and more.

  1. The final step

This final step follows the same process as other states. However, there are some unique aspects of the closing process in Arizona that may cause some confusion to buyers and sellers alike.

The closing can span over a few days or up to a week. In the state of Arizona, not all parties are required to be present to finalize the closing of a sale.

Before you can finalize the sale, the buyer must also pay any remaining balance in down payment and any other costs owed to the seller. After that, the buyer receives the keys, and the house is officially sold. 

Disclosure Requirements for Selling a House in Arizona

The Arizona Real Estate Disclosure Law requires sellers of real property to provide a disclosure document disclosing information about any defects in the property. The law applies to all residential real estate transactions regardless of whether it's a single-family home, condominium, townhome, or manufactured home.

How to sell your house in arizona

For your house to pass inspection and be sold on the market, you have to comply with this law by giving buyers one of two documents: a Home Sellers' Disclosure Statement(SPDS) or a Custom Residential Property Report (CRPR). These include questions for the seller related to all essential facts known about the house to inform the buyers about the property's condition.

💡 Key Insight: The SPDS is divided into several detailed categories such as ownership and property, the safety level of the house, sewer/wastewater treatment, utilities and services, and other conditions and factors regarding the environment. 

However, even if this document aims to get many answers about the property for sale, there are a few things that the seller isn't legally required to disclose, such as: 

  • Information on registered sex offenders if the property is within proximity to the offender. If this detail is a concern, buyers can inquire about this with the help of the Arizona Department of Safety Sex Offender Database.
  • Information about deaths on the property if they were natural deaths or suicides if the cause of death is not related to living conditions in the house.
  • Information about someone living on the property (or who previously lived there) having a disease such as AIDS, HIV, or any other conditions that can be spread. 

We go more into depth in our article Real Estate Disclosures – What You Have to Share Legally in Phoenix

The Bottom Line

Selling a home in Arizona is no easy task. You must put yourself out there and be willing to work hard to reach your goal of a successful sale. It can be even more challenging when you are also trying to balance work and personal life simultaneously. Fortunately, if you're considering selling your house soon, working with a professional can make the process much easier and less stressful.

The Trusted Home Buyer will help guide you through the entire sales process from start to finish. We ensure that all your needs are met without any stress or pressure on your part, and there are no hidden fees involved. 

We know how tough things can be when people try doing everything themselves, which is why we're here to lighten the load by taking over all your seller responsibilities. 

Alternatively

Let's say that your house is in poor condition, and you don't have the money, time, or energy to make the required repairs needed to get your home sold. Realtors often struggle to sell distressed homes, and unless you are a professional in the real estate space, selling an FSBO distressed house is not recommended. Buyers will use the condition of your house to knock the price down much lower than what you could get by selling to a cash home buyer such as us!

👍 Sell to Us: We have an excellent track record with our clients. Don't just take our word for it and check out our reviews here. You might be thinking to yourself, "Cash Home Buyers are Scammers." Read our article on what constitutes an honest Cash Home Buyer. You see, we want you to do your research on us before you decide to get an offer from us.------> Get your free offer today!

FAQ's

What are the Closing Costs for Sellers in Arizona? 

Closing costs in Arizona vary based on several factors, such as type of mortgage, real estate concessions, and other fees. While some of them are fixed, others can be negotiated/lowered depending on the situation.

Those costs typically include title insurance, appraisal fee, recording fee, homeowner's association transfer fee, fender's title insurance policy, lender's settlement charge, lender's discount for automated underwriting systems, government recording charges, and miscellaneous escrow fees. 

What is the leading risk when owners choose to sell a home themselves? 

When you sell your home in Arizona FSBO, there is no protection if the buyer doesn't follow through with the purchase. The most important protection you can get is to have a real estate lawyer review the contract before signing. 

You should always consult an attorney to learn more about the seller's disclosure requirements in the state before making a selling decision on your property.  

Can sellers skip disclosing information about their property?

Seller property disclosures are required by law in Arizona. The seller is obligated to provide these disclosures to the buyer.

Sellers who skip disclosure could be sanctioned by law, given that buyers may find an issue in the house after the purchase about which they were not informed from the beginning

What is a Purchase Agreement? 

After the two parties agree to the terms, some formalities are involved. One such formality is a Purchase Agreement, which is a contract between the seller and buyer. It can be used to sell just about any kind of property, including land, houses, condominiums, commercial buildings, vacant lots, or undeveloped property.

The following vital sections would typically be included within this agreement:

- The offer price and amount of earnest money.

- Other conditions must be met before the sale can conclude.

- When and how the purchase price will be paid to the seller.

- The date on which the title will transfer from seller to buyer.

- Any other conditions related to the sale or moving in after closing (e.g., utilities).

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