The Due Diligence Period Part 2 – Phoenix Area Real Estate Buyer Tips

By Buying, Mike's Articles, Phoenix Metro Real Estate News, Selling June 24, 2019

Last week we looked at seller strategies for navigating Arizona’s Due Diligence period to help sellers avoid a transaction falling through. The best advice in this matter is no different than healthy advice for any topic; be prepared. Know the condition of your home and be pro-active in caring for it along the way. Also, if you’re considering placing your home on the market, it may pay handsomely to have a home “pre-inspection” to discover any issues that you should handle before your buyer’s home inspector finds them.

This week we look at the Due Diligence period from a Buyer’s perspective. Soon, we’ll look more in depth at Buyer negotiation strategies resulting from their Due Diligence.

As we’ve mentioned before, in an Arizona residential real estate transaction there are several major areas of negotiation. First is the initial offer of price and terms. Second, there is the 10 day Due Diligence (inspection) period. Thirdly, there could be further negotiations if an appraisal does not support the purchase price.

As mentioned last week, “the main reason why a home deal falls through once a buyer and seller agree to price and terms is not because of a buyer not qualifying for a loan but because the home they’re buying doesn’t qualify. The home inspection period brought out irreconcilable problems that the buyer was not willing to accept.”

“That clause is now history. You’re now buying that home ‘as-is.'”

A few years back, the Arizona Association of Realtors (AAR) made a major change in our standard real estate purchase contract. Previously, there had been a “Seller Warranty Clause” which required the seller to guarantee the functioning of a home’s mechanical systems, such as Heating, AC, plumbing, electrical, appliances, etc. If any of the “moving components” were not working, generally discovered by a home inspection, the seller was required to repair or replace that item.

That clause is now history. You’re now buying the home “as-is.” AAR took out that clause altogether, in effect making the Arizona home purchase “as is!” That one move arguably made the home inspection the single most important contract issue for the buyer.

Therefore, here’s our best advice for a buyer’s handling the Due Diligence period.

  1. Choose an experienced Home Inspector who has a construction/building background
  2. If needed, follow up with additional inspections from other professionals such as roof, HVAC, pool, mold, etc.
  3. Read and provide a copy of the Seller’s Property Disclosure Statement to the inspector if available before the home inspection.
  4. Walk the neighborhood. Talk with residents from the community. (Hint: Saturday mornings are best to find neighbors out and about) Ask them how they like or don’t like the community, HOA, amenities. (Note: It’s best to discern whether they’re renters or owners. Renters might have more of an edge, which may or may not correctly reflect on the community.
  5. Buyers can also obtain crime and sex offender reports online.
  6. Read and reference the AAR Online Buyer Advisory. This happens to be, if not the best, one of the finest real estate resources in the country.
About the Author
Michael Bodeen, Associate Broker

     I was born and raised in San Rafael, California, from the mid 50’s to the early 70’s. I had super parents who worked hard to provide 5 kids with a good Catholic education – despite my best attempts to overthrow the knuckle-cracking regime of Sister Mary Anselma. My dad worked as a self-employed butcher until his retirement at 65 and enjoyed many wonderful years until mom passed away in 1992.

     Dad passed away in the fall of 2006 having lived a great and full life into his early 90’s! In California, I attended college in Chico and Sacramento as a “Sosh” major, but like many of my contemporaries, I did not have a clue what I wanted to do when I grew up. Because of my age, I missed the Vietnam War and into my early 20’s I had many typical youthful indiscretions.

     Thankfully, that was a brief period of my life, and with greater thanks, not too much damage was sustained in those early and rebellious years. And by the way, those thanks are due to the answered prayers of faithful relatives who prayed for years that a wayward Michael would turn his life over to the Lord, and in January of 1982 that’s what happened.

     I lived in Sacramento, California in the mid 70’s, and later moved to Truckee, California, which is near Lake

Tahoe and Reno, Nevada. Truckee’s often labeled the “coldest spot in the nation.” Why did I move there?

My father-in-law was a real estate broker in Donner Lake, California, and despite his cantankerous disposition, he seemed very successful in his real estate endeavors. I joined him in sales in July of 1976.

    The Truckee and Lake Tahoe area was a wonderful place to raise a family, but a difficult and cold environment to live in, but we did so for 18 years. In 1994, my wife, Karen, and I visited Scottsdale at a friend’s request, and within 8 months, our family of 5 had relocated to “the valley” – or is it a desert? Whatever it is, it’s warm. At any rate, 24 years have gone by since we made the break from the late great state of confusion, uh, California, and it’s turned out to be a great move.

     As for hobbies, I enjoy family, friends and travel. My kids Robert, Kendra, and Jonathan are now 40,

34, and 31 respectively. I recently became “gramps” for the 4th time as well. It’s a nice time of life. Karen remains as lovely on the inside and outside as the day we were married. We continue to wonderfully grow together as the years advance. As an ordained Christian Chaplain, I volunteer Preaching at Florence Prison with Along Side Ministry. The ministry helps make the formerly incarcerated able to function, even thrive, on “the outside.”

     Should you choose to have me represent you in the sale or purchase of your home, you’ll be receiving my 40+ years of real estate knowledge, counsel, and experience (including negotiation experience).

    Beyond the transaction, I’m always available to you, should you ever need my real estate advice.