If you live near new construction, you may have noticed something that seems strange. A resale home in your neighborhood has been sitting on the market for weeks — maybe months — while the builder down the street keeps selling homes. You might look at that house and think: What's wrong with it? Sometimes, absolutely nothing. The problem may be that the seller isn't just competing with the other resale homes in the neighborhood. They're competing with the builder. And that changes everything. The Builder May Be the Biggest Competition This is something many homeowners don't realize until they're ready to sell. Builders may be offering buyers incentives such as: Below-market interest rates Closing cost assistance Appliances Design or upgrade incentives HOA incentives Other financing or move-in specials We even had a client purchase a new construction home where the builder paid two years of HOA dues upfront. These offers change frequently and vary by builder, community, home and financing program. But if I'm helping someone sell near active new construction, I want to know what those builders are offering. Because buyers know. And they're comparing those offers to the resale home. Buyers Aren't Always Shopping by Price This is probably the biggest thing I wish more resale homeowners understood. Many buyers aren't shopping based only on the price of the house. They're shopping based on the monthly payment. Here's an example of just how much a builder's lower interest rate can change the comparison. Let's say a buyer is considering a $475,000 resale home at a 7% interest rate. Down the street, a builder has a $550,000 new home and is offering qualified buyers a 4.25% rate. Assuming a 30-year fixed mortgage and 5% down, here's what the principal-and-interest portion of those payments would look like: $475,000 Resale $550,000 New Build Purchase Price $475,000 $550,000 Down Payment (5%) $23,750 $27,500 Loan Amount $451,250 $522,500 Interest Rate 7.00% 4.25% Principal & Interest About $3,002/mo. About $2,570/mo. The new home costs $75,000 MORE, yet its principal-and-interest payment is approximately $432 LESS per month. That's a big deal. A homeowner with a $475,000 resale may look at that $550,000 new build and think: "That's not my competition. Their house costs $75,000 more than mine." But the buyer may be thinking: "I can buy the brand-new house and have a lower monthly principal-and-interest payment." Now we have a completely different sales challenge. These numbers are for illustration and compare principal and interest only. They don't include property taxes, homeowners insurance, mortgage insurance, HOA fees or other costs that affect the total monthly payment. Builder financing incentives also have specific qualifications and can change. Buyers should always get actual payment information from their lender. And Then the Buyer Walks Into the Model Home Now add another layer. Model homes are designed to sell houses. The furniture is beautiful. The finishes are current. The lighting is right. The rooms are staged. Everything is designed to help buyers picture themselves living there. Then that buyer walks into a resale home. If it's cluttered, dark, dated or has obvious deferred maintenance, the difference can feel much larger than it really is. That's why presentation matters even more when we're competing against builders. We aren't trying to make a resale home look brand new. We're trying to make sure it looks like a strong alternative to brand new. But Resale Homes Have Advantages Too New isn't automatically better. A resale home may already have a finished backyard, mature landscaping, window coverings, ceiling fans, appliances, upgraded lighting, storage, a pool or thousands of dollars in improvements that aren't necessarily included in the builder's advertised price. It may have a larger lot. It may be in a finished section of the neighborhood without years of construction around it. It may have a location or homesite the builder can no longer offer. Those things have value. But buyers need to see and understand that value. That's where marketing becomes incredibly important. So Why Is That Resale Home Still Sitting? It isn't always because the price is too high. Sometimes the home wasn't prepared well enough. Sometimes the photos don't compete with what buyers are seeing online from the builder. Sometimes there isn't enough marketing beyond putting the property in the MLS. Sometimes nobody has clearly shown buyers what is already included in the resale home. And sometimes the pricing strategy was based almost entirely on other resale sales without paying enough attention to what a buyer can purchase brand new nearby. Usually, it's not one single thing. It's the entire package. Resale Sellers May Have More Options Than Buyers Realize Builders are very good at advertising their incentives. Resale sellers don't have a giant sign at the entrance to the neighborhood advertising theirs. Depending on the financing and terms negotiated in the transaction, a resale seller may be willing to provide concessions that a buyer could potentially use toward allowable closing costs or an interest-rate buy-down. But many buyers don't even know that may be an option. That's another reason positioning and marketing matter. We can't assume buyers will figure out every advantage of the resale home on their own. I Often Help Sellers When the First Try Didn't Work I regularly talk with homeowners whose first attempt at selling didn't produce the result they expected. Sometimes the listing expired. Sometimes the seller canceled it. Sometimes they're simply trying to figure out what they should do differently before trying again. My first question isn't: "How much should we reduce the price?" It's: "Why didn't the home sell?" Those are two very different conversations. If the home is competing with new construction, I want to understand what buyers were comparing it against. What were nearby builders offering? How did the home present online? Was it clean and ready for buyers? Did the photography help it compete? Was minor staging needed? Did buyers understand the value of the improvements already included with the home? Was there enough online exposure? Did the pricing make sense once builder incentives were taken into consideration? Only then can we build a strategy for bringing the home back to market. Selling Near Builders Means We Can't Cut Corners We are getting resale homes sold in areas with heavy new construction. But these are not the listings where I want to stick a sign in the yard, take a few photos and hope someone eventually comes along. The home needs to look as clean and turnkey as reasonably possible. We use minor staging when it helps. We use professional photography, floor plans and video to help buyers understand the property before they ever get in the car. We pay attention to online placement and how the home's advantages are presented. Because your first showing isn't necessarily happening inside your house anymore. It's happening on someone's couch. That buyer may have your home open in one browser tab and the builder's website open in another. Our marketing needs to give them a reason to click on yours. Before You List — Or Before You List Again If you're thinking about selling a home near new construction, don't just look at what the house next door sold for six months ago. We need to look at what your buyer can purchase today. And if your home was already on the market and didn't sell, don't automatically assume the only solution is a major price reduction. First, let's figure out what happened. I look at the resale competition, nearby builders, current incentives, condition, presentation, pricing and marketing to determine where the property may have lost buyers — and what we can do differently the next time around. Sometimes the home doesn't need a dramatically lower price. It needs a different strategy. Frequently Asked Questions Why are resale homes taking longer to sell near new construction? Builders may be competing for the same buyers with below-market financing, closing cost assistance, warranties, appliances and other incentives. That can make new construction attractive even when its purchase price is higher. Can a more expensive new home actually have a lower monthly payment? Yes. Interest rates can make a significant difference. In our example, a $475,000 resale at 7% had an estimated principal-and-interest payment of about $3,002 per month. A $550,000 new home at 4.25% was approximately $2,570 per month using the same 5% down payment. That's roughly $432 less per month even though the new home costs $75,000 more. Taxes, insurance, mortgage insurance, HOA fees and other costs still need to be considered. Does a resale seller have to lower the price to compete with a builder? Not necessarily. Price is important, but so are condition, presentation, included improvements, lot, location and marketing. I want to understand the entire competitive picture before recommending a pricing strategy. My home was listed before and didn't sell. Does that mean it was overpriced? Not automatically. Pricing could have been a factor, but I also want to look at presentation, photography, marketing, buyer feedback, showing activity and competition from both resale homes and builders. Should nearby builder incentives be considered when pricing my resale home? Absolutely. Buyers are comparing those options whether the resale seller realizes it or not. Knowing what the builders are offering helps us understand the competition we're actually facing. Can Rover Realty help if my home was previously listed with another agent? Yes. I often work with sellers who are preparing to try again. I start by looking at what happened during the previous listing and what has changed in the market. From there, we can build a new strategy around the home's current competition rather than simply repeating the same approach. Rover Realty | Real agents helping real people.

If you plan to rent out your Arizona home, do you really need a property manager? Not every rental owner makes the same choice. Some people manage their own homes. Others hire a company to handle the daily work. As a real estate investor with several rental properties, I firmly believe in hiring a professional property manager. I am licensed to handle property management myself. I still pay someone else to manage my rentals. Here is why. A Property Manager Creates a Boundary A rental property is an investment, but landlord and tenant issues can become personal very quickly. What happens when the tenant is late with rent? What if a repair is requested at an inconvenient time? What if the tenant asks for an exception to the lease? What if the owner disagrees with how the tenant is caring for the home? A property manager creates a boundary between the owner and the tenant. Instead of calling the owner about every question, the tenant works with the management company. The manager can explain the lease, collect payments, coordinate repairs and handle difficult conversations. That separation helps keep the relationship professional. For me, that boundary alone is worth paying for. What Does a Property Manager Do? Services vary by company, but property management may include: Advertising the home for rent Showing the property Screening applicants Preparing or managing the lease Collecting rent Responding to maintenance requests Coordinating repairs Completing scheduled property checks Handling lease violations Communicating with the tenant Preparing the home for the next renter Providing reports to the owner Before hiring a company, ask exactly which services are included. You should also ask which services cost extra. Can I Manage My Rental Myself? Some owners manage their own rental homes successfully. Before deciding to do that, ask yourself: Do I understand the lease? Do I know how to screen applicants fairly and consistently? Am I prepared to document every payment and repair? Can I respond when something breaks? Am I comfortable enforcing the lease? Can I separate my emotions from business decisions? Do I know when to contact an attorney? Do I have time to keep up with changing rules and requirements? What will happen when I am traveling or unavailable? Managing one rental may sound simple when the home is occupied and the rent arrives on time. The real test comes when something goes wrong. A water heater can fail. An air conditioner can stop working in July. A tenant may miss a payment. A disagreement may come up over damage, maintenance or the security deposit. Those problems do not always happen during business hours. Why I Believe Property Management Should Be a Specialty Property management and residential sales are both parts of real estate, but they are not the same job. A property manager must focus on tenants, leases, rent, inspections, repairs and landlord-tenant issues. A residential sales agent must focus on pricing, preparation, marketing, showings, contracts, negotiations and closing deadlines. Each job requires different systems, skills and demands on a person’s time. Many property managers already oversee a large number of homes. Residential sales can also require attention at all hours. I do not believe it is in our clients’ best interest for Rover Realty to divide its focus between both jobs. Our clients hire us to help them buy and sell homes. We owe it to them to stay in that lane. That is why Rover Realty does not provide property management, tenant placement, rent collection or lease administration. We also do not handle commercial real estate transactions. We refer those needs to professionals who focus on those parts of the industry. How We Chose Our Property Management Referral Partner Our trust in our property management referral partner was built long before we began sending clients to him. Many years ago, our family owned a landscaping company. We operated that business for about 10 years and completed work for several property management companies. We often visited rentals while one tenant was moving out and the home was being prepared for the next renter. Some properties were in terrible shape. At times, it looked as if the inside of the house had been emptied onto the front porch. We saw damage and signs that smaller problems had been allowed to grow. One property manager’s homes stood out for a different reason. They seemed to have fewer problems during tenant turnover. I wanted to know why. As I learned more about his business, I found that he took screening seriously, completed regular property checks and maintained clear communication with both owners and tenants. His systems appeared to catch problems sooner and set clearer expectations from the beginning. Based on what we saw in the field, we decided to hire him for our own rental properties. We have now used his services for more than 15 years. We have also referred many other homeowners to his company. That referral was not based on an advertisement. It was based on years of watching how he cared for the homes he managed. Questions to Ask Before Hiring a Property Manager Not every management company operates the same way. Before signing an agreement, consider asking: How many homes does each manager oversee? How are rental applicants screened? How often are property checks completed? How are maintenance requests handled? Who approves repairs? Is there a spending limit for repairs? Who answers emergency calls? How will I receive updates? What reports will I receive? How are late payments handled? What are the management fees? Is tenant placement a separate charge? What happens if I decide to sell the home? How can either party end the management agreement? Communication matters. A low management fee may not be a bargain if calls go unanswered or property concerns are missed. Should I Rent Out My Home or Sell It? Sometimes the bigger question is not whether to hire a property manager. It is whether keeping the home as a rental makes sense at all. Before deciding, consider: The possible monthly rent Your mortgage payment Property taxes and insurance Management fees Expected maintenance The age of the roof and major systems Possible vacancy between tenants Your long-term plans The home’s current market value How much money you may receive from a sale Owning a rental can help build long-term wealth, but it is not passive income every month. Homes need repairs. Tenants move. Expenses come up. The decision should be based on real numbers, not only on what the monthly rent might be. A property manager can help you understand the rental side. A real estate agent can help you understand the current sales market. What Can Rover Realty Help With? Rover Realty does not manage rental properties. We can help if you want to: Sell your current rental Buy a residential investment property Sell after a tenant moves out Prepare a former rental for the market Review the likely sale price of your home Compare selling with keeping the property Sell an inherited home that has a tenant Understand how the home’s condition may affect a sale If you decide to keep the home as a rental, we can introduce you to the property management company we have personally used for more than 15 years. You should still interview the company, review its services and decide whether it is the right fit for you. Frequently Asked Questions Do I have to hire a property manager to rent out my home? Not every owner chooses to hire a manager. However, you will still need to handle tenant screening, the lease, rent collection, repairs, documentation and other landlord duties. Speak with a qualified Arizona professional about any rules that apply to your situation. Is hiring a property manager worth the cost? For many owners, it is. A manager can save time, create a boundary with the tenant and handle problems when they arise. The value will depend on the company’s service, communication and fees. How much does property management cost in Arizona? Fees vary by company and service. Some companies charge separate fees for tenant placement, lease renewals, inspections or maintenance coordination. Ask for a complete written list before signing an agreement. Can a property manager find a tenant for me? Many property management companies offer tenant placement and screening. Some will place the tenant without providing ongoing management. Ask what options are available. Why does Angela use a property manager for her own rentals? I value the boundary between owner and tenant. I also want someone who focuses on property management every day. Even though I am licensed to handle it myself, I believe my rentals are better served by a specialist. Does Rover Realty manage rental homes? No. Rover Realty does not provide property management, tenant placement, rent collection or lease administration. We specialize in residential real estate sales. Can Rover Realty help me sell a rental property? Yes. We can help you prepare, market and sell a residential rental property. The plan will depend on whether the home is vacant, occupied or in need of work. Can Rover Realty help me decide whether to rent or sell? We can help you understand the estimated sales value and what may be involved in preparing the property for the market. A property manager can provide information about expected rent and management costs. Looking at both sides can help you make a more informed choice. Can Rover Realty refer me to a property manager? Yes. We can introduce you to the company we have trusted with our own rental properties for more than 15 years. Are You Deciding What to Do With Your Arizona Home? If you plan to rent out your home, we recommend speaking with a property management company that specializes in tenant placement and ongoing management. If you are deciding whether to rent or sell, Rover Realty can help you understand the current residential sales market and what your property may be worth. We do not provide property management. We help people buy and sell residential homes throughout Mesa, Apache Junction and the East Valley—and we refer the rest to trusted specialists.