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A: The average days-on-market for a Phoenix home in 2026 ranges from 72 to 94 days. Homes priced accurately to the market typically receive an offer within the first three weeks of listing. Homes that sit longer than 30 days without offer activity usually require a price reduction, or buyer-pool problem rather than a marketing problem.
A: Real estate commission in Arizona is fully negotiable and has been since the March 2024 NAR settlement took effect. Total commission historically ran 5 to 6 percent of the sale price, with the listing side and buyer side each receiving roughly half. Post-settlement, the listing-side and buyer-side commissions are negotiated separately, and the seller is no longer required to offer buyer-side compensation through the MLS. In Phoenix, total negotiated commissions in 2026 typically range from 4 to 6 percent depending on the structure, scope of services, and listing complexity.
A: Accurate pricing is the most important decision in any listing. I price homes using a proprietary market trend analysis (which is comprised with 3 different reports), in addition to a comparative market analysis that considers active comparable listings, recently sold comparables within a defined geographical area and time window, expired listings to identify pricing patterns to avoid, current days-on-market trends in the specific price band, condition and feature deltas relative to comps, and the buyer pool composition active in that community and neighborhood. I do not use automated valuation models like Zestimate or Redfin Estimate as a primary pricing tool - these models miss far too many factors, conditions such as macro and micro-market context of supply vs. demand to be reliable for listing decisions. Automated valuation models take many data points in consideration with an algorithm that simply cannot accurately ascertain your homes value in the way an expert with judgement can take into consideration the major factors down to the subtle nuances.
A: Seller closing costs in Phoenix typically reach up to 1% of the sale price, separate from commission. These standard settlement costs include title insurance, escrow fees, recording fees, transfer taxes (Arizona does not impose a state transfer tax, but some cities have local fees), prorated property taxes, prorated HOA assessments (if applicable), and mortgage interest paid in arrears. Any seller-side concessions negotiated with the buyer would be in addition to the 1%. Specific costs vary by transaction and will be itemized in your closing disclosure prior to close of escrow. During a consultation with me, I provide an accurate preliminary settlement statement so that you know your cash equity position in order for you to make confident and informed decisions regarding the potential sale of your home.
A: As an active and full-time licensee since 2003, I have personally served well over 1,000 homeowners complete a successful sale. From the market swings of the housing boom in 2005, through the crash in 2007-2010 I've helped homeowners throughout the Greater Phoenix area sell their homes and investment properties as a traditional sale, short-sales, pre-foreclosures and even represented banks with their Real Estate Owned (REO's) properties, completed several hundred Broker Price Opinions (BPO's) and was listed on the Maricopa Superior Courts "Special Real Estate Commissioner" roster as a court appointed agent when divorcing parties were not able to agree on a realtor to sell the home.
Additionally, I have personally purchased over thirty-six properties for myself by using creative seller financing or true hard money loans while acquiring only two mortgages through traditional bank financing. One of those bank loans was a cash-out refinance to update a duplex.
A: I have completed the 24 hours of required continuing education every two years until 2010 when I passed the state and national exam to receive my Brokers license. Broker licensees have a continuing education requirement of 30 hours every two years.
I have held the following designations:
I have served as:
My career as a licensee:
A: Total real estate compensation in Arizona is fully negotiable, and post-NAR settlement (Aug. 2024) the listing-side and buyer-side commissions are negotiated separately. My listing-side commission is based on my experience, knowledge and expertise with the specialized solutions most agents know nothing about - let alone how to advise and support navigating you through a smooth escrow process. My fee depends on the scope of services, complexity of the transaction structure (a conventional cash sale and a §453 installment sale require very different skillsets and work), and sometimes based on the price band of the property. You would think my fee would be higher compared to what other agents charge. I'm completely confident you will be pleasantly surprised with the amount we discuss once we have a conversation about your situation and the options I provide for you as specialized solutions to accomplish your goals. Buyer-side compensation is a separate decision the seller makes when listing, and can not be offered through the MLS listing data. Every compensation conversation happens up front without being contingent upon conditions. If there is any adjustment made to the compensation, it is in writing so you must sign off in full transparency on what service is included.
A: Standard listing agreements in Phoenix run approximately six months. My agreement is negotiable with a defined termination clause that allows either party to cancel with reasonable notice and cause. Again, my agreement and terms are fully negotiable - including duration, marketing budget, compensation structure, and termination rights. Everything is discussed and documented before either of us sign.
A: If you're not sure you're ready to sell, that means you're not ready to sell. I never pressure sellers to sign a listing agreement or push to sell on a timeline that doesn't match their situation. Most of my first conversations end with one of three outcomes:
1. We agree to list now
2. We agree to revisit in 30, 60 or 90 days when conditions or your situation changes
3. We conclude that selling isn't the right move and you should stay put.
All three outcomes are equally satisfactory with me. What I will not do is talk a seller into a transaction that doesn't serve them simply in an attempt to profit. From our initial conversation and with very interaction with me, it will be self-evident that your highest and best outcome is what I'm committed to creating, in service to you.
A: Seller financing is a real estate sale structure in which the seller, rather than a bank, lends the purchase money to the buyer. The buyer makes a down payment at closing and then makes monthly payments of principal and interest secured by a promissory note and a deed of trust on the property. Payments should ALWAYS be made to a third party Account Servicing company (for end of year tax reporting and payment receipt date accuracy - to avoid late payment charges), along with an impound account for 1/12th monthly property taxes and homeowners insurance. Account servicing then pays the underlying mortgage (if any) and then the difference between the underlying mortgage payment and the monthly amount due per the promissory note are paid to the seller. Any HOA dues and/or solar payments are made by the buyer directly to that provider. The note may run 3-10 years before a balloon payment is due, if any.
A: Yes, seller financing is legal in Arizona. Sellers are permitted to carry notes from buyers, with several federal and state regulatory requirements to follow. The Dodd-Frank Act, through the SAFE Act, imposes restrictions on individuals who finance more than three properties in a twelve-month period — these high-volume sellers may need to engage a licensed mortgage loan originator. Owner-occupied transactions have additional consumer protection requirements that do not apply to investment property sales. The note must comply with Arizona's usury and lending laws, and the documentation should be prepared or reviewed by a licensed Arizona attorney to ensure enforceability. Seller financing is legal in all fifty states including Arizona, has been used in American real estate for over a century, and is increasingly common in high-interest-rate environments where traditional bank financing limits the qualified buyer pool.
A: An IRC §453 installment sale allows a property seller to recognize capital gains pro-rata over the life of a promissory note, rather than recognizing the entire gain in the year of sale. The formula is: Gross Profit Ratio multiplied by Principal Received in any given year. The gross profit ratio equals total gain divided by total contract price. Interest received on the note is taxed separately as ordinary income in the year received. Depreciation recapture is a key exception - under §453(i), recapture is recognized in the year of sale and is not eligible for installment treatment, which makes properly sizing the down payment essential for investor sellers.
A: Seller financing offers three primary tax benefits compared to a conventional cash sale. First, capital gains are spread across the years principal is received, usually compressing the gain into lower brackets and frequently avoiding the 3.8% Net Investment Income Tax in years that would otherwise be borderline. Second, the seller earns interest income on the note - taxed as ordinary income but received over years rather than forgone entirely. Third, total proceeds typically run 20 to 40 percent higher than a comparable cash sale because seller-financed properties often sell at a 1% to 4% price premium and accumulate substantial interest income over the note term.
A: You qualify a seller-finance buyer using essentially the same documentation a bank would: credit pull, employment and income verification, two years of tax returns or W-2s, asset and reserves verification, debt-to-income calculation, and identity verification. Many seller-finance buyers are self-employed or recently relocated individuals who can document income but cannot fit conventional bank guidelines — they are not unqualified, they are unconventional. The down payment requirement, typically 10 to 25 percent, serves as the primary protection against default. The promissory note and deed of trust provide foreclosure rights identical to those of a bank.
A: If a buyer defaults on a seller-financed note, the seller's remedies are the same as a bank's: declaration of default after three consecutive payments are missed. Then, a 91 day reinstatement period as a cure period, formal notice of acceleration, and ultimately foreclosure. Arizona allows non-judicial foreclosure when the note is secured by a deed of trust, which is faster and less expensive than judicial foreclosure. In a properly underwritten transaction the seller keeps the down payment, all interest and principal received to date, and recovers the property - usually at a basis below current market value. The seller is typically more protected than the buyer in a default scenario. In fact, if you keep the buyers down payment, all interest paid to date and you get the property back to sell it again... The buyer did you a favor so you can sell it again at full market value.
A: There is no such thing. The buyers down payment is not the sellers gauge of borrower risk. The interest rate is the risk indicator depending the credibility of of the buyer. The down payment required by a bank reflects risk of market volatility. If a buyer puts down 20% and the market shifts downward significantly, the buyers down payment is the first loss when values go down. It's a protection against potential loss in value, not risk assessment of the borrower. Besides, the bigger the down payment, the smaller the loan amount-the smaller the monthly payment the seller receives. The purpose of a seller offering seller financing is monthly cashflow without being a landlord and the potential payoff of a balloon being higher than the underlying mortgage balance sue to amortization and interest rate engineering.
The right number for a down payment depends on the seller's tax exposure, if any (down payment should at minimum cover year-of-sale depreciation recapture if applicable, seller customary closing costs, etc.).
A: The interest rate on a seller-financed note must be at or above the Applicable Federal Rate (AFR) published monthly by the IRS - typically 4 to 5 percent in 2026 depending on the term. Most seller-financed notes carry rates higher than market rate as a premium simply for offering a buyer the chance to own a home. The rate must be high enough to compensate the seller for tying up capital, low enough to attract the buyer, and competitive with what the buyer could obtain elsewhere given their qualification profile. Below-AFR notes trigger imputed interest under §1274 and create unwanted tax complications.
A: A balloon payment is a single lump-sum payment that pays off the remaining principal balance of a seller-financed note at a defined point — typically year 5, 7, or 10. Most seller-financed notes are structured with a 30-year amortization schedule but a balloon payoff in the earlier year. This produces low monthly payments for the buyer (sized as if it were a 30-year loan) while giving the seller a defined exit date. At balloon, the buyer refinances with a conventional lender, sells the property, or pays off the note from other resources.
A: Yes and No. Seller financing requires properly drafted documents including a promissory note, deed of trust or mortgage, and any applicable disclosures. These must be drafted or reviewed by a licensed Arizona attorney or an escrow officer familiar with these types of transactions to ensure enforceability and compliance with state and federal law. An attorney can coordinate with the title company, escrow officer, and the seller's CPA to make sure the entire transaction is documented correctly. The cost of attorney involvement is typically 0.1 to 0.3 percent of the sale price - a fraction of what a poorly documented transaction can cost in default or tax-treatment problems later.
A: FSBO stands for For Sale By Owner. It refers to a residential real estate sale where the homeowner sells the property directly without retaining a listing agent. FSBO sellers handle their own marketing, showings, negotiations, and closing coordination, though they typically still work with a title company, escrow officer, and sometimes a real estate attorney. According to the National Association of Realtors, FSBO sales represented about 5 to 6 percent of all completed home sales in 2025.
A: Yes. Arizona law permits homeowners to sell residential property directly without retaining a real estate agent. You'll still need to comply with all required disclosures, including the Arizona Seller's Property Disclosure Statement and any city or county-specific disclosures. You can use the Arizona Association of Realtors purchase contract or a custom contract drafted by an attorney. Most FSBO sellers work with a title company to handle escrow and closing, and many engage an attorney for contract review and document preparation.
A: FSBO can theoretically save the listing-side commission, which historically ran 2.5 to 3 percent of sale price in Arizona — though this is fully negotiable post-NAR settlement. In practice, the savings are often offset by lower sale price: NAR data has consistently shown FSBO homes sell at a median price approximately 14 to 18 percent lower than agent-listed homes. Some of that gap reflects differences in property mix; some reflects pricing accuracy and buyer-pool reach. The honest answer is that FSBO can save money for sellers who have accurate market reads, qualified buyers already lined up, and the time to manage the transaction themselves.
A: FSBO sales most commonly underperform for three reasons. First, pricing errors: without continuous exposure to active market data, FSBO sellers often misprice by 3 to 8 percent in either direction, with overpricing producing the longer days-on-market that ultimately forces deeper discounts. Second, buyer-qualification problems: FSBO sellers may accept offers from buyers who cannot ultimately close, costing weeks of optimal showing time. Third, contract execution issues: missing disclosures, ambiguous contingency clauses, or earnest money handling errors that surface late in the process and cost five or six figures to resolve. These three problem areas account for the majority of FSBO-versus-agent-listed price gaps.
A: A listing expires when the listing agreement's term ends without the property having sold. The standard Phoenix-area listing agreement runs three to six months. When it expires, the seller and the listing agent are no longer contractually bound, and the seller is free to relist with a different agent, sell on their own, or take the property off the market entirely. Expired listings are tracked publicly in the MLS, which is how other agents identify them for outreach.
A: Most expired listings have one of three root causes: pricing was off (often 3 to 8 percent too high), the buyer pool couldn't qualify (especially in the current high-rate environment where conventional financing limits who can transact), or the marketing missed the target audience (less common than sellers assume - broadcast marketing rarely fails by lack of exposure; it fails by reaching the wrong audience). A diagnostic visit that reviews showing volume, feedback patterns, price reductions, and offer history usually identifies the dominant cause within twenty minutes.
A: Yes. Once your listing agreement has expired or been formally cancelled, you are free to engage any agent you choose. The new agent will file a new listing in the MLS as a fresh property record, though sophisticated buyers and buyer agents will be able to see the prior listing history. Repositioning the home with new photography, an updated description, and where appropriate a strategic price reset is usually more effective than simply relisting at the same price with the same agent.
A: Whether to lower price or change strategy depends on the diagnosis of why the home didn't sell. If pricing was the issue (no offers, low showing volume, consistent feedback about price), repricing usually solves it. If the buyer pool couldn't qualify (offers came in but didn't close, financing kept falling through), the answer is structural — consider seller financing or a different buyer-targeting approach rather than another price cut. If marketing missed the audience (decent showing volume but no offers), repositioning the listing — new photos, new description, fresh launch energy — can produce different results without dropping price. The right move is rarely just "lower the price."
A: A long-held Phoenix rental sold conventionally for cash typically triggers 25 to 35 percent of the gain in combined federal long-term capital gains (15 to 20 percent), Arizona state tax (4.5 percent), Net Investment Income Tax (3.8 percent if applicable), and depreciation recapture (taxed at the lesser of 25 percent or your marginal ordinary rate). Three legal structures can route around most of this exposure: an IRC §453 installment sale (spreads gain across years of note payments), a 1031 exchange (defers gain entirely by rolling into replacement property), or a hybrid structure combining elements. The right choice depends on whether you want to remain in real estate, exit cleanly, or optimize for tax.
A: A 1031 exchange is a tax-deferred swap of investment real property for like-kind investment property under Internal Revenue Code §1031. The seller defers the entire capital gain (and depreciation recapture) by reinvesting the proceeds into a qualifying replacement property within strict timelines: 45 days from sale to identify potential replacement properties, and 180 days from sale to close on the replacement. The exchange must be facilitated by a Qualified Intermediary who holds the proceeds between sale and replacement purchase. 1031 exchanges are particularly powerful for investors who want to trade up, change markets, consolidate properties, or transition to passive ownership via Delaware Statutory Trusts.
A: Depreciation recapture is the federal tax owed on the cumulative depreciation deductions a real estate investor claimed during their ownership period. When the property is sold, the IRS treats the depreciation as having reduced the property's basis and recaptures the resulting gain at a tax rate of up to 25 percent for §1250 property (most real estate). Critically, under IRC §453(i), depreciation recapture is recognized in the year of sale and is not eligible for installment-sale treatment. This means a §453 structure helps spread capital gains but does not spread recapture — making down payment sizing a critical decision for investor sellers.
A: iBuyers like Opendoor and others typically offer 5 to 10 percent below fair market value in exchange for speed and certainty of close. For investor sellers with significant tax exposure, the gap is even wider — because a cash sale to an iBuyer triggers immediate full tax recognition, while a structured listing using §453 or 1031 can preserve six figures of value. iBuyers can be the right choice for sellers who genuinely need to close in 14 days, are willing to absorb the price discount for that speed, and are not concerned about the tax structure. For most investor sellers with time and significant equity, a properly structured listing nets meaningfully more.
A: Maximizing net proceeds from a rental sale requires three coordinated decisions. First, the right pricing strategy - neither overpriced nor leaving money on the table. Second, the right transaction structure - cash sale, §453 installment, 1031 exchange, or hybrid - chosen based on your specific tax situation, time horizon, and whether you want to remain in real estate. Third, the right team - a real estate agent who understands creative structures, a CPA who can model the tax implications, and an attorney who can draft enforceable documents. The single biggest mistake investor sellers make is letting an agent who only understands cash sales lead the conversation. The structure decision is worth more than the marketing decision.
Justin Thorstad, PLLC is a licensed Arizona real estate Broker in Arizona, Department of Real Estate License #BR541826000 operating under Libertas Real Estate. All information on this website is provided for general educational and informational purposes only. Nothing on this website constitutes legal, tax, financial, investment, mortgage, or accounting advice. Real estate transactions involve significant financial and legal complexity. Before structuring any transaction - particularly transactions involving seller financing, IRC §453 installment sales, 1031 exchanges, or other creative structures. You should engage licensed qualified professionals including a licensed Arizona attorney for legal review, a Certified Public Accountant for tax planning, and a licensed mortgage loan originator if loan origination services are required. Market statistics referenced on this website are from publicly available sources at the time of publication. Real estate markets change continuously; historical performance is not a guarantee of future results. All transactions are subject to verification, market conditions, applicable law, and the satisfaction of all closing conditions. Equal Housing Opportunity.
© 2026 Justin Thorstad, PLLC. 602-348-8534 justin@libertasrealestate.com 250 N. Litchfield Rd. #261 Goodyear, AZ 85338. All rights reserved. · Licensed Arizona Real Estate Broker · Arizona Department of Real Estate License #BR541826000· Libertas Real Estate · Equal Housing Opportunity. Information on this site is for educational purposes only and is not legal, tax, or financial advice.