For months we’ve been telling sellers it may cost them to wait when selling their home.  This is true for a variety of reasons, but the two most important are when you sell, chances are the home you’ll purchase to replace your current home is also increasing in value, and because rising rates affects your buyer and your next loan too if you’re getting one.

That’s not the purpose of this article though.  While sellers wait for the absolute highest prices on their home, they should keep in mind that prices won’t rise 12% per year forever.  We’re predicting another good season.  Inventory is low, rates are still pretty low, and demand is high.  However, demand begins to fall off at certain prices.  So we ask the question, has a seller slowdown begun in SW Florida?  Let’s take a deeper look.

If you look at the graphs, you’ll notice that typically home prices peek around April each year and again in June.  Many times June is even better than April.  This year, we saw the peak in April but didn’t see the 2nd peak in June.

Has a Seller Slowdown Begun in SW Florida

Furthermore, homes closed in SW Florida usually peaks around May, and then we see some strength in July-August, albeit not quite at May levels.  This year August numbers fell off.  This could be due to lower inventory levels, but it could also be the start of a trend.

Has a Seller Slowdown Begun in SW Florida

We’re cautious not to read too much into any one month period, and moving forward this will be especially true as new Federal lending and closing guidelines will extend financed closings out longer.

Cash sales in August for single family homes were 37.4%.  This was a 20% decline from the previous year.  This is good news as financing has helped push prices higher.  We always said this market will not be fully healed until financing and capital comes back into the market.  We have that now, but with that come appraisal issues and closing delays.

We think we’ve got an excellent market.  Buyers are shopping though and are price sensitive.  Even with low inventory, if a property is over-priced buyers are sitting on the sidelines.

October begins the start of Season.  Last year we saw an uptick in buyer activity in October.  It used to be said Season was January-April but it’s started earlier.  We think we’ll have another great season, but sellers may not want to wait much longer.  The graphs may be a sign of things to watch, or they could just be a temporary blip.

Some economists are talking about recession starting in 2018 while others are talking about the end of 2016..  Nobody can predict accurately when a market will bottom or when it will top, but looking back there are generally signs that foretold the future and they were ignored.  People tend to follow the herd and ignore signs because when it’s all good, they want to believe.  And when a market is near bottom, nobody wants to believe it’s over until they see proof.  Thus, people usually miss the top and the bottom because they wait until they see the change on paper.  For this reason, most people will absolutely miss the top and the bottom unless they just get plain lucky.

Bottom line is we’ve got a great market.  Just don’t get too greedy and over-price your home.  Over-priced homes sit in any market, and you don’t want to look back and say I missed another boom market like 2006 simply because I got greedy again.

If you’d like to search the MLS, you can do so.  If you’re thinking of selling, it pays to talk to the Ellis Team at RE/MAX Realty Group.  Our sellers net about $10,000 more than the average seller.  Call us and find out why. 239-489-4042

Good luck and happy house hunting!

Featured Property of the week!  102 Maple Ave S in Lehigh Acres FL

Check out all the Ellis Team Featured Listings

 

If you read our article on a regular basis you know about the new Federal regulations about to go into affect beginning October 3rd. After studying the new regulations in depth we’ve put together some Best Practices to help people understand what’s about to happen.

Lending Delays About to Get Real Next Week

New regulations affect closings on financed deals only, 1-4 units residential and multi-family. This will not affect cash deals, so financed buyers will need to work with an experienced agent who understands the changes to make your offer look as Best as it can. Otherwise the seller will just go with cash deals.

Listing agents need to really investigate the new rules to protect their sellers. Gone are the 30 day closings. Plan on 45-60 days now, and if there are changes it can be even longer. Here are a few things you can do to avoid re-disclosures and costly delays to your closings. Lending delays about to get real next week.

1. Make sure buyer obtains a 60 day rate lock up-front. In a rising rate environment, if the lender fails to meet the 30 or 45 day rate lock it will trigger a re-disclosure to re-lock the rate. This new time frame could extend your closing up to 10 days or so.

2. Have seller pre-pay their condo and HOA fees. The title company may be forced to acquire a new estoppel letter if the closing is delayed a few days. This happens at the end of a month or quarter. If the new numbers affect the borrower, it could trigger a re-disclosure, which could delay closing up to 10 days.

3. If new extended closings occur before the 5th of a new month, it may not trigger, but after the 6th it can change the borrower’s cash-to-close which can trigger. Dates will become critically important under these new regulations.

4. Have two walk-thrus. A preliminary walk-thru for any repair type items and a final walk-thru solely for the purpose of making sure everything that was supposed to stay with the home is there and for any damages by seller moving out. You really want any repair items fixed well enough in advance and accounted for as new closing and lending disclosures must be accounted for well before closing.

5. Agents will no longer see all the charges to the buyer. The borrower may wish to share this document with your Realtor ASAP so if you’re being over-charged by the HOA, Title Company, or lender it can be spotted quickly.

6. There will not be a unified closing statement on financed deals anymore, so your agent won’t be able to see all the charges to the borrower. The seller charges will be seen, but not the borrower’s.

7. Not all agents will know about the changes. If the agents don’t know, how can the consumer be expected to know? Be sure to work with an agent who does several transactions and is current on lending changes.

8. Communication will be key. Listing agents should call the loan officer before seller accepts a deal with financing. The loan officer may not be able to share with buyer agent everything but a skilled listing agent should be able get the required information. Agents, lenders, title companies, and customers must communicate to avoid costly delays. One delay can create others due to new waiting periods.

9. New sales contracts are coming out soon. We intend to scour the contract for changes as we anticipate several issues that will occur because of new regulations and we want to see how they’re addressed. Otherwise they may need to be addressed by addendum.

For more information, you can review past articles on how the time lines work on our blog at http://blog.topagent.com Just search for TRID

To see all the homes listed in MLS, feel free to search like a realtor on our MLS search site www.LeeCountyOnline.com

Good luck and Happy House Hunting!

 

Be sure to check out SW Florida’s Featured Properties of the Week.

Many are speculating that the Fed is going to raise interest rates sometime between September and November.  They were all set to raise rates this month until the Chinese markets took a tumble.

Rising Interest Rates a Double Whammy For Sellers

Most people believe the US is in trouble because China owns so much of our debt.  It’s true, China did buy up some of our securities but this was really a hedge to prop up the Yuan.  China has been playing financial games for years.  Their economy isn’t as strong as many would have you believe.

Mortgage rates are more closely aligned with the 10 year note.  Even if the Feds raise interest rates it may not move the 10 Yr note much.  So it’s not automatic mortgage rates will rise substantially.

If they do, sellers could be hit the hardest.  Here’s why.  For every 1% rise in rates, a buyer’s purchasing power decreases about 11%.  This limits the amount of buyers who qualify for your home.  But here’s the kicker.  Most sellers go on to buy another place and a large percentage finance their next home.

Rising Interest Rates a Double Whammy For Sellers

So not only does the buying pool shrink for your existing home, but the borrowing costs on your next home increase as well.  You now qualify for less on your next home, and if you do still qualify for more, that payment will cost you much more.  Over 15 or 30 years that extra payment per month adds up.

Waiting to sell and hoping to get an extra $10,000 on your existing home might cost you $50,000 in higher interest payments.  And when rates rise, the appreciation of homes may slow as well because fewer buyers can afford higher payments.

Right now we sometimes have more than one buyer for many homes on the market.  When you start limiting the buyer pool with higher rates, this could change.  It may take some sellers longer to sell.  Some sellers may have to reduce their price when the buyer pool shrinks.

There are a lot of wildcards when it comes to interest rates.  We won’t even get into inverted yield curves and other factors.  Suffice it to say that the world market is complicated and rates could rise one of these days.  Near zero percent interest rates by the Fed is not normal and will end someday.

Sellers tend to hold onto their property because they feel it may gain in price.  Chances are, if your home is going up in price, the next one you’re going to purchase is too.  And if you’re going to finance it, there’s your triple whammy.

Bottom line is waiting may cost you more money than you’ll save by eking out those gains.  Nobody blames you for getting all you can for your home; you should.  You just may want to weigh what waiting will cost you if you’re going to purchase another home to replace the one you’re in.  You also must weigh the carrying costs.

Some sellers are hoping their home goes up $10,000 in the next year, but between utility bills, property taxes, maintenance, HOA fees, mortgage payments, home insurance, flood insurance, etc. they find it costs them much more to carry the home than the predicted gain.  And that’s assuming an air conditioner or roof doesn’t go bad.

If you’re considering selling, find out how the Ellis Team puts an additional $11,892 in your pocket at closing versus the average Realtor.  We’ll be happy to sit down with you and show you how much to expect.  We can even help you find your next home if you’re staying in the area.

If you’re a buyer and would like to search the MLS like a Pro, visit www.LeeCountyOnline.com  You can save your search and the system will email you new homes entering the market as well as price changes when they occur.  You can setup multiple searches too.

Good Luck and Happy Home Selling-Buying!

 

Featured Home of the Week

Reflection Lakes  condo overlooking the lake.  Fully furnished.

View All of Ellis Team Featured Listings Here

You can always call us at 239-489-4042 and speak with us to find out how we can sell your home or find your dream home in SW Florida.

In the real estate industry one of the metrics agents use to measure their success against the market is the List Price/Sale Price Ratio.  We know that the sooner the seller prices their home to the market the quicker it will sell and for more money.  Overpricing simply insures it stays on the market longer and sells for less money later on.  While this may sound counter to logical thinking, it is a truth known in the industry and born out by statistics.

The Realtor recommends the price, but the seller chooses which Realtor to hire and which price to list at.  While the seller sets the price, the market determines the value.  If it is overpriced it will languish on the market.

Could Choosing the Wrong Realtor Cost You Money

Assuming you have a home that is priced appropriately, there are statistics to measure the market and the average agent’s effectiveness.  For instance, the average agent selling a single family home in Lee County Florida in July of 2015 did so at 94.5% of asking price.  In other words, the buyer received 5.5% off asking price on average.

Could Choosing the Wrong Realtor Cost You Money?

We’ve been monitoring this statistic over the course of the last year and by and large it’s been running about 94%.  It can vary a little bit each month.  And we know over the years the Ellis Team averages around 97-98%.  We recently pulled up our sales in the last year and it ran 98.02%.  That’s about a 4% difference for the year and 3.52% over July’s official numbers.

So how much is 3.52%?  Well, with an average sales price of $337,848 it works out to $11,892.  The perception is all Realtors are the same, so what would account for almost $12,000 difference in net to the seller?

3 things influence how much a seller receives at closing.

  1. Negotiating skills-The skills of the Realtor you hire make more of a difference than you might think. It doesn’t matter how strongly your agent says the price is firm or argues your position.  What matters is how well your agent works with the other Realtor, how much information they gain on your behalf about the buyers ability to pay, motivation, etc.  Your agent should also evaluate your position in the marketplace to see where your home stands.  This tells you what cards are in your hand and how you should play them.
  1. Marketing- Effective marketing brings more interest, and more interest brings the seller more money. Many times an agent can create multiple buyers and the seller can select from the strongest of the offers.  Advertising in several places such as print, online, social media, etc, can pay off big for the seller.
  1. Secret Sauce- All Realtors have or should have a Unique Selling Proposition. It’s your job as the seller to determine if the agent knows what they’re talking about and if that proposition actually works.  Our team has come up with a home selling system so remarkable that it helps us sell homes fast and for top dollar.  It is based upon interviews with Top Realtors from all over the country and our own proprietary marketing methods.  We no longer share all the details of this system but we’d be happy to sit down and show you many of the parts so you can decide for yourself.

The real proof is in the results, not the proposition.  When you’re interviewing agents to sell your home, look at their past sales.  Evaluate their List Price/Sale Price ratio.  Ask detailed questions.  Have a conversation about negotiating.  If the agent’s strategy is simply to say the price is firm, you might want to ask more questions.

Have the agent explain in detail the recommended price for your home.  Is the strategy to test the market or do they know what it should sell for?  If they don’t know, how are they going to sell it to a buyer?

If you’re thinking of selling, we’d be happy to talk to you.  You can call us at 239-489-4042 to set up an appointment and see if working with us can net you more money at closing.

Good luck and Happy Selling!

You can search the MLS like a Realtor

Featured listing of the week- Riverfront Home.

 

Official sales numbers were just released today  and as expected record sales lead to higher prices and lower inventory in SW Florida real estate market.

Record Sales Lead to Higher Prices and Lower Inventory in SW Florida Real Estate Market

 

Single family home sales were 1,315 which were a 26.2% increase over last year’s numbers.  Keep in mind our inventory levels stand at 4,311 now compared to 4,918 last year.  We’re down 12.3% in inventory and sales are up 26.2%.  It’s no wonder there has been upward pressure on prices.

New pending sales were up 6.3% in July in what could be a good sign for August and September closings.  Total pending inventory was down 2.9% but that doesn’t mean much.

Fort Myers Florida homes Cape Coral real estate

Last week we reported unofficial sales price numbers and we said the official numbers were going to be good.  They’re even better than we reported and we’ll feature that in next week’s article.

Our buyer specialists have been very active in this market.  We’ve recently landed several homes for our customers.  In a low inventory market the secret is getting to them fast and finding where the hidden pockets are.

We’ve identified several listings that are mis-categorized in the MLS by the listing agent so they’re not getting the traffic they should.  This generates opportunity if you know where to look.  If you’re a seller you don’t want this but as a buyer you look for opportunities wherever you can find them.

We also look for recent price reductions.  Sometimes sellers are over-priced and when this happens the property will not sell.  A property is freshest to the market when it first comes on.  After about 21 days on the market it gets passed over. This can be unintentional.  Buyers subconsciously feel the home is stale to the market and figures it’s over-priced or something is wrong with it if it doesn’t sell in first month or so.

Some of these listings get forgotten about.  While it is better to price correctly upfront, some sellers have to test the market, or perhaps they’re not as motivated Day 1 as they are later.  For whatever reason the property sits on the market, and when the price is reduced it’s not always noticed.  Buyers looking in that neighborhood see the sign, but they no longer call on it or check up on it after awhile.  They lose interest.

That’s why our MLS search site is so important for buyers.  When a buyer saves a search the system will email any changes in that search result.  If a new property comes on the market, our buyers find out about it.  If an older listing reduces their prices, our buyers know right away.

It’s a great way to stay on top of the market and beat out other buyers to new or changed listings.  In a low inventory market, these tips can produce big results.  Four of our buyers in the last month scored the home they were shopping for using one of these techniques.

Technology is great, but there is no substitute for meeting with a great agent and sitting down and going over your needs.  Buyers are frustrated out there and they’re calling us because they’re tired of losing out on homes.

While we can’t guarantee to get you your first choice in a multiple offer situation, we can put your offer in its best position by using a few inside tips we’ve developed over the years.  Put our team’s experience to work for you.  It could make the difference between owning your first choice or your 5th choice, and not owning one at all.  We’d hate to see you rent another year.  Rents have climbed so high many times it’s more expensive to rent than to own.

Visit our SW Florida MLS search site and our phone is 239-489-4042.  Lets us know how we can help you!

 

Check out our Featured Property of the week.

Riverfront home in SW Florida
Riverfront Home

Click here for Details on this Riverfront Home

Of course, feel free to call us at 239-489-4042  We’ll be glad to help you buy or sell.  Good luck and Happy Selling!

Southwest Florida Real Estate Video Market Update