It is no surprise that real estate transaction dollar volume dropped in May. May closings were a result of March and April pending sales which were impacted by covid-19 and stay at home orders in Florida. Going forward, new pending sales have been strong, and top agents are having an exceptionally good year.
Dollar volume is the number of transactions multiplied by the average sales price. That number dropped from $569.1 million last year to $326.0 million this year. That is significant.
One of the things holding down sales is the limited inventory. The other is travel has been limited during this period from other states. That is not to say the motivated didn’t find a way to get here and purchase, but it did limit many. Properties at the lower to mid end have been doing well. Because of this, it has pulled the median price down .7% and the average price down 6.2%. I would not say prices are falling though. Right now, it is more of the mix of properties that are selling that is causing this.
We have seen this pattern before. When real estate transaction dollar volume drops, it is not long after that agents start looking for the exit door. These agents do not head directly for the door, they take a detour. First, they are attracted to low cost brokerages with higher splits and fees based per transaction versus monthly. It is an attempt to salvage their fledgling real estate career, and it does not work. They were struggling before the crisis, and the real estate transaction dollar volume drop exacerbates it.
The detour is simply a speed bump to slow down the inevitable. The exit door is approaching. Sellers should be leery of listing with an agent who does not have listing transaction experience and has not had recent sales. One question you might ask is, how long you have been with your current company? Another would be how have your sales been in the last two months?
If you are considering selling, we have a list of questions you should ask the Realtor you are interviewing before you sign any agreement. Another tell tale sign is when they agree to cut their commission. This tells you two things. Number one, they need a deal badly, and since profit isn’t a predominant factor, survival is, they may not be around by the end of the transaction. Secondly, if they cannot negotiate their own transaction, how in the world can you trust them to negotiate on your behalf? Lastly, if they say they can do it for less, you must wonder if they’re spending money marketing your home, or just relying on the price and MLS to sell it. If they don’t do anything for you, why pay them anything?
The whole point of using a Realtor is because they put more money in your pocket at closing than selling By Owner does, and that is a fact. Realtors spend money, and each has their own value proposition. If their value proposition is dropping, it means their value to you as a seller is dropping too.
Before you shortchange yourself and hire the least expensive agent you can find, call us, and explore the difference. If netting more in your pocket at closing is more important than the low fee you pay, we need to talk. Most people believe the less cost you pay the more money should flow to your pocket, and that makes sense. The only problem is it is not necessarily true.
Brett and Sande will answer your questions and show you how we are able to get more money for our sellers. In times like we are in today, experience matters. Put the experience of Brett and Sande Ellis to work for you. 239-489-40402 Ext 4 or email us Brett@topagent.com or Sande@topagent.com
We’re excited to talk to you! Good luck and Happy Selling!
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