We get a lot of questions about the standard residential purchase contract versus as-is agreement.  Let’s go over the differences and how each should be used.

Standard Residential Purchase Contract Versus As-Is Agreement

First off, the seller is required to disclose known defects regardless of which contract is used.  In the old days agents always used the standard purchase contract which provides for automatic repairs of certain items.  There was always a fight about what was covered or not, so the contract was cleaned up and made more precise.

Standard Residential Purchase Contract Versus As-Is Agreement

Since the foreclosure crisis it’s become common practice to use the as-is agreement.  The as-is agreement has no automatic repair provisions, so it allows the buyer to cancel for any reason.  What invariably ends up happening is a fight about repairs.  Buyers get ticky-tacky about little things and demand they are repaired.  The seller says no, it was sold as-is and we’re not doing it.  The buyer walks and finds another property.

Meanwhile the buyer is out the inspection costs and starts all over.  The seller had their home off the market for 10-15 days and lost marketing time.  If the buyer wasn’t prepared to accept minor issues they should not have written an as-is contract.

Under the standard contract the seller is responsible for repairs up to 1.5% of purchase price for items like roof, water damage, heating, cooling, plumbing, septic, etc.  Cosmetic conditions are not covered.  And yet even with as-is contracts buyers ask for cosmetic repairs and get turned down and are left searching for another home.

Buyers are Fearful

Buyers are fearful the problems are bigger than they are, or that costs will mount.  Buying a home is an e emotional event, and fear often gets the better of buyers.  The time to talk about all this stuff is before they purchase a home.  Once buyers know what to expect, the process becomes much easier for them.

Sellers are emotional too.  They often feel like the buyer got the better of the deal in negotiations, and now they want stupid repairs on top of it!  You can hear their frustration the minute we present them with repair issues.  The as-is contract was supposed to cure all this and make contracts simpler and less argumentative.

People are people, and no contract is going to suppress the emotions of fear and greed.  So long as this is reality, it might be best to consider using the standard contract which addresses certain issues quite well.

Agents Should Counsel Buyers and Sellers

At the very least agents should be counseling buyers and sellers up-front as to expectations and the process once an offer comes in.  If buyers and sellers are properly educated, the emotions are tamed, and the experience of the agent takes over.  Each side has confidence they are being treated fairly and according to protocol.

This is one more reason for sale by owners have such a difficult time selling on their own.  They don’t have anyone counseling them on how to act and feel.  More importantly, there isn’t a neutral party the buyer trusts counseling them on how to feel and act either.  Invariably the deal blows up and both sides are more frustrated than ever.

Agents, have upfront consultations with your buyers and sellers.  If your buyer is skittish or emotional, consider using the standard contract.  It will keep more deals together for you as the contract is specific about what is covered.  The as-is contract is like the old Wild West, and in the Wild West anything goes.  And usually somebody dies.  Don’t let your contracts die needlessly.  Rely on your agent’s wisdom and experience to get through these issues.  Hopefully both sides are using an experienced agent.  Learning on the job is not fun for buyer or seller.  Experience matters.  Either use an experienced agent with hundreds if not thousands of transactions experience, or someone on a team who has access to all that experience from a team leader.  Experience isn’t costly, it’s priceless when you need it.

If you’re looking to buy or sell, always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit our website www.LeeCountyOnline.com for more tips.

Ellis Team Weekend Open Houses

Parker Lakes

Open Saturday 1-3 PM

Parker Lakes Ellis Team Weekend Open Houses
Parker Lakes – Gated Community

14811 Crystal Cove Ct Unit 1102

How Much is Your Home Worth?

 

How Does Financing Impact Cost of Ownership?  We’ve found that three items have the largest impact on the cost of ownership due to financing.

The most talked about are the amount financed and the rate.  For a moment, let’s talk about creating real equity while thinking like an investor. Payments are lower on 30 yr loans than 15 yr loans so most people choose the lowest payment.

How Does Financing Impact Cost of Ownership

What if you could afford the payment on a 15 year loan?  Would it make much of a difference?  If you look at the sample chart, a 30 year loan pays down about 25% of the original loan in 15 years compared to 100% on a 15 year loan.

How Does Financing Impact Cost of Ownership?

Let’s say you have a $250,000 loan at 4.125%.  The P&I (principal & Interest) portion on a 30 yr loan is $1,211.62  That same loan on a 15 yr is $1,864.92.  But wait, there’s more.  15 yr loans carry less interest rate.  Currently 15 yr loans are at 3.5% which brings the payment down to $1,787,21 That’s a $575.59 difference per month but the law of compounding saves you much more than that.

Over 15 years you’ll pay $575.59 more per month which equals $103,606.20.  However, if you finance for 30 years you’ll still owe $162,423.19.  That’s already a difference of $58,816.99.  This assumes you have the money to payoff the mortgage in 15 years.  If you don’t you’ll continue to finance it.  If you do this for the full 30 years you will have paid back the $250,000 original loan plus an additional $186, 184.76 in interest for a grand total of $436,184.76

Had you financed this for 15 years you would have paid back the original $250,000 plus $71,697.14 for a grand total of $321,697.14  That’s a lot less than $436,184.76.  In fact, it’s $114,487.62 less.

If you have the wherewithal to finance for less time you might wish to consider it.  If you’re disciplined you might consider taking out 30 yr loan and paying like it’s a 15 yr loan.  However, you will pay .625% more in the rate and it will require discipline.

The other two factors besides length of loan is the rate and the amount financed.  A good agent can help you with both.  Knowing which lender is best for you requires some knowledge.  Each borrower has a unique set of circumstances.  Some lenders offer better rates on FHA loans than others, while some lenders specialize in conventional loans.

We have lenders that offer bridge loans, construction loans, FHA, VA, USDA, bond programs, lot loans, portfolio loans, investor loans, and foreign national loans.  If all this sounds confusing to you, you need to work with an agent that can point you in the right direction.  Sometimes as agents we don’t know your full situation.  This is why we work with lenders we can trust so we can point you to the right program for you.

Knowing the right people and who you can trust makes all the difference.  An agent might negotiate a few thousand off the purchase price for you, but if you choose the wrong lender you can pay it all back and then some simply by choosing the wrong loan.

Most buyers focus on price of the home.  We like to look at total cost of ownership.  This includes price, rate, taxes, and other fees like HOA or condo fees, CDD’s, etc.  This way you can make a fully informed decision and make that dream home become a reality.  We hear stories where that dream home turned into a nightmare home because the buyer didn’t understand the full scope of the purchase.  We want you fully informed.

You can search the MLS like a pro at www.LeeCountyOnline.com  It’s the best property search website in SW Florida.  However, please talk to an agent on the Ellis Team before you purchase.  Not using us could cost you thousands.  Our agents offer peace of mind.  239-489-4042.

Ellis Team Weekend Open Houses

13235 Whitehaven Ln

Brookshire  $138,500

 

Huge Opportunity to Sell After Hurricane Irma

It’s a few weeks after hurricane Irma and already we see Lee County sellers enjoying inventory supply advantage the first week of October.  Last week we told you that the hurricane could become a tremendous opportunity for SW Florida home sellers.   Inventory was already low at 4,666 at end of August.  We predicted a possible 10% decrease in inventory which would take us down to 4,200 listings.  This week single family inventory stands at 4,248, so that assumption has come true.

Lee County Sellers Enjoying Inventory Supply Advantage

In the last 24 hours 73 new listings have come on the market, while 76 went pending.  This tells us that early in the week more people are buying than deciding to sell.  If this continues, inventory will fall even further. Each year, many home sellers decide to sell in January.  I guess they think somehow, it’s a better time to sell as more visitors are here beginning in January.

It is true, we will have more people here January through March.  It’s also true that those visitors will have many more listings to choose from than they do now.  So as a seller, is it better to sell in season, or now?

We believe it may be better to sell now.  We have lots of buyers ready to purchase now.  We have low inventory.  Buyers just do not have the choices now that they will have in season.  Sure, there are lots of buyers that do not have to buy now.  They can wait for more choices.  However, some do not have that luxury and need to buy now.  Isn’t it always better to sell when people need to buy and there isn’t much to choose from?

Imagine the stores just before the hurricane.  If you got there late and there were only a few cases of water, did you care what brand it was?  Did you care if it was 50 cents more than the brand you usually buy?  No, you needed water.  You recognized scarcity and what it would mean if you didn’t buy it.

If you are thinking about selling, you are a store right now and the shelves are kind of empty.  Maybe not completely empty, but definitely not full.  In January, those shelves will have more on them.

If prices go up in the next 3 months, many of those potential buyers may become lookers.  If you think there are lookers in this market now, wait until season.  Just because the roads become clogged doesn’t mean everyone here wants to buy.  Many look, and look for years.  If they don’t see SW Florida as a bargain, they may not buy.  If prices go up in the next 3 months, we may not look like a bargain.  And who wins if that happens?  The sellers who decided to sell when the shelves were bare and the buyers needed to purchase.

Nobody knows how the market will be next season.  We do know the market today, and there are opportunities.  The data agrees.  Please call Brett or Sande at 239-489-4042 to see how much we can sell your home for and how much you would net at closing.

If you’re looking at buying, speed is key in this market.  www.LeeCountyOnline.com is the fastest real estate search engine.  It has all the listings and is updated every few minutes, which is key when you’re competing against other buyers to score that dream home.  Always call and Ellis Team agent and we’ll help you locate and close on your dream home.  Finding it is one thing.  Actually buying it and closing it is another, and that’s where our agents shine.

We look forward to helping you buy or sell.  Let us know how we can help you.

Ellis Team Weekend Open Houses

Heritage Cove Open Saturday 1-3 PM

 

Kelly Greens Golf & Country Club Open House Saturday 1-3 PM

View All Reflection Lakes Fort Myers Homes For Sale

See Spotlight on Reflection Lakes

Now may be a good time to sell your Southwest Florida Home.  We have buyers who need housing after Hurricane Irma.

Official SW Florida real estate statistics were just released for August and one thing that stands out to us is the drop in inventory.  This leads us to believe now is an excellent opportunity to sell SW Florida real estate after Hurricane Irma.

Inventory was falling pre-hurricane Irma.  We suspect some homes on the market were damaged. If 4,666 were on the market prior, and assuming 10% sustained damage, that would take us down to 4,200 homes.

Excellent Opportunity to Sell SW Florida Real Estate After Hurricane Irma Housing Inventory

Additionally, there are many displaced homeowners and renters in the Bonita, Buckingham, and San Carlos areas that need housing.  Flooding was an issue in these areas and some homes are uninhabitable.

Excellent Opportunity to Sell SW Florida Real Estate After Hurricane Irma

After Hurricane Charley in 2004 we saw an increase in home sales.  Buyers competed for properties because people needed housing.  The same scenario could very well play out in 2017.

Our phone has been ringing from buyers and investors looking to purchase.   We filter out the sharks that want to come in and buy up property for pennies on the dollar.  They are unrealistic and they do not care about people.  They seek opportunity.  Perhaps there will be opportunity for them with the flooded out and heavily damaged homes.

We focus on homeowners and investors who acknowledge there is a need for housing and are seeking solutions to meet that need.  If your home in uninhabitable, you need housing now.  They need a home that meets their needs, and they can’t be choosy if it has everything they’d want.

Some homeowners may decide they’ve had enough. Owning a 2nd home and preparing for storms can be tough, especially if they find they’re just not using and enjoying the home right now like they thought they would.  Circumstances change.  Other buyers are looking to purchase here because they’re at a point in their life where they will come down and enjoy the home.  Enjoying a 2nd home is a cycle, and depending where you are in that cycle makes all the difference whether it’s a good time to buy or sell.

Thinking of Selling?

If you own a home and you’re thinking of making a change, please call us at 239-489-4042.  Ask for Sande or Brett.  We’ll be glad to walk you through your options.  We can tell you how much we can sell your home for, and how much you would net at the closing table after paying off all mortgages and expenses.  Then you can decide if it makes sense to sell.  Or, you can see how much your home is worth online for free!

Selling is more fun when there is less competition from other sellers.  We have low inventory right now, and in about a month we’ll see if we lost more.  Demand probably just picked up as well, so a hurricane can be a perfect opportunity for home sellers, if they’re marketed properly.

Thinking of Buying?

If you’re a buyer, scoring a home right now can be tough.  There are several buyers looking for similar listings and not enough to go around.  You can call the Ellis Team and speak with our buyer specialists who are experts at making offers look more attractive than other competing offers to the seller.  This can be the difference between buying your 1st choice or settling for your 5th choice, if there even is a 5th choice.  Many times there are just a few homes that meet your needs on the market.

In a race against other buyers, speed wins.  I’d recommend searching at www.LeeCountyOnline.com  Our database has the entire MLS, and is updated every few minutes.  Don’t waste time using sites that don’t have accurate or timely data.  We get calls all the time from frustrated buyers who see something on a big website only to found out it was sold months ago.

Always call the Ellis Team at Keller Williams Realty Fort Myers & The Islands.  239-489-4042.  We’re here to help.

Weekend Open Houses

Bell Tower Park Open House

Olde Hickory Open House

I recently read an article in USA Today about how the housing inventory shortage nationwide reached 20-year low and how it’s affecting the market.  While every market is local and is influenced by its own factors we do not work in isolation of other markets.  Therefore, national stats are also of interest to us.

For instance, if the economy is down nationwide chances are it’s affecting us here in SW Florida.  Additionally, if snow birds have a hard time selling their properties up North, they may not all be able to purchase down here.

Housing Inventory Shortage Nationwide

The article mentions there is a 4.3 month supply of homes on the market nationwide.  Locally we calculate the supply to be 4.22 months, so we’re pretty similar to national statistics.  One of the reasons mentioned in the article for the tight supply is that baby boomers aren’t likely to move in the next year.  78% of baby boomers are happy with where they live, and baby boomers own about 33 million homes.

While many baby boomers would love to move to Florida or Arizona, some are reluctant to leave family and friends behind.  While this is mentioned in the article, it’s not a trend we’re seeing locally.  It appears to us now more than ever baby boomers are eager to move and family isn’t holding them back.  Of course, we tend to deal with those that are contemplating making the move versus those that never would.

Millennials have started purchasing recently which will add to tight supplies.  We believe as baby boomers age they will begin to think about smaller homes, homes in warmer climates, or homes that meet their needs due to health reasons.  Not every baby boomer will appreciate a 2 or 3 story home up North.  Once they decide a 2-story home is no longer their best option, they may consider whether staying up North is too.  It opens the whole gamut once a move is considered.

Thankfully builders are building again.  Unfortunately, most buyers don’t know all the building developments available to them, nor which ones are offering incentives and discounts.  Most buyers don’t realize they get a better deal through a realtor than they do walking in on their own.

If they walk in and ask that question the answer will be it’s the same price whether you’re represented by a Realtor or not.  They may not tell you about incentives, and they certainly won’t tell you about competing builders in other neighborhoods.

We’re getting early word that the Fed will scale back it’s $4.5 Trillion in bonds beginning in September.  This will raise interest rates.  If rates go up we could see a buying frenzy followed by a reduction in the rate of growth in home prices.  Nationwide the S&P Core Logic  Case Shiller home price index was up 5.6% due to low inventory.  Rising rates could curtail that growth.

Either way we need more homes.  The economy is doing better and people are buying.  If you’re thinking of selling, you might want to cash in before the stream of sellers enter the market.  You can see from the chart inventory is lowest in the summer and picks back up again starting in September/October.  Why compete with all the other sellers next season when you can have them all to yourself now?

If you’d like to talk about selling your home, please call Sande or Brett at 239-489-4042 Ext 4  Or you can go to www.SWFLhomevalues.com and find out your home’s value for free in minutes.

If you’d like to search for your next home check out www.LeeCountyOnline.com  Our team can help you find your next home and sell the one you have, making it a smooth transaction.

Always Call the Ellis Team at Keller Williams Realty!  We’re here to help.

Ellis Team Weekend Open Houses

Open Saturday 1-4 PM

1339 Longwood Dr

4 Bed, 3 Bath, Waterfront Pool Home Between McGregor and River

Waterfront Pool Home-Minutes to River

Open House Sunday 1-4 PM

4351 Pine Rd

4 Bed, 3 Bath Plenty of Room for RV or Boat on Property $325,000

Estero Home Perfect for RV

 

Let’s start with what we know and work backwards.  Homes priced $200,00 or less are flying off the shelves with multiple offers.  Homes up to $250,000 are as well in some neighborhoods, but not all.  This assumes the home is in good condition and priced correctly.  So, you might wonder why we’re asking the question, are changes brewing in Southwest Florida real estate market?

Buyers are still buying; however, we’re noticing they’re price sensitive now.  Prices have gone up so much perhaps it’s testing the limits of what buyers can or will pay.  Sellers are counter-offering offers and buyers aren’t just accepting that.  They are negotiating back and forth until both are happy. Some buyers are walking from counter-offers.  We’ve seen this over the years and it appears it’s no longer a seller’s market across the board.

Changes Brewing in Southwest Florida Real Estate Market median time to contract

The numbers from June seem to bear that out as well.  The median time to contract jumped 7 days in June from May’s numbers, and 9 days from last year.  It’s taking longer to get contracts on houses.  It’ll be interesting to see July’s numbers in a few weeks.

Changes Brewing in Southwest Florida Real Estate Market Median time to sell

Median time to sale also jumped to 117 days.  That’s a 11.4% increase from last year.  New listings are up 5.8% and new pendings were down 1.6% from last year.  Could these be leading indicators for sales in months to come?

So, what’s the takeaway here?  Sellers need to take a good hard look at their price and make sure they’re competitive.  If your home has been on the market awhile, it may be time to re-evaluate where you stand.  New listings could have come on the market and become instantly more attractive than your home, or other sellers may have reduced their price.  Both events can affect you.  Sometimes as little as $2,000 in some sub-markets can be the difference between selling and sitting.

We are in a price sensitive market, primarily because prices have risen and stretched home buyers thin.  They simply can’t purchase as much home as they could have a year ago.  We warned buyers this would happen.  And we’re warning sellers not to get too greedy now.

Prices are good.  Buyers are buying.  We don’t have a runaway market where the seller gets to dictate all the terms.  Buyers and sellers are on even ground right now, and price matters.  Sellers, you’re not in competition with the buyer.  You’re in competition with all the other sellers out there competing for your buyer.

Buyers, same thing.  You’re not in competition with the seller.  You’re in competition with all the other buyers out there for the best properties.  The best valued homes always sell fast. You don’t want to be late to the table and eating scraps when you could have had the best.  Be prepared. Get your financing in order so you can jump when that property hits the market.

To take advantage of opportunities in this market we’d suggest sitting down with us and going over your objectives.  As a buyer, we can show you the best homes and eliminate the rest. Wasting time on the junk takes away time looking at the good stuff.  That can be the difference between success and failure.  Let an Ellis Team professional work with you and save you time.  We have some other tips for you as well that we’ll save for when we meet.

Sellers should have the same sit-down with us.  We’ll educate you on the market, look at your competition, and show you how we market better than anybody.  This can be the difference between selling and sitting on the market.

Feel free to search homes at www.LeeCountyOnline.com  Our database comes directly from the MLS and is always up to date, unlike some of these other sites with bad or outdated data.

You can always call us at 239-489-4042  We’d love to help you buy or sell your next home in paradise!

Ellis Team Weekend Open Houses

Open Sat 1-3 PM

13812 Lily Pad Cir Gate 2 Reflection Lakes

Reflection Lakes

13812 Lily Pad Cir

3 Bed, 2 Bath, 1,474 SQ Ft 2 Car Garage-Gated Community

$250,000

 

Open Sat 2-4 PM

Lakefront Condo with 2 Car Garage

Fisherman’s Cove

10081 Lake Cove Dr Unit 101

3 Bed, 2 Bath 1,564 SQ Ft 2 Car Garage

$227,500

 

Open Sun 1-4 PM

Daniels Park 3 Bed + Den

Daniels Park

14011 Danpark Loop

3 Bed, 2 Bath 1,830 Sq Ft Gated Community

$275,000

Some agents say the number of home sales is up.  Some say it’s down.  The data show 2017 SW Florida home sales trending between 2015-2016 levels.  As you can tell by the chart, home sales fell off the 2nd half of the year the past two years.  Home sellers wishing to sell now might get a little nervous reading this chart, but don’t be.

In fact, this can be good news for home sellers.  We’ll let you in on a little secret.  There were 2,001 fewer listings last August than there were this February.  Some sellers make the decision to sell in season because an agent told them there were more home sales in season.

2017 SW Florida Home Sales Trending Between 2015-2016 Levels Homes Closed

It’s true, there were more home sales in season.  However, there were more homes to sell too.  When inventory goes down home sales go down.  Not because there isn’t demand, but rather because product isn’t there to sell.

If you’re a home seller contemplating selling, the end of summer and fall can be an excellent time because you’ll have less competition from other sellers.

2017 SW Florida Home Sales Trending Between 2015-2016 Levels Median Sales Prices

The median sales price is up 7.6% in June over last year, and the average sales price was up 6.1%. Not too shabby.  You can wait until season to sell your home, and there might be more lookers for your home.  There will also be more competition from other sellers for those lookers.

We’re seeing new construction coming in and competing now too, which is good in a way for sellers because many local sellers don’t want to sell until they know where they’re going.  Local sellers just couldn’t find an appropriate home to move into even though they’d like to make a move.

We can help with that.  Our team knows about several new communities and builders the public doesn’t always know about.  Why?  Because builders don’t advertise like they used to, so buyers don’t know where to find them.

Even when buyers do stumble on a builder or new community they don’t know if it’s a good deal.  That’s where a professional agent comes in.  Builders advertise to agents because they know we can bring in repeat business.  We find out about deals and incentives the public doesn’t hear about.

If you’re looking to make a move but you don’t know where, a free consultation with a friendly and informative Ellis Team agent might just do the trick.  We can show you how much we can sell your home for and what you would net out after sale paying all expenses and mortgages.  We can then calculate how much you’ll have to put down on the next home, and what you can buy for a similar payment.

Perhaps you’ve had a promotion, or perhaps a loss in income and you’d like to downsize.  Either way, you want a great home for the value.  We can help with that.

If you’d like to take your time and search on your own, try out www.LeeCountyOnline.com.  You can search all the homes for free and even find out what your home is worth.  If you’d like to sit down and talk to us, you can call us at 239-489-4042.  Brett and Sande are easy to talk to and we like to answer questions and solve issues.

We know buying and selling isn’t always as simple as picking up the phone and going shopping.  There are many factors to consider, and timing it all can be important.  We’re patient and helpful.  If you’d like to discuss your options, we’d love to talk.   Always call the Ellis Team at Keller Williams Realty!  We’re here to help.

Ellis Team Weekend Open Houses

3 Bed Home in Cape Coral

Open Saturday 1-3 PM

3835 Palm Tree Blvd, Cape Coral, FL 33904

$275,000

3 Bed, 2 Bath 1,771 SQ Ft Living Area

 

Last week we talked about the efficiency of the real estate market.  Simply put, the Southwest Florida real estate market isn’t as efficient as the stock market.  No real estate market is, because the information isn’t as readily available and we’re not dealing with apples and apples. So why do some homes sell below market Value?

Why Do Some Homes Sell Below Market Value

Let’s elaborate.  The stock market has what they call the big board.  Everybody can look up and see what a stock is trading at this second.  If you’re looking at class A common stock for a company, 100 shares of the same stock are exactly the same.  There is no difference.  Additionally, everybody has access to the same information on the company at precisely the same time.

The real estate market is different.  Even if you have two homes with the exact same floor plan, they are different.  They are located on separate lots, making potential differences in location value.  The upgrades can be different.  Their repair and maintenance may differ, and of course the decorating and appearance can affect the value of the homes as well.  One home may have a pool.  They may not be built the same year with the same materials.

And this assumes it’s the exact same floor plan.  We all know most homes aren’t the exact same floor plan.  So how would a consumer, appraiser, bank, property appraiser, seller, or agent fairly compare various homes against each other?  It’s a complicated process, because you’re not dealing with apples and apples like a stock.

The other component that affects what a home might sell for is the exposure to the market.  If the home is fully exposed, presumably everyone who is looking in that price range for those amenities would be aware of the home.  This just isn’t the case.

Have you ever driven by a neighborhood and said to yourself, “Wow, I didn’t even know this subdivision was here?”  Or open a newspaper and wonder where that home is located?  These are two examples whereby if the customer didn’t stumble upon the area or see an ad for the property, they wouldn’t even know it existed.

The agent you hire to expose your home to the market makes all the difference.  If you wanted to sell a widget online in an auction, do you think you’d get more if you had 1,000 bidders than just 1 or 2 bidders?  Of course, you would.  Full exposure equals full market value.  Partial exposure equals less than full market value.  This is one reason For Sale By Owners net 16% less on average than using an agent.

Not all agents are the same.  Some offer limited market exposure, which is better than sell by yourself.  Some offer much more exposure.  Of course, all this marketing costs money, so every agent can’t do it because they don’t have the money.

Agents get creative and clever and tell you that the home will be listed on 50-100 Internet sites and that’s all you need.  This isn’t full exposure.  Sure, it’s better than nothing but it’s not full exposure like we’re talking about.  Don’t assume all agents are the same, and don’t assume all marketing is the same.  It just isn’t!

Your home isn’t just like every other home.  It needs to stand out.  It needs someone to stand up for it and say Buy Me, I’m special!  The Ellis Team can do that for you.

Why Do Some Homes Sell Below Market Value?

Recently while doing some market research I stumbled upon a property that is undervalued.  It’s sad because the home should sell for more than it’s currently listed for.  It’s been on the market awhile.  It could use a few repairs that would make a big difference, but I presume it just may not have been marketed like it could be.  This seller will undoubtedly net less than they should simply because they didn’t do a few repairs and because the market doesn’t realize it’s a good deal.

The real estate market is not as efficient as the stock market.  If you’re looking for Top Dollar, Always Call the Ellis Team at Keller Williams! 239-489-4042 or visit www.LeeCountyOnline.com and search the market like a pro.

Ellis Team Weekend Open Houses

Bell Tower Park Open House

Open Saturday 1-3 PM

5691 Kensington Loop

$330,000

 

Tanglewood Open House

1561 Cumberland Ct

Open Sunday 1-3 PM

$285,000

 

Reflection lakes Open House

13812 Lily Pad Cir

Open Sunday 1-3 PM

$250,000

From time to time we go on listing appointments whereby the seller doesn’t like their current market value, so they decide to wait until the market goes up to sell.  Waiting for market increase could cost you money.

3 Reasons Sellers Overprice Homes

We know why sellers overprice their home. It’s always one of three reasons.  Need, greed, or ego.  We all know the market doesn’t care what a seller needs to sell for, nor does it care how much a seller would like to get for the home.  This brings us to ego.  Some sellers want to sell at a certain price because they don’t want to lose money.  You might think this is greed, but it’s actually ego.  It’s an ego thing to hold out for break-even or better.  It feels good to tell people, or yourself, that you didn’t lose money.  If anything, you made money.

Sometimes ego can get in the way of a sound financial decision.  First, you’re not guaranteed to make money on every deal, and it’s not your fault.  The market can change, the economy can change, and demographics can change.  All are beyond your control.  You win some, you lose some.  And nobody else really cares how you did except yourself.

So if we’re into convincing ourselves what the best decision is, let’s look at the whole picture.  I took a real-life scenario and broke it down.  At the end, you can answer what the best decision is.

Waiting For Market Increase Could Cost You Money

Seller has a home that’s worth $400,000.  He really wants to sell for $420,000.  He knows it’s 5% above the market and home won’t appraise, so he figures he’s better off waiting until next year to get his money.  Is he better off though?

Waiting For Market Increase Could Cost You Money

The seller’s home is 12 years old.  At some point it will need a new roof, air conditioner, water heater, pool pump, etc.  This seller owes $350,000.  The principal and interest payment is $1,670.95/mo.  Additionally, they pay $4,000/yr in taxes, $2,000/yr in homeowners insurance, $500/yr flood insurance, and $3,600 yr in HOA fees.

The seller is waiting until the home goes up $20,000 in value.  Let’s say it takes a year.  In one year’s time this seller just incurred $30,151 in expenses. This does not include the yard, utilities, budgeted maintenance for things like a roof, AC, pool pump, paint, water heater, etc.  If anything breaks down it’s in addition to the $30,151.  If the seller waits a year, he actually loses $10,151 waiting for that extra $20,000.  Sure, his mortgage balance might be slightly lower than next year, but his cost of sale will be higher too (doc stamps, title insurance, etc. )

And there is no guarantee this home will be worth more next year.  In that case it would really cost the seller.  There is one more cost to think about as well.

Unless the seller already owns their next home they have to replace the current one.  If their home goes up 5%, it’s logical to assume their next home may go up about 5% too.  So did they really save anything?

And even if they already own their next home, did paying taxes on two properties and all the costs save them?  Definitely not.  So next time you’re forced with a decision on price, ask yourself this question.  Is my motivation based upon need, greed, or ego?  If the answer is yes to any one of these, calculate the cost of keeping your home versus the expected gain and evaluate.  Often the best answer will be to sell now, in which case you’ll have to decide what your bigger need is, a sound financial decision or a happy ego.

Talk to Your Ego

An ego doesn’t know any better.  It’s based upon the information you give it.  If you tell your ego you’ve come to a logical decision based upon facts, your ego will surprise you and reward you.

If you’d like to talk to us about your options, we’re here to help.  239-489-4042  If you’d like to surf for your next home, or get an idea of what nearby homes are selling for try www.LeeCountyOnline.com

Good luck and Happy House Hunting!  Always call the Ellis Team!

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