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.

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The problem with real estate agents is they are not all the same and it’s hard to tell the difference without really interviewing them. Agents come with varying experience and from differing backgrounds. There is no requirement for a college degree in Florida and it’s one of the few careers you can step into without any training. So what’s a consumer to do?

Problem With Real Estate Agents Find out what your home is worth

The agent you hire does make a difference. Agents with vast experience and marketing can net sellers ten’s of thousands more at the closing table than agents with poor track records. Being locked into a listing agreement with the wrong agent can seem like a lifetime if there is no communication and little activity for your home.

On the buying side, having an agent that works with you is invaluable. This is one reason most buyers do not buy For Sale By Owners. They want their agent advising them on price, inspections, zoning, schools, neighborhoods, etc. If a buyer is going to work directly with an owner they want a huge deal, because they feel like they’re taking a huge risk. The owner knows the home and neighborhood but the buyer doesn’t, so they feel at a disadvantage.

One of the reasons a home owner might sell their own is to save the commission, but the buyer and the seller can’t both save the commission, so it rarely works. Even if they come together on price, the deal rarely closes due to other issues they’re not equipped to handle, like inspections, appraisals, financing, HOA rules, etc.

I’ve seen two separate studies that show For Sale By Owners sell on average for 16% less with than an agent. This is not surprising. An owner desires to sell on their own only until they see the value of paying someone else to do it. When that occurs, it’s a no-brainer.

After that, which agent is the best? Only 4% of all buyers can actually buy right now. Many buyers have to sell something first, so somebody has to solve that issue before they become an actual buyer today. Other buyers don’t qualify for financing right now.

The answer is you need an agent that exposes your home to 100% of the market and can help with these facts about buyers. Imagine if you had an item on e-bay to sell. If there was just one buyer bidding on the item, how much would it sell for? Or, imagine you had 1,000 buyers bidding on that same item. Now how much would it sell for? The answer is, much more than just one buyer.

And this is the difference between finding a buyer and 100% exposure. Since we know only 4% of all lookers can actually buy, we need as much exposure as possible. Not all agents advertise the same. Some agents don’t advertise at all. They employ the 3 P’s. Put a sign up, Place it in MLS, and Pray someone else sells it.

The MLS doesn’t sell homes. Great agents do. If the MLS sold homes, all homes in MLS would sell, and that just doesn’t happen. Sellers need an agent who knows the market, communicates well, advertises extensively, studies changes in the market, and will tell the seller what they need to hear, not what they want to hear.

The market rarely stays steady. It changes every year, every month, and by the week. Buyers need an agent that is familiar with financing, knows the market, and will show them homes that meet their criteria. The bottom line is buyers and sellers both need agents that can listen, communicate, negotiate, and help formulate a plan to accomplish a goal. The agent should have experience and wisdom, or access to it at all times. The Ellis Team at Keller Williams has all of this.

Call us at 239-489-4042 if you’re in the market to buy or sell. If you’d like to get an idea of what your home might sell for, check out www.SWFLhomevalues.com If you’re looking to purchase, check out www.LeeCountyOnline.com

Good luck and Happy House Hunting!

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Reflection Lakes Open House
Reflection Lakes 4 Bedroom + Den Pool Home on Lake

13925 Bald Cypress Cir

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