Average sales prices rose 20.4% in Lee County while median sales prices rose 14.0% in October over last year’s numbers. This tells us there is some strength in the higher end of the market pulling the average figures higher.
If we dig a little deeper we notice that average sales prices don’t usually bump up until December. In 2015 we started seeing the climb in September, about 2 months earlier. The average numbers are a little more pronounced and help identify the trend in the median numbers when they occur over time.
SW Florida Real Estate Prices Rise as Does Inventory
We’ve also been telling readers that listing inventory has been down, and this has led to a rise in prices. We know from history that inventory begins rising about October, and this year kept the trend.
Listings rose over September 8.13%, however they fell 10.3% from last year’s numbers. So we’re seeing the typical rise in inventory we usually see this time of year, however the bar is lower and listings are down from last year.
What does this tell us? The SW Florida real estate market should be in for a good ride. Of course, this is predicated upon interest rates remaining affordable and the job market remaining stable. All signs point to both. Interest rates will climb, but forecasts by FNMA and Freddie Mac suggest modest rises.
Rising rates will affect some home buyers, but it shouldn’t disrupt the market as we have more demand than supply. Rising rates will hurt individual buyers more than sellers overall. If we had a high inventory market, it would affect sellers more.
Rising rates will help curtail 20% rises in prices. It may not change the direction but it may slow the speed of increase.
We think season should be good again this year. The weather is already brutal and we haven’t even touched December yet. SW Florida has enjoyed rather warm weather and that is attractive to buyers who’ve just about had it with snow and blizzards. This winter could be the straw that breaks the camel’s back and sends people our way.
Sellers, this could be your time. All signs point to a perfect time to sell. Low inventory and rising prices combined with a decent economy spells success. It’s the perfect storm, but perfect storms don’t last forever. Yes, we expect a good market going forward, but one day you won’t be holding All the cards, just some of the cards.
It’s always fun to play cards when you’re holding all the good ones. It really comes down to skill when the cards are evenly distributed, and it’s no fun at all when you’ve got no cards. Buyers feel like they have no cards right now. If they wait, they’ll have better cards but prices and rates may both be higher, so waiting isn’t the best option.
Sellers may wait, and prices may be higher. But it may take longer to sell and buyers will have more choices. Your home won’t be the commodity it is now. Really, we can honestly say that now is a good time for both buyers and sellers. Waiting may cost buyers more money due to rising rates. The banks keep that money, not the sellers. And if a seller waits, they may not enjoy the fruits of having little to no competition.
If you’d like to search the MLS, feel free at www.LeeCountyOnline.com Our database is updated every 5 minutes, so you can beat out other buyers to hot new listings.
Sellers, if you’d like to take advantage of this Hot market, call us at 239-489-4042. Put our marketing and “Secret Sauce” to work for you. We can even help you find your next home. Call us and let’s talk.
This is the time of year when listings begin to rise. It happens almost every year beginning sometime between August and October. We think October numbers might be pretty steady and we may not see that rise when they’re released later this month. It may not happen until November this year.
We have seen an uptick in listing appointments. Some sellers have a need to wait for various reasons, while others are just waiting for numbers to rise to a certain point.
We’ve noticed some sellers are interviewing multiple agents, which can be a good thing if you’re asking the right questions. One question we’ve been seeing a lot lately is a question that can lead to the biggest mistake a seller can make.
Sellers have been asking “What Price Should We List it For? While this is a perfectly legitimate question that needs to be answered, it shouldn’t be the determining question when selecting the Realtor to represent you.
Selecting an Agent Solely on Price Can be a Big Mistake
Obviously agents want to get you as much money as the market will allow. Unfortunately when an agent feels they’re in competition to “Win” the listing, they may tell you they think they can get more in hopes of not losing the listing to another agent. Each listing brings the opportunity to create buyers. They may sell your home once, but they can pick up as many as 20 buyers off your listing.
The longer they hold your listing, the more time that listing can generate buyers. Buyers they can go sell other things to. I would say that agents don’t win when they over-price a home because it won’t sell until the seller gets realistic. However, if the agent over-prices it and sells off of it, the agent can win. The seller never wins in this case, as statistics show homes that sit longer on the market typically sell for less later on than they would have had it been priced correctly upfront.
In the industry we call it “Buying a Listing.” It depends on two things. What is the agent’s motivation? Is it to sell your home or just get a listing? The other factor is maybe the agent doesn’t know better. They may not know the market, or understand the area. Market knowledge is crucial. Agents need to know the stats.
Whether the agent doesn’t know better, or is buying a listing doesn’t matter. Either event causes a seller to lose. And sellers walk right into the trap because the first question they ask is “How Much Can You Sell My Home For?” And then they select the agent who tells then the highest price because they can “Get” more than other agents, so they must be better.
The better way is to interview agents and see who best knows the market and has the best marketing plan to sell your home. Price should be discussed last. If you’re interviewing great agents who understand the market, prices should all be about the same. The real question should be which agent understands the market and can effectively market your home to home buyers.
The reason price should be discussed last is because it is the one constant. The market is what it is at any point in time. The variable is the agent’s ability to promote your home to the market and the agent’s knowledge, experience, and wisdom to properly interpret the market.
If you really want to hire the best agent, spend your time seeking answers to the variables and less on the constant. In fact, I would go a step further and say you should select the agent you’re going to hire, then agree on the list price. Doing it in reverse is just asking for trouble and won’t answer the questions you need answers to, which is does your agent understand the market and who promotes your home the best.
If you’d like to search the MLS and do some of your own research visit www.LeeCountyOnline.com or call us at 239-489-4042 We’re glad to help.
Have you ever heard the term “Now we’re cooking with gas?” Before natural gas people cooked with wood and it was a slower process. The advent of natural gas changed everything and thus the term was born.
That’s how we feel here at the Ellis Team. Our marketing produces sales 19.7% faster than the average agent and our sellers average over $11,000 more than the average agent. Recently we just added fire to our marketing program and we’re seeing some outstanding results.
Cooking With Gas and the Secret Sauce
We had a waterfront listing in North Fort Myers for $525,000 that had been on the market for about 3 months. It was getting some activity but no offers. We added our “Secret Sauce” and it went pending.
This past week we added our “Secret Sauce” to a $700,000 listing in Cape Coral and it just went pending. It had been on the market a little over 2 months.
We listed a property in Bell Tower Park and tested our new “Secret Sauce” and it went pending in 2 days. Was it luck? Was it a hot market? Or was it something more?
What is the Secret Sauce? Let’s start out by telling you what it isn’t. It isn’t a simple 4 step process that anybody can do for free on the Internet. It has over 50 elements to it and most of them cost money. They certainly cost time. Some companies do some of the things in the formula, but we haven’t found anybody that does all the elements. The process is also important. Things must happen in order.
If you had the recipe to make the world’s finest wine and followed all of the steps but didn’t time each step perfectly, it probably wouldn’t turn out like you’d hope.
The Secret Sauce also isn’t a recipe to sell a home for double its market value. If we list a home worth $500,000 and try to sell it for $ 1 Million or even $700,000, it‘s not going to sell because it’s overpriced. Marketing can only expose a home to the market. It can’t make someone overpay or make the bank appraise it for more money.
Many agents advertise in the newspaper, in the Yellow Pages, on TV, radio, etc. Many advertise online like Facebook, Twitter, Craigslist, Instagram, blogs, etc. Some even use single property websites, pay per click advertising, re-targeting, search re-targeting, etc.
Yes, we use all these, and more. We also use aerial photography, enhanced photography, high definition video, virtual tours, and the list goes on. If you found a company that uses all these tools that would be impressive enough. It’s not the list of ingredients that produces results; it’s the process of putting it all together in a manner that works.
Once you find that secret formula that generates buyers, you have to have systems to capture the leads, and follow-up systems to convert them.
It does no good to pay companies like Zillow, Trulia, Realtor.com if you don’t have a system to follow-up and connect with people. Yes, we advertise on these sites too, but that’s not the magic. The magic is connecting with people, listening to their needs, and producing results.
When you combine the Secret Sauce with the Magic, powerful things happen. We don’t disclose the exact ingredients or the process of the secret sauce. Not because we’re afraid agents will copy it, because quite frankly nobody is going to do everything we do, it just costs too much time and money for the average agent.
We keep it secret because it’s something we’ve tested and developed over many years. We recently discovered a few new ingredients and a few tweaks to our process and the whole thing is producing magic.
The Ellis team at RE/MAX Realty Group in Fort Myers is hiring. Our team is growing and we need to fill 4 positions.
We’re looking to hire another closing coordinator. This person should be familiar with Excel and Quick Books. Real estate experience is preferred as you’ll be working with attorneys, title companies, lenders, appraisers, sellers, and inspectors.
Fort Myers Real Estate Brokers are Hiring
We’re also looking to hire 3 buyer specialists. Our marketing is working and producing buyers. We have some fantastic listings available for open house. Our newspaper and print marketing generates phone calls and our online marketing generates leads looking to buy complete with name, phone, and email addresses.
We never cut back on marketing. We’ve tested what works and we’re not afraid to spend the money. We need great people to help our customers purchase homes. Great lead generation and great service equals happy buyers who refer us to their friends and family.
If you have experience in real estate and aren’t making the type of money you should be making, we should talk. Give us a call at 239-489-4042
Over the years we’ve written several articles on how best to sell your home, so we decided to compile a new all-inclusive article packed with tips on selling your home, choosing the right Realtor, and getting your home ready to receive top dollar when you do sell. We call this the Ultimate SW Florida Real Estate Home Selling Guide.
Ultimate SW Florida Real Estate Home Selling Guide – 15 Tips to Get Your Home Ready to Sell
It is no secret that a buyer looking for a home is impressed by its upkeep. And occasionally you will see a seller described in an ad like “Mr and Mrs Perfect” or “Mr and Mrs Clean” are moving away and offer their meticulously kept home for sale. Buyers spring into action on these homes because sellers meticulous about cleanliness are generally meticulous about repairs as well. And we all know most people do not live perfect. Most sellers have a few things to do before putting their homes on the market. This article is dedicated to those who have a few things to do.
The Ellis Team has always passed along tips to get a home ready to sell. Recently we had the good fortune to hire Michelle Hendren who has a strong background in Property Management. Property managers are said to have “seen it all.” Michelle contributed several of the tips.
A buyer recently shared with us that because the woodwork had been recently painted, it made the wall color pop for him.
15 Tips to Get Your Home Ready to Sell
Tip #1 If the woodwork does not need painting use fabric softener sheets to clean the woodwork.
Tip #2 Occasionally sellers will plan to replace a newer carpet because of a spot or stain. Wet the stained area. Spread a sufficient amount of baking soda over the affected area. Wait. Come back later to find the baking soda has magically lifted the stain (even nasty red stains). Michelle mentioned that on one occasion the entire carpet was treated.
Tip #3 They will think you have a green thumb. Your plants will look healthier after you spread the used coffee grounds around them. And bugs will take a hike because of the coffee smell. How about that?
Tip #4 Use Turtle wax or another similar car wax. Apply to tub, shower, tiles and doors. Poof … a shiny bathroom as old water stains disappear. Keep the look fresh by wiping down the shower door with baby oil. Water will bead on the doors.
Tip #5 Dishes and utensils will appear more sparkly clean when you place the concentrated pouch in the silverware rack and not in the door dispenser. We got this tip from an appliance salesman. I tried it and loved the results. I would never have thought of it.
Tip #6 Extend the life span of washing machine and dishwasher by using liquid products. We have been told that the powdered products are made of paper and will clog the appliances. Who knew?
Tip #7 Freshen the smell of the appliances by running an empty cycle with 1 c fresh vinegar.
Tip #8 If you can smell it; you cannot sell it. Remove the cause of any stench or smell. Sometimes we all become accustomed to certain smells in our homes. A buyer walking into your home does not want to become accustomed to a smell. We will share some thought with you depending on your situation and the cause of the smell. Remember we are here to help. While we do not profess to having seen it all, we have seen a lot and have had many successful sales after sellers followed a few suggestions.
Tip #9 Mirrors – to help prevent streaks make a solution of 1⁄2 vinegar and 1⁄2 water.
Tip #10 Smoking – if you have a smoke odor, get a few containers and put vinegar in them and put them
around the house. This helps eliminate the odor of smoke.
Tip #11 Garbage Disposal – Garbage disposals are to be used for small quantities, the worst things to put down a garbage disposal are lettuce, potato peels, pumpkin or any food that shreds. To freshen your disposal add a citrus fruit ie. lemon or orange and run disposal with cold water. To help keep the blades sharp put down a few ice cubes and run disposal without water.
Tip #12 Clean your stainless steel appliances with Old English
Tip #13 Brighten up your faucets and remove water calcium – Use 1⁄4 cup baking soda, 1 tablespoon dish
detergent and vinegar.
Tip #14 Clean calcium build up in your toilets – Get a lemon and cut in half and apply to the rim, let sit for 10 minutes. Use the finest sanding paper and wipe clean.
Tip #15 To clean kitchen oil splatters, and put a couple of drops of mineral oil on a paper towel, wipe on the greasy surface.
Tip #16 Have you ever had shower doors that you had cleaned but lacked the luster of new. You knew that it was clean but would still look scruffy to a buyer. Use Turtle wax or another similar car wax. Apply to tub, shower, tiles and doors. Poof … a shiny bathroom as old water stains disappear. Keep the look fresh by wiping down the shower door with baby oil. Water will bead on the doors.
We’d love to hear your top tips as well in the comments.
Ultimate SW Florida Real Estate Home Selling Guide – Top 10 Tips For Selling Your Home in Today’s Market
Our team lists and sells a lot of property. We thought we’d share a few tips for selling your home.
Curb Appeal– Buyers judge the quality of the home by what they can see. You will never get to the home inspection stage if the buyer never offers. Look at your yard, landscaping, outside paint, roof, etc.
If the gutters outside looks bad, buyers judge the inside probably looks just as bad and they don’t schedule appointments to view.
De-Clutter Inside– If a room has too many things in it, it makes the room look smaller. Additionally, buyers have a harder time envisioning their personals in your home when all they see is stuff. Take out as much as you can.
Be sure to remove Personal Photos– Buyers always stop and look at the pictures on the wall, and if there are too many the home feels like it’s someone else’s and they have a hard time picturing themselves in your home. Knick knacks and photos subconsciously turn off buyers. A few are OK, but too many can be a turn-off.
If a Buyer Can Smell It, We Can’t Sell It– Cigarette odor and pet odors are the #1 turn offs for buyers today. We would suggest smoking outside and removing pets as best you can during the sales process, and hiring someone to remove any smells. Some breeds emit more odor than others.
Remove Pets For Showings– Buyers love pets, and the problem is many times they walk away remembering how cute your pet was, but they remember next to nothing about your home. Your home is in competition with other homes, and you want your home to be remembered and stand out against all others. You don’t want your buyer’s time distracted by your pet. Buyers will not buy your home because you have an adorable pet, but they may buy another if they don’t remember your home.
Be Gone For Showings-We have a saying that every word a seller says to a buyer costs the seller $1,000. Sellers think they know they’re home better than anybody and therefore they’re the most qualified to sell it. Buyers typically feel uncomfortable talking with the seller, and usually give feedback the seller wants to hear. The best and true feedback is a good offer, not meaningless words to appease the seller. Some buyers like talking to sellers because they glean information they’ll use against the seller in negotiations. Best advice is to be gone for showings.
Price-Overpricing a home is a sure fire way to make it sit. After your home is on the market awhile, buyers begin to wonder what’s wrong with it. After awhile fear kicks in and buyers don’t want to offer too much on a home nobody else wants to buy either. While the market is Hot today, it is a price sensitive market. Overpricing is a good way to ward off potential offers. Many buyers don’t want to insult the seller, so they just offer on another home that is priced where it should be. Sellers usually think the buyer can always make an offer, and of course nobody ever offers full price anyway so we’ll build in some negotiating room. This is a myth and statistically it’s proven that seller’s that overprice end up taking less later than sellers who price correctly upfront. Many homes in the market today sell at or near full price, and some sell for over asking price.
Marketing– Times have changed. Some agents employ the 3 P’s. Put a sign up in front yard,placeit in MLS, and pray someone else sells it. Successful agents today rely on newspaper advertising, radio, TV, social media like Twitter, Linked In, Facebook Fan pages, YouTube, virtual tours, digital media as well as mobile technology and much more. Ask to see how your home will be marketed and which national sites it will be syndicated to when interviewing agents.
Have Your Interview Questions Ready– Agents may sound alike but they don’t all work alike or produce the same results. It’s up to you to ask powerful questions. Remember, the agent does this everyday, you don’t. It’s hard to know which questions to ask. If you need help, we have a list of crucial questions you should ask before signing any listing agreement in our Selling section on our website LeeCountyOnline.com
Select the Right Offer-Don’t just take any offer. Many times it pays to wait for the right one. Why waste time with a buyer that doesn’t qualify, or the loan program they’re pre-qualified for will present issues for your home or association. Knowledge is power and can save you from many bad transactions. If you don’t have time to do it right the first time, when in the world will you find the time to do it over?
If you’d like to search the MLS like a Pro visit www.LeeCountyOnline.com or call us at 239-489-4042 and we’ll be glad to help. Good luck and happy House Hunting!
Check out our new Ellis Team Instagram account where we’ll be posting videos on open houses and hot new listings in SW Florida
Ultimate SW Florida Real Estate Home Selling Guide – Pricing a Normal Sale Versus a Short Sale or Bank Foreclosure
In past articles we’ve given tips on what to be aware of when buying a short sale or foreclosure as these sales are relatively new to SW Florida in the past few years. We’ve also given tips on how to select an agent to properly handle a complex short sale when selling, but we haven’t yet offered tips on how to sell a normal non-distressed property in today’s distressed environment.
Tips on Pricing a Normal Sales Versus a Distressed Property
Selling a “Normal” sale can be much different than selling a distressed property. A normal seller has some distinct advantages over distressed sellers, and a few disadvantages as well.
Selling Your Home is a Balancing Act
A short seller may have limited time to sell if they haven’t been making mortgage or HOA payments. Either the bank or HOA can foreclose, so time is not always on the seller’s side. A short seller needs to price the home competitively, but not too high or too low. If they price too low the bank will reject the short sale and if they price too high buyers won’t be interested.
A normal seller should also price correctly. If the property is priced too high, buyers will either not buy, or will buy something that offers better value. If the home is priced too low, the seller is just giving equity away to the new buyer.
A normal seller typically doesn’t “Have To” sell because of a bank foreclosure. They may want to sell to trade up, trade down, take a job relocation, move closer to schools, family, etc. The “Wish To” sell is very different than the “Have To” sell. Buyers are often more interested in a “Normal” sale because there is just one decision maker. The buyer doesn’t have to wait weeks or months for a decision and there is less stress on the “Normal” seller about deficiency judgments and tax implications, all making for a smoother transaction even if bank accepts the short sale.
When pricing the subject property, we often have to look at the condition of the short sale and foreclosed homes. Many times these homes need appliances, flooring, fixtures, landscaping, air conditioners, and much more. Condition plays such a big part in comparing homes. Normal sellers are competing with short sales and foreclosures, but they’re not always apples to apples and adjustments need to be made.
Agents also look favorably on normal sales because they are rarely affected by last minute title, judgment, and lien issues. I can’t tell you how many times HOA, utility, code enforcement, and other liens delay a closing on foreclosed and short sale homes.
Financing a normal home is much easier for a buyer because they can reasonably lock-in they’re interest rate. It’s almost impossible to lock-in a rate on a short sale as you never know when you can actually close, and also true on a foreclosure if any of those last minute title surprises creep up we mentioned earlier.
Normal sellers need to keep their eye on the “Current” of the market. Even though the normal seller has many advantages, the distressed sales aren’t emotionally tied to the home, so many times they’re more willing to look at what is actually going on in the market versus what they “Feel” they need out of home. A bank or the investor may just want out and can afford to dump a property versus a normal seller who has worked hard for their money and need it for the next venture.
In a declining market you never want to get caught chasing the market down, and this is true for distressed and normal sales. You really need to study the “Current” of the market and see what it’s doing, not only for the overall market, but also competing homes like yours. Traditionally, sold comparables mean more than Active listings as anybody can ask anything for a property, but the proof is what others are willing to pay.
The market doesn’t rise or fall in unison for all properties. It’s possible the market has bottomed and even started going up in certain segments of the market and still declining in others. Recognizing where your home stands in the various sub-markets will be critical to pricing it effectively, and will offer you the greatest chance of selling, even in today’s market.
It doesn’t matter if the market is up, down, or sideways, pricing based on analysis is critical. Marketing is especially important when buyers have many homes to choose from, so make sure you’ve discussed with your agent and have a clear plan based upon your property’s needs. Marketing, pricing, negotiating, and solving the transaction puzzle are the keys to being successful in any market, and today we hope we’ve offered tips in two of those areas.
Good luck in successfully selling your property.
Ultimate SW Florida Real Estate Home Selling Guide – How to Interview an Agent to Sell Your Home
We go on several listing appointments each week. We don’t take every listing for a variety of reasons. Sometimes the seller is upside down on the mortgage and they don’t want to short sale, or perhaps the market isn’t quite where the seller wants it to be so they wait. Each seller has his or her own reasons for deciding if and when to sell, and we merely help them in the process on their schedule. We’ve always got great new listings coming to the market You can view our Featured Properties and check them out. You can save your search and the system will alert you when new listings enter the market.
Tips on Interviewing Agents
One trend we have been seeing is sellers asking a lot of questions. Some have a pre-printed list of questions and others are asking questions based upon ideas that came about from interviews with other agents. If you’re unsure of which questions to ask, our website has a list of Important Interview Questions You Should ask Your Realtor Before You Sign Anything.
One question on that list is How Many Listings Did Your Team Sell Last Year? This is a much different question than how many homes did you sell last year.
Recently we went on an interview and the seller had interviewed several agents. The first agent came in about 20% higher than we were. When I asked who that agent was I had never heard of them. She worked for a company with little market share so I looked her up in MLS and found that she had Zero listings sales. The seller interviewed another agent who had 5 listing sales. While not a lot, that’s a lot better than Zero. The agent with 5 sales came out similar to our numbers.
The first agent either doesn’t know the market, or needs a listing. Listings generate buyers, so if you take an over-priced listing it may not sell, but the listing agent may gain some buyers from it. We call this buying a listing in the industry. We don’t like to do this as we want to help each seller, not use them. I’m not saying this agent was buying the listing, they just may not have known better.
Working with a seller is much different than a buyer. Buyers are the easiest part of the business. Working with a seller requires more training and knowledge. New agents typically get eaten alive by sellers. They need to know if their home is priced correctly in the market, if any new listings have entered the market that is competition, how each showing went, where the home is being marketed, open houses, and what type of calls the agent is getting. They want to know all about the home up the street, and why Fred the neighbor says they priced their home too cheap. They want to know why all the cars are stopping at their neighbor’s home. They’ll have 3 people from work who say they want to buy the home and ask agent to follow up with them.
When a contract comes in it gets interesting. Since they just had 4 showings they’re convinced all 4 will be writing full price offers and follow up with each of them. Once a contract is accepted it gets really interesting and all the anxieties about inspections and contingencies come out. It takes an agent who can handle a seller’s emotions. It takes an agent with a lot of experience working with sellers or both the seller and the agent will end up frustrated.
Asking the right questions before hiring someone to list your home will prevent this frustration later. If you’re not satisfied with the answers, you’re not interviewing the right agents. Hiring the right agent is perhaps the most critical decision you will make in the entire process, so spend the time upfront and it will save you in the long run.
Ultimate SW Florida Real Estate Home Selling Guide – Top Tips for Pricing Your Home in Today’s Market
It seems these days everyone’s got a quick and easy theory on how to price a home, but many are filled with errors that will either cause you to under-price your home, or over price it. Neither is good, because under pricing it means you’re just giving your equity away to the new buyer, and over pricing it means it will sit on the market longer and perhaps never sell. Statistics show that homes that are over-priced tend to sit longer and the seller ends up taking less because the market wonders what is wrong with it when it sat so long. Top Tips for Pricing Your Home in Today’s Market.
Top Pricing Tips
Here are some tips to consider:
Don’t go by the property appraiser’s assesses value- I’ve talked to several property appraisers over the years including our own Ken Wilkinson. A property appraiser from IL told me it’s not the property appraiser’s job to value a home correctly, but rather simply it’s their job to value it fairly. There is a big difference. Because property appraisers use a mass appraisal system, they’re trying to price all homes fairly. Obviously if they could price each home at market value that would be wonderful, but they appraise hundreds of thousands at a time without going in the property, so it’s all done in relation to every other property. There can be a wide margin for errors with this system, and thus why there is an appeal process if you believe they’ve made an error. It’s amazing how well they do county-wide, and yet we can’t rely on any one valuation to be absolute. There are variations on many properties.
Sites like Zillow provide Estimates. In fact, they call it a Zestimate, but it’s only that, and I’ve seen the valuations vary widely in just a matter of days. They use an online computer model, but again this model doesn’t visit the home, see inside, evaluate the condition, etc. They may look at all homes in a subdivision or street, but here in SW Florida there can be wide variations from street to street. Picture a riverfront home compared to a home 100 ft away across the street, or a golf course lot versus off golf course.
Be Wary of Price Per Foot- I could show you two identical 2,000 sq ft homes from a builder. One is built with a pool, the other is not. One is on a waterfront lot, the other not. One upgrades the kitchen, adds a 3rd garage, upgrades carpet, cabinets, etc, and the second remains plain Jane. Obviously the pool and the lot location affect the price per square foot, so the square footage doesn’t really mean much. You could have a home built in 1952 sitting next door to a stupendous home built in 2012 with all the new hurricane protection, wiring, plumbing, roof, etc.
Study the Appraisal- Appraisals can be ordered for different reasons. It could be ordered for resell, refinance, estate value, eminent domain, taxation, etc. The scope and purpose can affect the value. If the bank sees you’re a great credit risk, it’s possible a refi appraisal could come out higher than a resale appraisal.
Be Careful Valuing Amenities- Just because you put an upgrade in the home 20 years ago doesn’t mean it has much value today. I recall back in the late 1980’s going to a seller’s home on Wren Rd in San Carlos Park. Back at that time homes were selling on that dirt road for $30’s. The seller added a $20,000 pool and expected over $50,000 for that home. It’s true, if you add value to pool cost you would think it would be worth that, but a $22k pool to a $30k home buyer is an extravagant amenity they cannot afford. That’s roughly 50% of the house value which was considered an over-improvement for the area at that time. It’s possible that pool had little to no value in that price range at the time. FHA wouldn’t even give value to a sprinkler system there as it was considered an over improvement.
It pays to value a home correctly the first time, as the market has a way of speaking in the end. The sooner you listen to the market, the better off you’ll be. It pays to work with a seasoned agent who can help you price your home using sound methods. On paper you might be able to make it come to what you want, but does that do you any good if a buyer won’t pay that, or a lender won’t lend that much. Be realistic. No matter the market, up, down, or sideways, you will always find those that over price and find a way not to sell. And even in the ugliest of markets’ homes do sell, because sellers price it at today’s value, not some number they need, nor a number from the past.
Remember, the market never cares what you need for your home. The market only cares if it’s priced correctly, and if it matches the buyer’s needs.
Ultimate SW Florida Real Estate Home Selling Guide – Negotiating to Win
Have you ever negotiated with someone and felt like you weren’t getting anywhere, or felt like you’d like to ring their neck because they weren’t reasonable. After negotiating thousands of transactions and teaching negotiating sessions for the Council of Residential Specialists and national conventions, we’d like to offer a few tips that may help you in the future. While we could probably write a book, we’ll offer what we can in about negotiating to win.
Some people feel they’re excellent negotiators as evidenced by their ability to out-negotiate anybody and win at someone else’s expense. This rarely works unless one party is all out of options and there are no other interested takers. In this market, there are usually several interested takers. Let’s talk about some tips that may lead you to a successful deal.
Find out what’s most important to the other party and try to give it to them. Most people think it’s all bout price, but sometimes the closing date is important, or the move in date. Maybe it’s the personal items or the furnishings. I’ve seen some people emotionally attached to a washer and dryer a family member gave them as a present. Ask yourself, is that washer/dryer more important than the overall deal? This question could be asked of either side.
One tactic that rarely works is when one side asks to split the difference as a gesture of good will. This works when both sides feel each has negotiated in good faith and you’re close on the deal. This will blow up the deal when this isn’t the case. Here’s an example. Let’s say a seller prices their home at $200,000 and it’s truly worth $200,000. A buyer makes an offer at $150,000 and the seller laughs. Maybe the seller goes to $198,000 and the buyer goes to $160,000. The seller says they’ll go to $195,000 just to keep it going, but they’re about done. Buyer and seller are now $35,000 apart when the buyer says, “let’s split the difference and go to $177,500.” The deal dies.
Splitting the difference is usually the quickest way to death of a transaction. It’s all a function of where you started. Had the buyer started at $190k and they were only a few thousand apart it might work, but using this tactic when the buyer was unrealistic to begin with only exaggerates an unrealistic deal.
You might save a little bit on price if you give the seller something they want. Maybe the seller has kids and doesn’t want to move them until the end of the school year. They might sacrifice a little bit of money knowing they have their house sold but occupancy until the end of the year for the kids. If that works for the buyer, it’s win/win for both buyer and seller, and buyer saves a little bit of money while helping out the seller.
Another tip is research the market and offer fairly upfront. I’ve seen buyers get better deals by making a fair offer upfront rather than insulting the seller and offering far below market value. Everyone wants to get the best deal they can. This includes buyer and seller. If a buyer insults the seller, the seller is on guard and subsequent dealings tend to be contentious, so the seller counters higher to a buyer they don’t like than a buyer that was fair to begin with.
Don’t use gimmicks and deceit. Make your offer clear and complete. If you try to back-end your way into a negotiation the seller or seller’s agent will sniff that out and it will usually backfire. If you’re clear upfront with your intentions, contingencies, etc. you’ll build trust and perhaps you can get what you’d like. When trust is broken on the front end, it’s very difficult to get what you want through trickery and deceit. I don’t have room for examples and we could list plenty.
Work with an agent that listens and will guide you. Listen to your agent. Agents work with people all day long, every day for their job. Experienced agents who are successful have learned a thing or two about dealing with people and negotiating for success. If you find yourself out-negotiating the market but never ending up with a purchase or a sale, you might be out-negotiating yourself. It pays to seek the advice of a negotiating pro. It pays even more when you listen and act upon it.
If you’re a buyer, your success could very well be getting your first choice or moving on to your 4th or 5th favorite home. If you’re a seller, your success could very well be negotiating to close with your first buyer or waiting months and several price reductions later to close with your 4th or 5th buyer.
Your agent’s marketing brings buyers to the table. What you do with it can make those efforts worthwhile or futile.
Ultimate SW Florida Real Estate Home Selling Guide – Battling Low Appraisals
Low appraisal issues are back in SW Florida. This isn’t a new issue. As markets rise it creates issues for appraisals. Appraisers are under relatively new guidelines which makes their job difficult. Some appraisers are better at handling difficulties than others.
Let’s identify the problem. Appraisers are looking in the past for data that supports today’s value, but the problem in a rising market is that the data in the past is lower by definition because prices have been rising. When a market is on the move appraisers can make a time value adjustment but it seems they’re quicker to make adjustments in a declining market than they are in a rising market.
Here are some tips for agents to get appraisals up to market value:
Once property goes pending make showings by appt only. When appraiser calls meet them out there with comparables you used to value the property. Appraisers have a difficult job. They’re underpaid and expected to turn these around within a day or two. If you have legitimate information that may help them it is usually welcomed. If you go in with an attitude and trying to persuade them to come in with a value just because you need a sale at a certain price it won’t work. Appraisers legitimately want to get it right; they just need facts that fall within accepted guidelines to backup the value they issue.
If the loan was placed with a broker and not a direct lender and you feel the appraisal is bad, the mortgage broker can request an appraisal from a separate appraisal management company if the lender they’re brokering it to accepts from more than one management company.
Since HVCC (Home Valuation Code of Conduct) went into effect May 1, 2009 lenders can no longer work directly with appraisers. This is why agents may only get one chance to talk to the appraiser at the time they inspect the home.
FHA appraisals are good for 6 months, so once it’s completed you’re pretty much stuck with that value. You can dispute a FHA appraisal and provide documentation and it can be amended, but this is not guaranteed.
The seller can pre-pay the mortgage insurance which might eliminate the need for the property to appraise
If an out of town appraiser calls with an order to appraise the home, don’t let them in. Call the lender and tell them you want an in-town lender and to re-order with another appraiser. Over the years out of town appraisers unfamiliar with the local market have wrecked many deals.
Remember one thing about the new HVCC. They have cut what they pay the appraisers and shortened the time the need results. When you call an appraisal management company to ask for business the typical question is what is your cheapest price and fastest turnaround. This isn’t always conducive to an appropriate value on the home. Perhaps one day somebody in authority will re-work this process as it can hold back the real estate market.
If you’re considering selling and would like the Ellis Team to show you what we think we can get for your home, call us at 239-489-4042 We’ll be glad to help.
Lee County Florida real estate cash sales fall 23% in September 2015 and that’s a good thing. We said several years ago one of the signs of a recovering economy is infusion of capital. We’ve been watching a fairly steady decline in cash sales for the past few years. Back in the doldrums of the market reset cash sales accounted for about 70% of all sales.
Investors came in with cash and bought up everything they could at rock-bottom prices. Cash was good because back then banks were nervous about lending. Today banks are encouraged to lend again and prices are nowhere near rock bottom, so buyers have less competition from flippers and long-term investors.
Competition is still fierce for properties and inventory is limited. It’s just not concentrated at the low end of the market like it used to be. These are all signs that the SW Florida real estate market has recovered and on solid ground now.
In fact, median days on market is down to 34 days in September, a 10.5% drop since last year. If you look at the graph, drops of 20% or more have been common this year versus last year.
We have a rising market in prices and because more deals are financed it presents a new set of challenges. Appraisals are commonly an issue in rising markets, and with low inventory sometimes there aren’t comparable sales in the same neighborhood to compare against.
Also, in a rising market, each new sale stands the chance to set the bar higher, and yet appraisers struggle with how to account for this. Appraisers are excellent at looking in the rear view mirror to substantiate prices. The problem is, the rear view mirror helps explain where the market has been, but does little to justify where it is and where it’s going.
When the market was headed south, appraisers were quick to use a time value adjustment because prices were falling. We believe they need to use this on the way up as well, and some do.
We’ve also seen an increase again in out of town appraisers. We’ve fought this before. One tactic agents would use would be simply to decline to make the home accessible when an out of town appraiser called. You could hardly blame the Realtor for slow-playing access because more appraisals were screwed up by appraisers who were not from here and did not know the market.
If an appraiser failed to do the appraisal in a timely manner, it would be assigned to another appraiser, hopefully one in town. There is a rule that appraisers should be familiar with the market but it doesn’t always bear out. We’re not blaming appraisers. We still blame the Dodd-Frank Act and many of its stupid rules. Dodd Frank needs to be repealed and more practical rules put into place.
Hiring an experienced Realtor to work with you when buying or selling is essential. It’s a beautiful thing when experienced Realtors work together to make a smooth transaction for their clients. We love working with other agents who know what they’re doing. The consumer rarely knows if their agent is good, but they find out later when things go bad.
Make sure you ask probing questions when selecting an agent. Are they full-time? How do they handle such things as code violations, permitting, defective drywall, septic systems, and inspection and repair items? Do they have a list of contractors they can recommend? How many homes have they sold in the last 5 years? The answers to these questions may help you decide if your agent knows how to get you out of trouble before you even get in it.
