Just when you thought you had seen everything, along comes another change in the real estate market. We are seeing SW Florida home builders changing sales tactics again, and it’s not good news for the buyer.
To mimic the success home sellers are having through their Realtor, several home builders have instituted a highest and best offer format on their homes. Basically, it works like this. The buyer makes a binding offer on a lot. There is typically a stated priced however the buyer can offer highest and best. The winning bidder chooses the home they want built and they go to contract.
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Buyer Pays the Difference
If the home does not appraise, buyer agrees to pay the difference. Once you bid up the price, you’re buying it regardless of whether you pay cash or finance it. If the buyer is financing it, they will have already been pre-approved to bid on the property and shown financial ability to pay what they are biding.
Previously, home builders have been limiting sales contracts so they could keep up with price increases and maximize profit. Home sellers may have shown builders the way as builders want in on the fun as well. All of this puts additional pressure on buyers because they do not know what it’s going to take to win the bid.
I spoke with a builder who used this in another city in Florida. The lot had a $25,000 stated lot premium and was offered out for highest and best. The winning bidder bid it up to $170,000 and won the bid. They then went to contract with the house on tip of that plus options.
The builders argue that it is not fair to sell to whoever shows up first. They are getting as many as 100 people per day through their model homes. That is 700 per week. If a builder releases 2 lots and calls for highest and best, they now have 700 from this week, and thousands from previous weeks who have seen the property. Builders love this because not only are they raising prices on the house as costs rise, but they are also maximizing value on the total package.
New Construction Prices Will Pull Resale Prices Higher
Rising new construction prices can help pull resale prices even higher when you have such limited supply and strong demand. It used to be when building prices got too high people would switch over to resale and vice versa. Now there is no switching. Buyers must jump on the first home that meets their needs and come with their best offer.
Buyers are not competing with the seller, or the builder. They are competing with other buyers. We have great tools on how to win bids when you are not holding all the cards. These tools help, but they are not an automatic win for buyers in every circumstance. You’ve got to play the cards you are dealt, and a great Realtor can help you play them as best as possible. If you are a buyer, call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com
If you are a seller, you need an experienced Realtor. Buyer agents are trying all kinds of tricks and shenanigans trying to win deals. Some are legit, and some are not. An experienced agent can keep you from going down the wrong path with the wrong buyer. If something doesn’t seem right, you need an agent with experience to sort that out.
Getting Top Dollar For Your Home
With builders changing sales tactics, so too must home sellers. There are additional ways to maximize your sale price. Brett and Sande Ellis know how to do this as well. If you are looking for Top Dollar, call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevalues.com to see what your home is worth.
Do you know what your home is worth? If you haven’t checked in the last week, then you really don’t know.
We have many happy home sellers that are glad they called the Ellis Team at Keller Williams Realty. Let’s talk and see if we can help you too!