In March we saw cash sales trending higher in the SW Florida real estate market. Cash sales represented 34.8% of all sales which was up from 27.8% last year. In multi-offer situations cash buyers have a leg up on financed buyers.
While cash sales have been rising since January, they are not alarmingly high. In fact, as a percentage of sales, cash sales were higher in 2017 and 2018. Cash sales are somewhat seasonal as you can see from the graph. They do tend to rise in season as buyers flush with money flock to SW Florida and begin their home search.
Many people believe if they just list their home on MLS, the cash buyer will find them. Typically, it does not work that way. While it is possible for the cash buyer to find the home that is not heavily marketed, how much will the cash buyer be willing to pay if they do not feel competition for the home? When a buyer sees a parade of home buyers marching through the home they want, it makes them up their game. They can use their cash as a weapon against other buyers.
When cash buyers have little competition, they use it as a weapon against home sellers. What has changed in this market is how the cash buyer sees themselves. In a buyers’ market, cash buyers dangle money using the scarcity concept. If the seller loses this buyer, it might be a while before they see another offer, and who knows if the buyer will obtain financing.
In a sellers’ market, the cash buyer is simply looking for an advantage over other buyers. They are not using the cash as a weapon against the seller. Cash is looked at as a good thing by sellers. In a buyers’ market, sometimes sellers see cash as a bad thing simply because cash buyers act differently in a buyers’ market.
Cash buyers fail to realize in a buyers’ market it is all cash to the seller. No matter if the money comes from buyer or the bank. Today, appraisals can lag, so a seller never knows if the buyer can perform when the appraisal misses the mark. For this reason, sellers are asking for a pre-approval letter and proof of funds showing the buyer can pay the difference in cash if the home does not appraise for purchase price.
Of course, you must insert language into the contract addressing appraisals and what will happen if the home does not appraise. The Ellis Team has been successful at pre-negotiating what will happen in this instance. Doing this upfront takes the uncertainty out of the sales process.
This assumes you have selected the correct offer to begin with. Picking the wrong buyer will blow up a deal before it even begins. Clever buyer agents write up deals just to win the bid. This does not mean it will actually close. This is one reason we are seeing so many homes come back on the market.
Most agents believe homes coming back on the market is a function of buyers offering on multiple homes and then backing out of all but the best deal. While some of this is happening, still more fail because the wrong buyer was selected as the winning bid.
An experienced agent can help you decide which offer is better. Of course, obtaining multiple offers requires substantial marketing. We are marketing into northern states where the buyers are coming from. Our roads have less congestion, and many have gone home. They are still looking to buy, but how will they know your home is waiting for them if it is not marketed heavily?
This is where we come in. Ellis Team marketing more than pays for itself. It gives sellers an unfair advantage over other sellers. We put more money in your pocket. If you are thinking of selling, we should talk!
Call Brett or Sande Ellis 239-310-6500 or visit www.SWFLHOMEVALUES.com for a free and instant estimate of your home’s value.
Good luck and Happy Selling!