Reflection Lakes Archives - Fort Myers Real Estate and Homes For Sale

For the past year or more we have been telling readers now may be a good time to sell. The market statistics prove that, and yet not everyone is doing it, including Realtors. This year I took my own advice and decided to make a move.

It’s not that we were unhappy where we lived. It was a great neighborhood and a great house. Our needs changed, and this market provided an opportunity that was too good to pass up. If you love your home and your needs have not changed, you don’t need to sell just because there is an opportunity. But if you have been thinking about what a move would look like to better your situation, the opportunity is there.

Took My Own Advice

For us we had 4 children, and the last is graduating high school this year and moving on to college. My wife and I do not need a 5-bedroom 2 story home for just the two of us. We were torn because we loved the community so much.

We put in a contract at a new home community. That home is schedule to be built this year. Later we listed the home we lived in and it sold within 9 days. The buyers are thrilled with the home and we were able to jump into a rental that opened while ours is being built.

Not only did we get a good price for our existing home, but our future home has also already gone up $27,000 in price since we signed the contract, and they haven’t even broke ground yet. This market is a win/win market for buyers and sellers.

Sellers get to take advantage of Top Dollar. Buyers also win, because home prices are rising, and about a week after they move in the home is worth more than what they paid for it. In fact, many times it is worth more before they close.

Values Are Changing by the Week

Our home for example appraised for $20,000 more than what we sold it for. You might say how did you sell it for Top Dollar but below appraised value? After we signed the sales contract with new buyers several comparables closed which pulled the value higher. It is a fluid market and values are changing by the week.

Do you know what your home is worth in today’s market? If you have not had a thorough market evaluation and tested the market, then you really don’t know. In the absence of sales data, we have been forced to put homes on the market at prices higher than any recent sales. Then along comes several buyers we attracted through our marketing, and it sells for even higher than list price.

The market is setting new valuations right before our eyes, and the only way to get top dollar is to put the property on the market and market it. We may set a price higher than the last sale and the market may scoop it up anyway, and then some. They key is attracting multiple buyers.

Best Way to Determine Market Value

May times a seller has a tenant or family member that wants to buy their home. They get an appraisal to find out the value. But is that really the value? An appraiser is looking at yesterday’s value because all they can work with is what has happened in the past. They do not consider what is happening today, and what will happen next week when we place a home on the market.

If you own a home and want to explore your options, call Sande or Brett Ellis at 239-310-6500 Our marketing is different, and we can show you how to maximize the sale of your home. You’re going to need it where you’re going, so why not get it?

We can even help you with your next home. Or visit www.SWFLhomevalues.com to get an idea of what your home is worth. Our website will even email you your new price every month so you can keep track.

Good luck and Happy Home Selling! Always call the Ellis Team at Keller Williams Realty for Top Dollar!

We are part of a Top real estate agent mastermind group from Lee and Collier county whereby several top agents come together to talk about current issues in the real estate market. At last week’s meeting we talked a lot about inventory levels and how top agents are handling offers as well as a variety of other things.

Top Conclusions

Here are some conclusions that came out of that top real estate agent mastermind. In other markets across the country where inventory levels approach the 2–3 week supply of homes, buyers are being forced to make offers with no contingencies to win the bid. When we say no contingencies, we mean no financing contingency or inspection contingency. In other words, when the buyer signs they are not backing out over financing, appraisal issues, or inspection issues.

If a buyer is getting financing and the home does not appraise, it would require the buyer to pay the difference in appraisal price and purchase price plus their agreed upon down payment for the loan. There is an exception to this whereby the buyer may qualify for a lesser down payment option, but in either event the buyer must be in financial position to put more down. This weeds out some of the buyers, which is OK when you have multiple buyers bidding for homes like we do today.

This brings us to highest and best. The definition of highest is bring your highest price. Best means bring your best terms. Buyers today are winning out on not only price, but maybe more importantly the terms. Lastly, relationships matter most in this market. Top real estate agents know who the other great agents are. This is important because they know their buyer has been counseled appropriately. While an agent cannot be judged on how their buyer will act, we do know that better agents do a better job counseling their clients. Who you work with matters in this market, both on the buying and selling end.

Pricing Strategies

The top real estate agent mastermind group also talked about pricing strategies for sellers. Many sellers do not realize that property values are changing by the week. If sellers really knew what their property was worth, they might think again about how tied they are to the property they are living in. Does your property fit your needs or are you settling because you have lived there so long? With today’s prices, you may not have to settle.

Many sellers honestly don’t know where they would go if they sold their current home they don’t love. There may be more solutions than you know. Sales in the last year are rising even as inventory lowers. While we may not have as much current inventory, we are getting enough to satisfy more buyers, it just goes quickly. If we know in advance what would make you move, we can call you when we run across your next home even before it hits the market.

Creating Our Own Market

Imagine home buyers bidding on your property while you find an off-market home that hasn’t been listed yet. This requires a massive database, and at the Ellis Team we have a database of people who might make a move if the right situation came up.

So, we ask you, is there a price at which you would sell your home with only one showing? We might already have your buyer. Is there a home that if it came on the market would make you want to move? We might already have that seller.

We should talk! Call Sande or Brett Ellis 239-310-6500 and we will see if we can make your dreams a reality. This is the market to do it, so do not let this opportunity pass you by. Or visit www.SWFLhomevalues.com to get a free instant price for your home. It will even email you each month your new home value.

Good luck and happy home shopping!

Interesting trends are developing in our Southwest Florida market snapshot for January 2021. The first thing you will notice from the graph is new pending sales increased 25.6% over January 2020. You might ask how this can be as we have been talking about declining inventory levels for months.

Official numbers are in and indeed active listings are down 60.1% from a year ago. New listings entering the market in January of this year were down 10.4% from last January. The combination of fewer newer listings and increased pending sales have led to the 60.1% reduction in listings.

Pending Inventory is Up

Pending inventory in January increased 51.6% which means the situation will be worse when official February numbers are released. Buyers who have attempted to purchase in this market are keenly aware of how tough it is to score a property.

I do not believe sellers are truly aware how advantageous this market is for them right now. After years of letdown some sellers just quit checking in on their home value. Others are interested but unsure where they would go. I think it is safe to assume there are many homeowners in SW Florida that do not love their current home. They’re just not sure they want to jump through hoops to make a change right now.

The real question is this? When will you be ready? A year from now, two years from now? What if this real estate market looks different than it does today? Interest rates could be a few percentage pints higher which will increase cost of future buying. Not only will it cost you to get a mortgage on your next home, but it will also cost your future buyer as well. That may limit how many buyers can purchase your home in the future.

Right now, we sometimes have 20-30 buyers putting in offers for each home. What happens if we only have 1 buyer for each home in a few years, or worse? In a normal market there are more home sellers than actual sales. This would mean less than 1 buyer for each home.

When is Best Time to Sell?

If you were selling an item at auction do you think it would be more fun to have 20 bidders or just one bidder? If there was just one bidder, there would be just one bid, and if you wanted to sell you would have to take that price or decide not to sell.

Our marketing is creating buyers from all over the country. I have seen some statistics that show more than half of the buyers are from out of state currently. To get top dollar you must advertise out of state. Ellis Team advertising reaches far and wide to bring the greatest number of bidders (offers) for your home.

When homes increase in value like they are today human nature tells us to hold because values will be greater tomorrow than they are today. This may be true, but history also shows us that many wait too long and decide to sell after they have seen the top. They still want the top, but the top has since passed. By then it is too late. The top never tells us when it is coming, so most are surprised when it happens. We are not calling for a top, so do not be alarmed. But do not blame us either if it happens and we did not see it coming.

We Should Talk!

If you are thinking of selling now, or 1-2 years from now, we should probably talk. We can come up with an exit strategy for you, and if we see a shift in the market you will be the first ones we call. The last time the market shifted we told our sellers first and got them out quickly.

You do not want to be caught sitting on an appreciating asset only to find out it started depreciating and the market did not tell you. We will tell you. Simply call 239-310-6500 and we can provide a market checkup for you. This will allow you to be notified if the market shifts. Or you can visit www.SWFLhomevalues.com for a free instant analysis.

Good luck and keep an eye on the market!

A few agents and I were sitting around talking about the future of Florida real estate. One agent speculated that this market could not last forever and would one day have to come down. His theory was that everything that goes up eventually comes back down and that cycles are inevitable.

Then we got to thinking. What if this market doesn’t have to come back down? Is it possible Florida has been undervalued compared to other nice areas of the country?

Why Are People Moving to Florida?

Let’s talk about why Florida looks so attractive, and what the future may hold. Everyone knows Florida is famous for sunshine and beaches and almost perfect weather in the winter. Florida is also attractive because we have no income tax, which is substantial compared to some states that have both state and local taxes.

Florida has also been business friendly without all the lockdowns other states have endured. We are seeing businesses flock from lockdown states and moving to Florida, bringing employees with them. The real question is, what will happen in a few months once the vaccine is widely distributed and lockdowns end?

Some business owners we have talked to have had it. Their fed up with restrictive policies and high taxes and they are not moving back no matter what. It is probably safe to assume that anyone who has moved away from high tax states is not moving back. The real question is, what will the people who wanted to move but just couldn’t yet do? Will they further their plans to make the move or just stay put?

It’s Hard to Just Pick up and Move

Some people have ties to an area. Some businesses have been in the family for generations and walking away isn’t as easy as it sounds. It takes careful thought and planning, and there are pros and cons. If these states continue to raise taxes and have high crime, it may chase the next wave of businesses and residents away as well.

People have learned through this pandemic that many jobs can work from anywhere. Companies have learned they can save high lease rates on buildings if their employees work remotely or move to less costly locations. This pandemic may have been the impetus for a transition that benefits the company and its workers, and that ship may have sailed.

Florida is the big winner in all of this, and if it continues, strong demand may not slow up when Covid comes under control. In this scenario, prices could rise further as we are not building enough homes to meet the demand.

It is true that business tends to follow cycles, but that is premised on demand rising and falling. What if demand does not fall? Supply is limited, and if demand stays constant or rises, we have more appreciation to go. We could see a lot more.

Future Warning Signs

It is also true that nobody knows the future of Florida real estate, or the economy for that matter. Rising oil prices and inflation could slow the economy and kill jobs. Florida still has a lot going for it, and that might offset whatever happens to the economy. Realtors do not know what will happen in the future. We believe more sellers will decide to cash out in a month or two as Covid becomes safer, but will it be enough to meet demand?

The bottom line is the market is good, and we expect the future of Florida real estate to be good for a while. There are a lot of wildcards in play that could affect things a few years down the road, like immigration, cost of building, oil, taxes, interest rates, inflation, etc. We are starting to see people cash out of Wall St and put it into main street. Some people thought the Dow was overpriced at 18,000. Now it is over 31,000.

Prices in Florida have risen, and we still might be a bargain. Just not the bargain we were in the past. To find out what your SW Florida home is worth, visit www.SWFLhomevalues.com It’s fast and Free. Or call Sande and Brett Ellis 239-310-6500

Good luck, and Happy Selling!

You would think rising home prices would decrease home affordability. This simply is not the case as the home affordability index nears all-time highs.

If you look at the chart, home affordability was greatest back in 2012. Median home prices averaged $131,000 for the year compared to $289,000 in 2020. Today home prices are higher, so we took the yearly average.

So, what would cause affordability to rise if home prices are also rising? Interest rates. Lower rates equate to a lower mortgage payment, and it offsets the rising cost of the home. Therefore, we are saying there is more room for further price increases.

Home Affordability Index Nears All-Time High

The home affordability index currently stands at 16. It went as low as 13 in 2012 and hovered below 16 for 5 years. The other thing that is different today is that we have end users for every home and rental. Back in 2005 we had speculators bidding up prices to flip with no real end user in sight. It was a house of cards. Today’s market is no house of cards. We have legitimate demand. In fact, we have more demand than supply.

Even if rates rise, we have room for that in the index. As you can see, traditionally the index stands between 19 and 22. At 16, we have some room if rates rise. If interest rates do not rise much, we have room for further price growth.

Furthermore, we believe Florida has been undervalued for years relative to what it brings to the table. Sunshine, low taxes, and freedom to work are just a few, and people are taking notice. With the transition to work from home jobs, Florida is on the radar. We just might see affordability numbers rise above their traditional numbers of 19-22. That makes sense to us.

Of course, nobody knows what exactly will happen. We do not know how much the price of oil will increase, what interest rates will do, and how the economy will react. We do not know if northern states will continue to increase taxes, and we do not know what Covid-19 will do. What we do know and are observing all looks favorable to Florida.

Our best advice for buyers would be to purchase as soon as you can. As prices rise, and interest rates rise, your next home will inevitably cost you more than it does today. If you have a home to sell, think about doing it now. Waiting to get more money down the road will only cost you on the buying end. It may cost you more in higher rates than you will receive with a higher price.

Our best advice to sellers would also be, do it now. You are in the driver’s seat, and that’s a fun seat to be in. While the market looks on the up and up, we never really know how long these markets will continue like this. While we can make the case for increased prices, the price gains may not continue to rise at the same rate we have just witnessed.

History shows us the market never gives advanced warning when it is going to turn. Sometimes we see signs, and we report those. We are not seeing those signs, but someday we will and there will be those that miss out. It always happens and will until the end of time. It is true in the real estate market and the stock market. You can never time the top perfectly, just as you cannot predict a bottom perfectly. It is only after it occurs that we can tell you with certainty.

If you are thinking of selling, call Sande or Brett Ellis at 239-310-6500 or visit www.SWFLhomevalues.com for an instant home valuation.

See last week’s article “National Housing Supply Shortage Predicted Years Ago”

Good luck, and happy selling! Don’t miss this market!

New Opportunity in Whiskey Creek

Lee County home sales outpace available listing inventory in Cape Coral year to date and it is only February 10 as we write this article. The numbers in Fort Myers and all of Lee County tell a similar story.

Is it possible to reach zero inventory? We believe the answer is no, just like we will never see zero unemployment, for a variety of reasons. Some sellers will never sell no matter how hot the market is, and some people will never get a job no matter how good the job market gets.

Lee County Home Sales Outpace Available Listing Inventory

We are at or near 1 month supply of inventory in several price ranges. In my 31+ years of selling real estate in Lee County I have never seen this before. To make matters worse, builders are turning on and off the building spigot. We covered that extensively in last week’s article.

Where will inventory come from? Buyers are still moving to Florida in droves from New York, Illinois, California, and other states. Demand is not going away. We have pressure on the market. Not every buyer is going to get a home. Only the buyers willing to step up and win the game are securing homes.

Many Realtors are asking, how low can inventory go? We have been watching inventory draw down for the better part of two years, and now it is getting critical. We have a message for both buyers and sellers.

Sellers

Sellers now is your time. You are in the driver’s seat. It has never been more fun to sel a home than right now. If you are priced and marketed correctly you will have multiple offers to choose from. The agent you hire to represent you will make all the difference. Choosing the wrong offer can cost you, just like choosing the wrong agent. If you have questions about how that is possible, talk to Brett or Sande Ellis before you list, and we will talk about that.

Choosing the wrong offer is just as bad. If today you knew the offer in hand would not close, would you take the offer? Of course, you wouldn’t. This is another reason why hiring the right Realtor with experience matters. Experience is the ability to see the future because the agent has been there before. The Ellis Team has closed over 5,000 homes, so we have seen some things. We have that Spidey sense because of experience.

Buyers

Buyers, you are in competition with all the other buyers. Forget about trying to out negotiate the seller. You will out negotiate yourself right out of the deal. In a balanced market where you are on equal footing, it is a different story. This is not a balanced market. You must play the game to win, or you are going to lose. This may not matter if you do not really need to buy and you are comfortable in your current housing situation. If you need to buy, get comfortable being uncomfortable. You need an agent that knows how to win.

Back to Sellers

Do you know what your home is really worth today? Is there a number at which you would sell? What if your home is at that number and you did not realize it?

Call Brett or Sande Ellis 239-310-6500 or visit www.SWFLHOMEVALUES.com to get an instant value. The best part is the system will email you your home’s value every month as it changes. You will know when your home finally hits your number.

Good luck and let us know how we can help you in this market. Experience wins. We can help you with that.

Zillow buys ShowingTime and what that means for the industry.

We have seen several home builders halt new construction sales for several reasons. The two major reason are costs and quality control.

Costs are rising rapidly. For instance, lumber costs have skyrocketed recently. I found an article online that said the lumber price spike has added about $16,000 to the typical home nationwide. Lumber is just one component in a home. Home builders are literally outselling what they can build in SW Florida, and they must be careful. When your plant & machinery is down and you need a hydraulic repair service, you want FAST evaluation & diagnosis, & and a first-class professional repair done in the shortest possible time. In every construction site, it is important to have someone who knows how to operate equipment properly, companies like Forklift Training Systems, offers a train the trainer course for the forklift trainers.

If you outsell what you can build, it adds to the build times. As you add to the build time, there is more chance for increased costs. In a hot market you would hate to contract for a home and lose money on it by the time you get it built. Even if they do not lose money, they want to maximize profit. Home builders halt new construction sales simply to protect themselves. If you are a construction manager, you should familiarize yourself on how a performance bond works.

Homebuilders Selling Too Fast

One home builder said they were selling a home every 50 minutes. We know of several custom home builders locally that have limited what their sales agents can sell. These limits can change daily. Overselling is bad for two reasons. You do not want to set the expectation it will take 6-9 months and deliver the home in 18 months. Customers will not like that. Secondly, they do not know what costs 18 months from now will be. Costs are going up, so they need to raise the home prices to cover those costs.

When shopping for a new home it pays to work with a Realtor that knows who can build and where the inventory is. Occasionally new home sales fall out and the buyer cannot close. If you work with an experienced Realtor with connections, you may find out about these homes first. If you’re late, you’re last.

Resale Market Hot

The resale market is still a place to keep an eye on too. New resales enter the market daily, but not enough to satisfy demand. Speed is the name of the game when it comes to securing a new or resale home. Make sure you are pre-approved for a mortgage. If it takes you a day or two to get pre-approved, you have already lost. Do that first before you go home shopping.

Remember, you are not negotiating against the home seller. Your competition is all the other buyers shopping to get the same home you are looking at. Structuring your offer to win is the key. This is where an experienced agent can help. What seems like good terms to you may not be the best offer to the seller. An experienced agent knows how to make your offer look stronger. Price is just one factor, and you can only bid so high. There are plenty of other factors along with price that can make or break your offer.

Sellers Pay Attention

Sellers, it is time to pay attention! There has never been a better time to sell your home. I just put my own home on the market. I am taking my own advice. There is more demand than there is supply. Buyers are forced to offer full price or more in many cases to win a home.

As builders raise their prices it will help pull resale home prices up with it. We have seen home builders increase their prices over $100,000 in some neighborhoods in the past few months.

Interest rates are low. Demand is high. If you are thinking of selling, call Brett or Sande Ellis 239-310-6500. For a free instant value of your home check out www.SWFLhomevalues.com. Not only will you get an instant price, our system will also email you each month your home’s value change in value. That is a handy tool in this market.

If you are buying, go to www.LeeCountyOnline.com It is updated in real-time which means you will have the best data. Remember, speed wins in this market.

Good luck, and Always Call the Ellis Team at Keller Williams Realty with your real estate needs!

You’re Not Going to Believe This

New Listing in Reflection Lakes

13855 Bald Cypress Cir

Video Tour

Official Lee County real estate sales price statistics are out, and it reveals a 20.2% increase in the last year. Median sales price rose from $262,000 December 2019 to $315,000 December 2020. Average sales prices show an even greater gain. December 2019 average sales price was $346,857 compared to $455,685. That is over $100,000 gain and a 31.4% increase.

The rate of gain is not sustainable. Do not expect prices to rise 30% year after year. There is room for further price gains, but not at that rate. Low interest rates are helping buyers afford more home. High interest from out of state buyers is also fueling demand. This trend picked up 4 years ago and we expect that to continue. So, you may want to check out a group like Eliason Realty for great home options.

Florida a Work From Home State

Covid-19 has taught us much of America can work from anywhere. With that being said, many are choosing to exit big cities and work in less crowded areas with better climate and lower taxes. Florida stands out as an excellent choice. I read an article yesterday that showed Florida is now the most attractive state for net migration from other states.

Fort Myers was also named the fasted growing city in America by Business Insider. The Fort Myers/Cape Coral area has been undervalued for years. If you go back and read our past articles, we talked a lot about Florida having 67 counties, and two saw price gains below the state average. Those two counties were Lee and Martin counties. Eventually this equalizes, and the world has taken notice. If you are an out of state buyer looking for sunshine and a nice place to live, you are not necessarily tied to one area.

Naples and Bonita have always been expensive compared to rest of Lee County. I remember the day when Bonita was not expensive, but recently it has been as growth filled in. Growth is marching right up the coast and now Fort Myers is the bullseye. Therefore, we are seeing price increases greater than some areas and it will continue.

Excellent Buys if You Know Where to Look

There are still some excellent buys out there, both in resale and new construction. We need more new construction to help with demand. We are seeing builders raise prices dramatically on lots, home construction, and pool costs. Some of that is demand, and some is increased costs for lumber and supplies.

New construction prices rising dramatically will help pull resale prices even higher. When new homes go up $100,000, resales follow. We expect 2021 to be another great year, but some buyers are getting priced out of the market. The market does not care who buys the home. An out of state buyer with more money may be able to pay more than a local buyer.

We are seeing buyers having to adjust where they want to live as some are getting priced out of their desired neighborhood due to real estate sales price increases.

Getting Top Dollar Not Easy For Everyone

We are also seeing For Sale By Owners giving up and hiring Realtors. Getting top dollar is not easy if you do not know how to reach today’s buyers and you do not know how to close the transaction. Anybody can find a buyer, but can you find many? Today there is typically more than one buyer for every property, you just have to find them. When you have more buyers to choose from, you will get a better price.

An experienced agent also knows how to select the best offer. It’s not always price. We are looking for the buyer most likely to close. If you have questions on that, reach out to Sande and Brett Ellis at 239-310-6500

Some people like our Free Instant Home Price Evaluator. If you are thinking about selling, we can validate the price and make sure it is accurate. Prices are changing by the week, so do not leave money on the table. Always call the Ellis Team at Keller Williams Realty!

Good news for home buyers and home sellers in Lee County. Conventional loan limits increase to $548,250 in Lee County. The previous loan limit was $510,400. Because sales prices have increased this past year the loan limit was increased.

If a buyer wished to finance over the $510,400 it made the loan a jumbo loan. The interest rate may have been higher and the underwriting guidelines in some cases could be stiffer because jumbo loans are not insured by FNMA or Freddie Mac.

Conventional Loan Limits Increase

The increase to $548,250 means a buyer can pay more for a home and still meet conventional loan guidelines. Interest rates are around 2.5% for people with good credit. This eases down payment pressure for many buyers who need a conventional loan.

Let’s say a buyer wanted to buy a home for $600,000. Under the old guidelines the buyer would have had to put $89,600 down to stay in a conventional loan. Today the buyer could put down $51,750 and still meet conventional guidelines. That would be 8.6% down payment which is acceptable.

With conventional loans the buyer can put down as little as 3%, but 5% is more realistic for most people. The PMI rate (Private Mortgage Insurance) declines the more a borrower places in down payment, and it disappears entirely if buyers put 20% down.

Buyers Can Afford More Home

The bottom line is buyers can absolutely afford more home today than they could last year. Down payment requirements are less and interest rates are less. This is good news because prices have been going up, so this alleviates that pressure.

This is one more reason we believe there is still fuel to power prices higher. Of course, low rates will not help if the economy crumbles or demand falls. We do not see any signs of demand falling. In fact, Florida is more attractive than ever to northern buyers in high tax states. Companies are leaving northern states and relocating to Florida, so it is not just remote workers making the switch.

Conventional loan limits increase benefits sellers as much as buyers because more buyers now qualify for the same property. We already have multiple offer situations on many properties, and the conventional loan limits increase may add to the demand for properties priced $535,000 and higher.

In the coming weeks we will report final 2020 real estate market numbers. To date we have official numbers through November, and we expect 2020 to end with a bang. Traffic on our roads is busy, and our team has been busy working with buyers from all over the country attempting to purchase a home.

By all accounts, 2021 should be another great year. The only thing that may hold it back is lack of inventory. Sales could decline simply because we do not have enough inventory.

Considering Selling?

If you are considering selling, please call Brett or Sande Ellis 239-489-4042 Ext 4. Now may be the best time. Our marketing is reaching local and out of town buyers, and they are making offers. Our team is working harder than ever for our clients. We are getting sellers who list with the Ellis Team top dollar. It is always more fun to sell when we attract multiple buyers for your home. Sellers can sit back and select the best offer, but that is only possible when you saturate the market. Advertising locally and nationally is the key.

Or you can check your home’s value instantly at www.SWFLhomevalues.com Prices are changing by the week so it pays to keep up. Is there a price you would sell your home at? If so, perhaps we should talk. Always ask for Sande or Brett Ellis. There is no substitute for experience.

January 2021 SW Florida Real Estate Market Update

Many properties listed today in SW Florida are receiving multiple offers. How would a seller know which offer to take? Today we offer our selecting best multiple offer tips for sellers.

Selecting Best Multiple Offer

It is logical to assume the highest price would be the best offer, but that may not always be the case. Of course, a seller wants to maximize how much they can get out of the home. Of equal if not greater importance is the likelihood the buyer can perform. It does no good to accept a higher offer that is unlikely to close.

It is important that the listing agents knows all facts about the home. For instance, some homes may not qualify for an FHA or VA loan. There could be some insurance uses, or property condition issues imposed by the lender. Some buyers may not be able to cure deficiencies placed by their lender, and it has nothing to do with the buyer.

Purposely Bidding Up Home to Win Negotiation

Some buyers purposely drive up the price with their offer banking on the fact the lender will knock it back down with the appraisal. If you are selecting best multiple offer based solely on price, you might be surprised later if the home does not appraise. A buyer may have the option of buying the home above appraised value provided they are putting down enough to cover the difference for the loan they have applied for.

For instance, let’s say a buyer is putting 50% down. Chances are they are going for a conventional loan needing only 20 or 25% down. Because they are putting more than that down, they already have the difference if the home does not appraise by a little bit. Now if the home only appraises at 50% of purchase price you would have a problem because the buyer would not have anything down. Banks base their loan to value ratio off the value, not the purchase price.

Obviously, an all-cash buyer does not have appraisal worries, unless they add an appraisal contingency. In that case, the home must appraise for purchase price or buyer is not obligated to complete the purchase.

Remove Appraisal Contingency

Back in the foreclosure crisis buyers were bidding up foreclosure deals and getting financing for the new purchase. The seller (foreclosure bank) wised up and started adding language that if home did not appraise the buyer would be responsible for the difference. This basically stopped buyers from outbidding each other just to score the deal. Most of those buyers could not pay the purchase price because the new bank would not lend on it. The seller would have been better off taking a lower bid with a buyer that could actually complete the sale versus buyers that could not.

The condition of the home may influence which buyer’s offer to take. Knowing that a certain type of loan may not accept certain property conditions may save you from going down the road with the wrong type of loan. All of this takes knowledge and experience, and therefore it pays to hire the best Realtor you can find. Hiring the wrong Realtor can cost you thousands of dollars, even in a hot market.

Full-time agents that have thousands of deals for experience have seen a thing or two, and therefore know how to deal with issues before they become problems. And when problems do arise, and they inevitably will, possessing that knowledge and experience pays off in solving the problem.

Bottom Line

The bottom line is an experience agent is more likely to get you top dollar and keep your deal together than an inexperienced agent, no matter how much determination they have. There is just no substitute for experience. This is not the market to experiment with an inexperienced agent.

If you have a home to sell, call Brett or Sande Ellis 239-489-4042 Ext 4. Brett and Sande have sold over 5,000 homes, and we know a thing or two. If you are looking at purchasing, our team of buyer agents work directly with Sande and Brett. Our knowledge helps you structure the best offer. Buyers can search the MLS at www.LeeCountyOnline.com Sellers can visit www.SWFLhomevaules.com to get your home’s value online instantly. Let us know if how we can help you!