Category Archives: Reflection Lakes

Reflection Lakes topics of interest and information. Market updates.

Local Home Sales Highest on Record

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Recent statistics show local home sales highest on record.  Keller Williams Realty International predicts 2021 will be the 5th best year in real estate sales nationally just behind 2020 levels.

Local Home Sales Highest on Recrod

Locally we are seeing a slowdown in the number of homes closed.  The tail end of this year could bring fewer transactions, but will the slowdown be enough to place us behind 2020 numbers?  Through July home sales are up 38.33%. We only need 4,328 sales from August through December to match 2020 levels.  That is approximately 866 homes per month.  Our lowest month of the year was January at 1,221 homes sold, so it is likely 2021 will set another record.

Local Home Sales Highest on Record

The frenzied pace of home sales has eased a bit, but many homes are still receiving multiple offers, especially if they are in good condition.  As companies return to work Florida may not be the work from home darling it once was.  However, it remains to be seen what effect the Delta variant will have on companies work from home policies going forward.

We are hearing cases in Florida have leveled off and cases up North may be increasing.  If this continues, Florida may become the work from home darling location again.

This is good news for home buyers.  Buyers will have more choices and less price increases to contend with.  Rising interest rates are like a hidden price increase because it increases the cost of ownership.  We would suggest buyers take advantage of any home they like because even if prices level off that home may cost them more in the future.

Sellers Beware

Sellers should beware.  If the SW Florida real estate market is properly valued, rising rates will have a negative effect on buyers.  For years we felt Florida real estate was undervalued.  With recent price increases, Florida has come more in line with the rest of the country.  Who is to say if we are properly valued or not?  The point is, it feels like values may bounce around where they are now, but who knows.  Rising rates will put pressure on buyers who need to finance.

This past year sellers have been blessed by cash buyers from up North.  We will be tracking cash sales going forward as that will be an indicator of how much fuel there is for rising prices going forward.

Covid Declining in Florida

The good news for Florida is that Covid cases have begun declining.  They are much too high right now, so we are glad to see a plateau.  As the weather turns and Floridians go outside in the Fall, northerners will head inside more in the Fall and Winter.  We may see a decline in cases in Florida and a rise in cases up North.  If this scenario plays out, we could repeat this past year’s process all over again and Florida could become the darling.

As regular readers know, there are several wildcards we look for.  I feel like this year we are tracking new wildcards.  I don’t know of anybody who can say with any certainty what the future of real estate is for SW Florida.  We will continue to report what we do know with facts.  We make assumptions and educated guesses from these facts and we hope you appreciate our attempt to explain what we are seeing in the trenches.

Our guesses may turn out to be 100% correct, or 100% false, or somewhere in between.  Perhaps we are looking at the wrong indicators.

Real Estate Questions?

If you have real estate questions, or would simply like to talk about your situation, call Sande or Brett Ellis 239-310-6500  You can also visit www.SWFLhomevalues.com to get your home’s online value.  Not only is it fairly accurate, but it will also keep you updated as to your home’s price direction.  In other words, even if you disagree with the computer’s price estimate, you will be able to track the direction of your home’s value monthly.  Sellers really like this feature.

Brett or Sande can get you a more accurate price for your home when we meet.

Good luck and Happy Selling!

See last week’s article “Lee County Sales Prices Hit Pause in July“

Have Real Estate Prices Leveled Off?

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If you look at the graph it would appear that real estate prices leveled off the past few months.  Is that really the case?

Real Estate Prices Leveled

Median and average prices are up 36% in June over 2020.  That is a huge gain and expecting future gains like this is not sustainable.  Let’s dive into 3 key price components to get an idea on where this market is headed.

  1. Most of the price gains you see reported monthly have already occurred. For instance, May’s numbers were up 38.7% over last year. June’s numbers are a continuation of those gains that have occurred because they are year over year, not month over month.
  2. It is not uncommon for prices to adjust backward month over month in June. Traditionally April and May are the biggest price months and prices slip back in summer. It is the seasonality of the market as to when higher priced homes sell in SW Florida.  This graph doesn’t go far enough back to show this.
  3. Listings are on the uptick even though we are still too low. Listing inventory peaked in February 2019 and has been on a steady decline since then. Typically, inventory does not pick up in April, May, and June, but it has this year. Is the increasing inventory enough to make a dent in this market? Not yet, it is still way too low.

So, what can we take from all of this? Prices can continue to gain going forward, but not at the 30% plus rate.  Future price gains depend on listing inventory, interest rates, the economy, and northern states buyers continuing to see Florida as a better alternative to where they are now. We doubt real estate prices leveled off, but gains will be more moderate going forward.

Inventory is Rising

Listing inventory is rising.  Home inventory does not usually rise this time of year, however Covid may have influenced timing is seller’s decisions. Many sellers were prevented from coming to Florida to get their home ready.  Others did not want to sell while they occupied the home during a pandemic.  It is possible Covid put off some sales decisions and altered the timing of when listings hit the market.

June 2021 Listing Inventory Levels

Inventory levels will be something we watch going forward.  It is quite possible all the typical historical seasonality and trends will be off until the economy and real estate market rebalances itself.

Is Now the Time to Sell? 

If you are a seller, now is a good time to sell.  Inventory is rising but not to an extent that will hurt home sellers.  We are still seeing multiple offers on properties.  Buyers still outnumber sellers.  Sellers hold the advantage right now, and it is always more fun to sell when you have the advantage.  When buyers hold the advantage, they do not care about how much you want or need for the home.

Buyers today are not in competition with the seller.  They are in competition with other buyers for the home they want.  When the market turns, the seller will be in competition with other sellers.  Right now, sellers have little competition.

After the Fall, season will be here before we know it.  We do not know what the Covid landscape will look like, which states will be open, or if we will have Covid issues at all.  Right now, we do, and the economy may tighten down again.

We are writing this article before the Fed releases comments from their July meeting.  How the markets react to these comments and the future of interest rates could impact the stock and real estate markets.

If you have contemplated selling, call Brett or Sande Ellis 239-310-6500 and get the facts.  Home prices are going up, but for how long?  If you just want a quick home price for your home, go to www.SWFLhomevaules.com Our online value system will give you a good estimate of your home’s value, and it will email you every month the price changes.  Even if you don’t agree with the actual estimate, you will be able to see which direction the market is moving for your home.

Don’t Settle for Appraised Value

Of course, Sande and Brett Ellis will be happy to visit your home and give you a more detailed value for your home if you would like.  We can show you how our marketing is getting sellers more than the price estimates of their home and how we generate multiple buyers.  Don’t just sell for appraised value when you can get more in this market.  You need the right Realtor to do this. Brett and Sande have over 30+ years and over 5,000 transactions experience, so we know our stuff.

We look forward to helping you!

SW Florida Listing Inventory Rose 11.24% in Past Month

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Good news for home buyers.  SW Florida listing inventory rose 11.24% in the past month.  Buyers cannot rejoice as listing inventory is still low.  In fact, currently we have 1,336 listings in Lee County.  Last year we had 3,044, and that number was low.

SW Florida Listing Inventory
SW Florida listing inventory July 2021

We track the number of listings as well as the 365-day rolling number of homes closed.  Homes closed in the last year were up 2.14% versus last month.  It may take a little while for closings to catch up to the new inventory coming to the market.

It is too soon to know if rising inventory will become a trend.  We have a serious backlog of buyers, and it would take quite a few new homes on the market to meet that backlog.  We are hearing from the Northern markets that inventory is building, and homes are taking longer to sell.

Florida May Buck National Trend

The resurgence of Covid could also affect the market.  We are not sure how.  We have seen interest rates fall in the past few days because of speculation Covid could slow down global markets.

If real estate markets slow down up North, could that trickle down to the Florida market?  It could, but then again, Florida is attracting buyers from other markets.  It is only natural that one day those markets will lose residents who sell and do not replace in their state.  Many are replacing in their home and moving to Florida.

The U.S. economy generally affects the real estate market, but all bets are off now because the markets have not been behaving in a normal way with so many relocating to Florida.  Reasons vary by buyer.  Some choose Florida because it is a low tax state.  Others choose Florida because it did not lockdown like other states.  Still others appreciate the relaxed mask standards implemented last year.

Whatever the reasons, Florida seems to be an attractive place that may drive buyers here for years.  Not all buyers can simply pack up and move.  Sometimes it takes years of planning.  Family could be involved as well as a business.  Once a decision is made, it can take a while.

Has Market Peaked?

 Many sellers ask us when will the market peak?  We believe when June’s official numbers are released, we will see big numbers.  The same holds true for July.  Are there as many buyers bidding on each property?  Maybe not, but each property we list attracts many buyers.  Because inventory is still light, it will be interesting to see what happens next season.

The economy will not hold at this pace either.  Economic numbers released today are compared to last year’s Covid economic numbers. So of course, they will be great.  Economic numbers are expected to taper off as we get into the 1st quarter of 2022.

We see a good housing market in Florida continuing for the next several years.  We should not see rising prices like we have seen recently, but they should still rise.  Inflation will bring about higher costs to build.  Inflation could also eat into buyers spending money, so it is possible interest rates may stay low unless we see runaway inflation.

Nobody wants to see runaway inflation.  Inflation is like a hidden tax.  We will be watching inflation numbers through the 4th quarter of 2021 to get a read on whether it is transitory or real.

Now May be Good Time to Sell

If you are a seller, now might be the time to have a conversation with us about how much we can sell your home for.  While home prices may rise further, we believe we have seen the brunt of the increases.  Call Brett or Sande Ellis 239-310-6500 or visit www.SWFLhomevaules.com to get a quick estimate of your home’s value.

Now might be a good time to capitalize on this market while prices are still going up and before additional inventory hits the market.  It is always fun to sell to multiple buyers than waiting around for a buyer to make an offer.

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

Florida Homes Sold Above Asking Price in 2021

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The most common question we get from buyers is what should I offer on this home?  The most common question we get from sellers is what price do you think I should list my home for? In May, 55% of Florida homes sold above asking price.

Florida Homes Sold Above Asking

In some price ranges as many as 70% are selling above asking price in Florida.  Even the luxury market saw as much as 40% selling over asking price in May.  The numbers are rising.  As you can tell by the graph, there is about a 20% gain in percentage of Florida homes sold above asking price.  Those numbers are progressively growing each month.  This means the market is still gaining momentum.

The numbers are telling buyers that if they want to score a home, they cannot mess around.  This is not the market to negotiate or nickel and dime a seller.  The sellers have the upper hand. Ignoring reality will be a big waste of time.

Top Agents Leave a Blueprint for Buyers

As a top listing agent, we see many offers on our listings.  We give clear instructions on what the seller is looking for and the kinds of things we will be evaluating. When the offers come piling in, it is almost as if the buyer agents did not read any of the instructions. These instructions provide a blueprint for writing a competitive offer. Unfortunately for these buyers, they will probably miss out because their offer is not competitive.

An offer is judged by how well it is written.  A buyer’s ability to close is judged not only by the financial terms, but the language in the contract.  We have talked about how relationships matter in this market.  They absolutely do, and so does the competency of the language in the contract.

If the offer is written sloppily, it is fair to assume that is how the whole transaction is going to go.  If a buyer’s agent does not understand the contract, how are they going to counsel their buyer.  A purchase agreement is like a test.  It is a snapshot.  The offer tells a story.  If the story is sloppy, ambiguous, and does not add up, a top listing agent will sniff that out and the deal will likely go to a better offer.

Best Means Most Likely to Close Near Top End of Value

You have heard of the term Highest and Best.  Highest means highest price, but best to me means most favorable terms and most likely to close.  Best equals confidence.  Am I as the listing agent confident this deal will close?

For instance, it does no good for an FHA buyer to offer above list price with minimal down just to win the bid.  If the buyer cannot cover an appraisal deficiency, they are just trying to score the deal on price alone.  The listing agent should know the price will get kicked back down to appraisal value, which is not always actual value.

Why not take the best offer upfront?  Experience matters!  Experience matters when you hire a listing agent, and it matters when you hire a buyer’s agent.

For a seller, taking the wrong offer can cost you tens of thousands of dollars.  Many sellers sell their home 3-4 times because they take the wrong offer.

For a buyer, writing the wrong offer will cost you a sale.  There are buyers out there that have lost out on 30+ offers, and you must wonder if they wrote a better offer if they might have scored one of those deals.

Strategy Session Important for Buyers

Our team has a buyer consultation with each buyer followed by a strategy session. We educate our buyers on how to score a home, and it is not just on price. We have our ducks in a row.  Our offers make sense, and they often get accepted.

If you want a Top agent to sell your home, call Brett or Sande at 239-310-6500 or visit www.SWFLhomevalues.com to get an instant home value of your home.

If you are looking to buy in this market, call one of our buyer agents at 239-489-4042 or visit www.LeeCountyOnline.com.

Experience matters.  Call the Best, expect the best!

See latest home price data “Southwest Florida Home Sales Prices Rise Whopping 38.7% in May“

Southwest Florida Sales Prices Rise Whopping 38.7% in May

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May 2021 Southwest Florida sales prices rose 38.7% versus May 2020. Average sales prices were up 46% since the same time last year.  Cash sales are up 176.5% since last year which is helping fuel these steep price increases.

Southwest Florida Sales Prices

Financed buyers are having a hard time competing against cash buyers. Cash buyers do not need an appraisal to come in for the sale to complete.  To compete with cash buyers, financed buyers are waiving appraisal contingencies and agreeing to pay any deficiency the lender may require.  Of course, this means the financed buyer must be able to show spare cash.  FHA buyers are having a tough time in this market competing because they often do not have spare cash to meet an appraisal deficiency.

Appraisals

An appraisal is simply an opinion of value based upon what has happened in the past.  We all know today’s home price is greater than yesterday’s, and tomorrow’s will be greater than today.  In a rising market, that is just what happens.  Appraisals do not account for that, so they are almost worthless in some cases.

To find out what your home is worth, go to www.SWFLhomevalues.com and plug in your address.  Within minutes you will have your value, and the best part is it will email you a new price every month so you can track the changes.

Closed sales were up 82.4% over 2020, but keep in mind May closings were severely impacted last year due to Covid.  It is possible more lower priced homes closed last May as we did lose some sales from higher end buyers who were afraid of potential Covid impacts.  The 38.7% median price increase could be skewed by that fact.  Any buyer that completed sales back in May of 2020 will be so glad they did. Last May’s prices were a bargain compared to today’s prices.

Time will tell, but 2021 prices might be a bargain compared to 2022 prices.  We know there is a nationwide shortage of housing supply compared to demand.  We also know Florida is an attractive state.  Even if housing cools in other parts of the country when interest rates eventually rise, demand for Florida should still be high.  Of course, like last May, it was better to buy when others were bailing on offers.  Maybe it is a good time to sell and take some profit when everyone thinks prices will rise.

Should I Hold Out For More Money?

The herd mentality may get it right in the short term.  In the long term they almost always get it wrong.  If your neighbors are holding out to sell for higher prices later, that might be your sign.  From our standpoint, the Florida housing market is good.  Interest rates should stay low into 2022 and perhaps 2023, but nothing is certain.  We will keep our eyes on inflation.  The debate today seems to be, is it real inflation or temporary inflation?

Whatever it is, it is worse than people thought.  Inflation may subside later this year, but for those paying higher prices at the store, it is real.

If you own property and would like to make a move but not sure if the time is right, or how it could work, give Brett or Sande a call. 239-310-6500 We have some programs you might now know about that could help.  We also have data to help make the best decision for you.  Plus, we are fun to talk to.

We always have new listings coming to the market, and they sell quickly.  If you are a buyer and want to get on the Pre-Market list, call one of our buyer specialists at 239-489-4042 or register at www.LeeCountyOnline.com.  We can notify you of new listings coming to the market that matches your criteria.  Getting a leg up on other buyers is Huge in today’s market.

Good luck and Happy Buying and Selling!

Fort Myers Net Migration Ranked Highest in Nation

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According to the latest report from Updater, Fort Myers net migration ranked highest in the country.  Net migration is a measure of the amount of people moving in and out of a metro area.  Fort Myers beat out Savannah GA, Austin TX, Wilmington NC, and Sarasota FL for the top spot in the 1st quarter of 2021.  The Fort Myers/Cape Coral area previously held the #2 spot for 4th quarter of 2020.

Fort Myers Net Migration Ranked Highest

Fort Myers Net Migration Ranked Highest in Nation

The top 5 cities people are moving out of in the 1st quarter were Milwaukee WI, Cleveland OH, New York NY, St Louis MO, and Colorado Springs CO.

Top Cities With Net Migration Out
Source: Updater

Florida is also in the top 5 states for incoming net migration.  The bottom five states were Nebraska, New York, Alaska, Vermont, and South Dakota.  Our blog will have a link to the entire report you can see for yourself.

Advanced Marketing to Reach Out of Town Buyers

The Ellis Team uses artificial intelligence to advertise in markets up North looking for buyers for our sellers.   Reports like this make it easier for agents who do not have access to artificial intelligence to give them a guide on where to spend marketing dollars.  For instance, if you were listing a home in SW Florida with this information you could now seek out targeted buyers from these markets who have an interest in buying in Florida.

When we list a property, we not only market to local buyers but also worldwide.  Simply listing a home on Zillow or Realtor.com does not count.  That is not marketing.  Some sellers mistakenly believe that having their home on national portals will sell their home.  The fact is, every home is on these portals, so what will make your home stand out if everyone else is on them too?

Nothing Special About Online Listings

If someone handed you a vinyl record of Elvis’s top song “All Shook Up” you would probably be happy because you now owned something valuable.  If you later found out that some company produced these as a promotion and made 2 billion copies and everybody had one, you might feel a little let down.  The same is true with online listings.  Sellers believe if their home is listed on Zillow and Realtor.com they have done something valuable.  When they later find out every listing in the MLS goes there automatically, they begin to realize that service is not so special.  They are just like everyone else.

Marketing a home directly where buyers are coming from is taking it up a level.  In the old days, to make our listings stand out we would market homes both locally and in places like the Wall Street Journal and New York Times.  This was a way to reach buyers that were not typically attracted locally.

Today we can find those buyers both in print and digitally online.  Last weekend we ran print ads locally and digital ads in several markets throughout the country. We pulled in several buyers for our $800,000 listing in Cape Coral.  This weekend we will be doing the same thing for some new listings. We have two beautiful listings coming on the market in Horse Creek and Cape Coral.

Top Dollar For Your Home

In this hot market anyone can sell a home.  To get Top Dollar, your marketing must go the extra mile.  Years ago, marketing was important to sell a home at all.  Today, marketing is critically important to getting Top Dollar.

Call Sande or Brett Ellis at 239-310-6500 to find out how we can put this exclusive marketing to work for your home and get you Top Dollar.  Or visit www.SWFLhomevalues.com to find your home’s value today the free, quick, and easy way.

Always Call the Ellis Team at Keller Williams Realty!  You’ll be glad you did.

See last week’s article “June Housing Inventory Levels Update”

New Listing in Cape Coral-Pool Home Hitting the Market

June Housing Inventory Levels Update

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June housing inventory levels remained at 3 weeks of inventory compared to April.  We did see some movements in the markets the past few months.  Let’s look at which price ranges changed since April.

June Housing Inventory Levels Update

We have a little more inventory today in the $300k-$600k price range.  The $300-400k range grew by 42 homes and the $400-600k range grew by 50 homes.  Overall inventory grew by 91 homes. We saw an increase of 38 homes on the market in the $250-300k range.  All price ranges saw increases in inventory except for $250,000 and below which all saw decreases in inventory.  What offset the increase in inventory was steep closed sales in the $300k+ market.

While $300k plus market did very well, the $600k+ market is booming. June housing inventory levels are declining in the $600k+ market while it is increasing in the $250k-600k market.

The 365-day moving average number of homes sold has increased since April which indicates the market is gobbling up any increased inventory. The numbers tell us we have a robust housing market despite rising interest rates.

In April we saw a 160.2% increase in the number of cash sales over 2020.  Closed sales were up 63.3% in April, so this tells us more buyers are paying cash.  In fact, 35.5% of all deals in April were cash.

If closed sales were up 63% in April, why are agents talking about a slowdown?  We may see a slowdown in sales, but it will not be because of lack of demand.  Supply plays a role too.  New builders may turn out less product in the second half of 2020 and it will not be due to lack of buyers.  Many builders have cut off sales to keep their backlog manageable.

We will keep our eyes on the market to see if certain price ranges begin to accumulate inventory.  So far we are not seeing it in any meaningful way, and in fact many ranges are still decreasing.

New Listings We are Working On

Our team has been working on several nice listings we will be bringing to the market soon.  What is different now than in years past is it seems to take sellers longer to make their decision to sell. Many factors go into a decision to sell and sometimes a lot of things need to happen first.  We work with sellers to help with these details.

We have a new program for sellers that allows them to purchase a home first then sell their existing property with no interest or payments for 6 months on their existing home.  With the correct marketing plan sellers receive Top Dollar in this market.  The biggest mistake we see sellers make is believing the market is hot, so they will automatically receive top dollar.  There is a difference between selling for a number you would settle for versus selling for the top end of what the market will pay.  Sometimes that difference can be tens of thousands of dollars or more.

To find out what your home is worth, go to www.SWFLhomevalues.com  This is a starting point.  Often, we are selling homes above appraised value.  You can speak with Brett or Sande Ellis at 239-310-6500 and we can discuss how much we could really sell your home for, where you would go, and help with those details that impact whether it is a good time to sell now or not.  Believe it or not, it is not usually the price that matters to sellers.  Working out the details of how a sale would work is usually the biggest obstacle.  Many people would like to sell if only they had someone to help them with all the details.

This is where the Ellis Team comes in.  We look forward to working with you to manage all those details and get you Top Dollar.

Good luck, and Happy House Hunting!

Getting Buyer’s Offer Accepted in Low Inventory Markets

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Last week we wrote about how common mistakes cost sellers thousands at closing and we got a lot of response.  We also heard from buyers throughout the country asking for help getting buyer’s offer accepted in low inventory markets.  We thought we would write some tips for the buyer side to help them.

Getting Buyer’s Offer Accepted in Low Inventory Markets

In a low inventory market, you must make your offer stand out to the seller.  One of the biggest mistakes buyers make is upping the purchase price without regard to their ability to pay more.  Sure, they may have a pre-approval letter showing they qualify for more, but that does not help if the property does not appraise more when getting a mortgage.

Your Competition is Other Buyers-Not the Seller

Keep in mind, you are not competing with the seller.  The buyer is competing with all the other buyers wishing to purchase the same property.  A cash buyer does not have to worry about an appraisal. A buyer putting 50% down may not either.  Buyers putting a minimal amount down do, unless they can show sufficient cash they are willing to plunk down in addition to their down payment and closing costs to make up the difference.

One buyer called me from another state asking for advice in another market.  They had the chance to buy a home there for $450,000 but did not jump on it right away.  They waited a day, and 13 offers came in.  Ultimately it sold for much more than what they could have sealed the deal for.  Waiting cost that buyer.

They have their eye on another property.  He asked if they should put a quick timeline for acceptance on the offer and threated to withdraw it if it is not accepted.  My response was, not necessarily.  The buyer is not holding all the cards.  It is to the seller’s advantage to slow play the offers to generate more interest.  Taking an offer too soon may cost the seller.

Seller Can Act at Any Time Regardless of What They Stated

The seller may say they will look at all offers on such and such a date.  This may be true, but keep in mind the seller can also accept an offer before that date if they choose to.  If you make such a compelling offer that the seller is worried that offer will disappear, you might be able to get your offer accepted.  Do not threaten it will disappear as that will turn off the seller.  Remember, the seller is not your enemy, but they are the gate keeper.  They have what you want, but the other buyers are your enemy.

Negotiating Tip

I would rather softly tell the listing agent we have a certain amount of time to accept simply because the buyer has been shut out on other properties and does not want to miss out again.  If this deal is not going to happen, we would rather find out sooner than later as there is another property they are considering.  Your home is our first choice, and they would be absolutely thrilled to buy it.  If the seller takes too much time, we must move on so the buyer does not end up homeless.

Keep in mind, the buyer still is not holding many cards.  It is just a softer way to proceed and may help your chances.  Relationships matter in this market more than ever.  If your buyer agent is experienced it helps if they have done transactions with the listing agent in the past.  A listing agent’s confidence in the buyer agent can go a long way to getting a deal together.  Buyers must be educated and soothed, and an experienced agent is better able to help with that, and listing agents know this. Trust between the agents can make all the difference.

Other Resources

We wrote an article back in 2012 that still has some great tips today entitled “Top 10 Tips For Buying a Home in Today’s Market” you can find on our blog at https://blog.topagent.com  Just search for that title in the search bar.

Another great article “Selecting Best Multiple Offer Tips From a Real Estate Pro” can be found here.

We hope these tips help.  Always call the Ellis Team at Keller Williams Realty 239-489-4042 or visit www.LeeCountyOnline.com for the latest listings.

Ellis Team Weekend Open Houses

Open House Saturday and Sunday 12-3 PM

Cape Coral Waterfront Pool Home

2200 SW 49th Ter Cape Coral

 

Common Mistakes Cost Sellers Thousands at Closing

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We have spoken with some sellers in SW Florida who were happy with the price they received for their home, only to find out later their neighbors received tens of thousands more.  Today we would like to talk about which common mistakes cost sellers thousands at closing and how to avoid this.

Common Mistakes Cost Sellers

Lack of Promotion Buyers love it when they see a new listing enter the market.  They want to beat out other buyers to new listings before they get promoted.  Buyers know more promotion promotes more competition, and they do not like that. 

Taking Offer 1st Day Sure, a full price offer could come in the first day, but should you take it?  In today’s market, probably not.  The buyer might not have viewed the home in person and may back out later once they do. You may be shortchanging yourself as subsequent offers may be far better than day 1 offers.  Day 1 offers try to beat the market before the price goes up.

Do not sell to a tenant without testing the market. Many tenants don’t have the best credit and either want seller financing or a deal.  Neither may be in the seller’s best interests.  Put the home on the market and make the tenant bid on the home just like any other buyer.  If they are the strongest offer, then sell it to them.

Strongest Offer May not be Highest Offer- Many low-down payment buyers utilize this strategy. They offer a high amount.  Their pre-approval letter says they can afford it, but what happens when the house does not appraise?  You guessed it, you must lower your price or find another buyer.  Why not find a buyer that can pay the difference between appraised value and sales price?

Appraisal– An appraisal is an opinion of value the appraiser can prove on paper, and it is based upon everything that has happened in the past.  The Ellis Team is selling homes above appraised value, and to do that you must be smart about the financing and which offer to take.  It takes years of experience to sort out which offer is the best on paper.

Using As-is Contract The as-is contract allows the buyer to back out for any reason.  The standard FAR/BAR contract keeps buyers in the deal. Many newer agents do not understand the difference between the contracts.  Do not hire a Realtor that does not know the difference and understand the nuances.

FSBO– You can sell for sale by owner, and you will probably make a sale, but it will be at your own expense.  There is no way an owner can generate as much promotion as we can.  We know the more buyers you have, the greater price and more qualified buyers for you to choose from.  Many people believe if they save a commission, naturally they will have more money in their pocket at closing.  This makes sense, until you later realize we sold the same home for 20% more than you did.  It costs sellers to sell on their own, and you do all the work.

List in MLS and it will sell is a common myth. In this market, it may sell, but not necessarily for top dollar. Getting top dollar is a skill and takes marketing.  Luck is good, but rarely should you count on it, and never should you pay for it.  Hire the best and you should net more money in your pocket at closing.

Is Property Sellable to every buyer? The answer is no. Knowing how old the roof, plumbing, water heater, and certain items are and if they are insurable matters.  An experienced agent can sometimes find a carrier that will accept an older item, but it costs more.  Getting buyer to qualify for a higher cost policy is an expensive lesson to learn after inspection.  An experienced agent will ask questions and find answers upfront.

If you have questions about getting Top Dollar for your home, call Sande or Brett Ellis at 239-310-6500 or visit www.SWFLhomevalues.com for an instant home value.  Keep in mind, the Ellis Team can probably beat that estimate when we expose it to the full market!

Insurance Companies Changing Guidelines and Cancelling Homeowner Policies

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Homeowners beware of insurance companies changing guidelines and cancelling your homeowner policy.  Insurance companies are sending out inspectors to inspect your home and report any deficiencies.  Typically, the insurance company will give you a window to correct the deficiency.  If you do not, they will cancel your policy.

Insurance Companies Changing Guidelines

Insurance companies are looking for ways to reduce claims, and they’re willing to make you pay to improve your property and lessen what they may have to pay out.  Knowing these guidelines ahead of time may save you some anxiety.

There are dozens of insurance carriers in Florida and there are some exceptions to this list, but they are dwindling.  Here are some general rules of thumb for what insurance companies are looking for:

Tile roofs up to 25 years old.  Metal roofs up to 30 years old. Shingle roofs 10-15 years depending on type of shingle. Water heaters up to 15 years.  If you have a roof or water heater approaching these ages, be prepared that your insurance company may require you to replace item or cancel your insurance.

Buying a Home

Your insurance company may require a wind mitigation inspection and a 4-point inspection.  A 4-point inspection looks at the HVAC (heating and air conditioning), electrical wiring and panels, plumbing connection and fixtures, and the roof.  If the home has polybutylene or old copper pipes they may require replumbing the home. The insurance company will probably require a new roof or water heater too if they are beyond these ages.  Sometimes we can get a carrier to add a few years for a higher price, but as we said, those options are dwindling.

Your insurance company will also require a wind mitigation inspection on homes built prior to 2002.  They will be looking at things like how many nails are in your tie downs, what kind of wood underlayment you have and what shape it is in, and opening protections for windows and doors.  For this inspection they can formulate how much your home will cost to insure, or if they will insure it at all.

Insurance companies are cracking down on anything that may cause them to pay out. Obviously, anything wind, water, or electrical related has potential to cause claims.  Insurance companies have decided to make you bring property up to certain standards before they wish to cover your home.  For current customers, these companies are looking to get out of risk, so they are mandating what you must do to continue coverage with them.

The industry suffered severe losses from past hurricanes, and they are in the business to make money, not lose money.  We work with excellent insurance companies who have a multitude of carriers to choose from, so getting your deal together at an affordable cost is always a priority.

Don’t Wait

If you are a homeowner, you want to either make these improvements, or sell before these dates come due.  If you wait until the last minute, you may not like your choices, and it could put you in a financial bind.  Most people believe roofs and water heaters have a certain lifespan. They never dreamed the insurance companies would drop them when their roof is working fine.  It is happening and is reality today.

Check your electrical panel as well.  Many panels are on the do not insure list.  It’s only a matter of time until your carrier cancels your policy if you have a panel that is a fire hazard.

Go around your house and check the age and type of your water heater, roof, plumbing, and electrical panel.  Do not be surprised if you get a phone call from your insurance company requiring an inspection.

If you are thinking of selling or have real estate questions, call Sande or Brett Ellis 239-310-6500 or visit www.SWFLHOMEVALUES.com for a free and instant price estimate of your home.

Save this article or visit blog.topagent.com for an archive of past articles.  Good luck and Happy Selling!