So you’ve read all the articles about how hot the real estate market is and how many properties are selling above their listing prices. Therefore, you have decided to take advantage of this opportunity to list your home for sale. For starters, you will want to make sure that you have hired a local and knowledgeable real estate agent for your market. (If you are in the South Florida market, we would hope it would be a Live South Florida Realty, Inc. agent.) Although many properties listed for sale are ending up selling in bidding wars, it may not be as straightforward as it seems. We discuss some things to be mindful of below.
Items to consider
- Collaborate with your real estate agent to conduct a comparative market analysis (CMA): What are comparable homes in the area selling for? How long are they staying on the market? Are homes selling above asking price? These are all questions to consider when evaluating your market.
- Set an appropriate list price: This is arguably the most critical step when listing a home for sale. If you price the property too high you may not get any showing activity at all or even invite low ball offers. Price the property too low and it may sell quickly, leaving you and your real estate agent wondering if you left money on the table. In fact, multiple offers tend to occur when the list price is slightly below the average price for a comparable home in the area.
- Pay attention to every detail in preparing the home for showings: Even in a hot seller’s market, it is critical that the home is clean and de-cluttered, allowing the prospective buyers to envision themselves living in the home. Removing personal items such as family photos from the home can help prospective buyers better envision the home as their own.
- Choose the ideal time for the listing to hit the market: Selecting the optimal time to list a home for sale can greatly increase your chance of receiving multiple offers. As for days of the week, Thursday is generally thought to be the best day of the week to list a home for sale. The reason for this is that this is the day when most buyer’s real estate agents will schedule showings for the weekend.
- Analyze multiple offers wisely: In real estate, the highest bid is not always the best contract offer. The quality of the buyer must be analyzed based on various factors. Buyers need to have their money in order, a pre-approval letter (if applicable), and a healthy down payment in order to make the mortgage processing smoother. In the end, you will want to consider which offer provides the highest probability of closing while minimizing any risk.
- Beware of the appraisal: With home prices soaring so quickly, it is extremely difficult for the appraised values to keep up with the market. In fact, oftentimes buyer’s agents will submit offers above asking price with an appraisal contingency. This is strategically done by the buyer because it may likely not appraise for the full contract amount. In the event that the appraisal comes back below the contract sales price, there are two options: 1. The buyer comes up with money out-of-pocket to make up the deficiency. 2. The seller lowers the price to the appraised value.
- Look out for contingencies: In a bidding war, you should see less contingencies being placed on offers in order to be more competitive. Once again, sellers should factor in items such as bid price, strength of the buyer, and whether there are any contingencies. Some examples to look out for are: appraisal contingencies, financing contingencies, or even offers contingent on the buyer selling his/her home first.
Overall, this is quite an exciting time to be selling a home. With continued tight inventory, an insatiable demand for housing, and more people moving to South Florida, it is a great time to maximize your profits. To make it even more appealing, the South Florida market continues to see a higher percentage of all cash home sales. Of course, this is wonderful news for home sellers because it typically minimizes much of the risk with the offer. Furthermore, home prices have risen so rapidly in the recent 18 months that home appraisals are having difficulty keeping pace. Therefore, sellers should always consider the likelihood of whether or not a home will appraise at an above asking price. Needless to say, in a bidding war the highest bid is not always the best. The importance of a local and knowledgeable real estate agent can not be overstated here.
Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. At Live South Florida Realty, Inc., we have been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!