By now, everyone is well aware of the surge in home buying demand over the past 18 months or so. With skyrocketing prices, tight inventory, and bidding wars throughout many markets, it is easy for sellers to become complacent or even arrogant when deciding to list their homes for sale right now. After all, most people know somebody that has recently sold a home within days, if not hours, for above asking price.
There is no doubt that the current seller’s market is the craziest it has been in years. With this said, there are many factors that play into some of these super-competitive bidding wars for homes that result in prices greatly exceeding list prices. In addition, it is important to keep in mind that many of these stories are circulating because they are the anomalies. Lastly, the current market seems to be showing some signs of softening with fewer buyers in some markets. Below we discuss a few myths that you may have heard when it comes to selling a home in this market.
- #1. You do not need to renovate your home. Buyers are paying top dollar for any home. Although it is understandable for sellers to feel that any home will sell in this market, the proper approach should involve how to obtain top dollar for the home. Regardless of whether it is a seller’s or buyer’s market, most prospective home buyers expect homes to be mostly move-in ready. Furthermore, most buyers do not have the vision required to be able to see through a complete home renovation. Lastly, the majority of home buyers do not want to deal with remodeling a home as soon as they purchase it.
- #2. Price the home extremely high & you will probably get it. According to recent housing data, the average home price across the nation increased by 23% year-over-year in June 2021. Skyrocketing home prices along with a persistent tight inventory may lead many sellers into the trap of overpricing their homes. Overpricing a home will likely result in significantly less showings or even no showings. Over time, the house will sit on the market and become stale. At this point, many prospective buyers and agents will begin to wonder if something is wrong with the property and may forego seeing it, even if the price has dropped. It is important to price the home realistically based on the current market dynamics.
- #3. Homes do not need much marketing in this housing market. They will sell regardless. It is important to remember that over 90% of all home searches begin online. In South Florida particularly, many of these home searches are being conducted by buyers that are either out of the state or even out of the country. Professional photos, floor plans, 3D tours, and videos are essential when properly marketing a property for sale. Just remember, the more buyers that see your property professionally marketed, the greater the chance of it selling for top dollar.
- #4. In a bidding war, simply take the highest offer. As mentioned above, bidding wars have become quite common in this market. With this said, it is important that you have a trusted and knowledgeable real estate agent that can assist you in this process. A simple way to think about bidding wars is that they are a balance of terms vs. price. Accepting the highest offer may be tempting, but it may not always be the wisest choice. For example, a slightly lower offer that is all cash and does not include a financing contingency may be a better option than an offer that is slightly higher but contingent on financing and the property appraising for a certain value. It is important to analyze all aspects of an offer as opposed to simply the purchase price.
The goal in any housing market should be to sell your property for top dollar and in the time frame that works best for you. Although it has certainly been a seller’s market, it is important that sellers and their real estate agents remain equally disciplined in their marketing approach. In a seller’s market, this will likely be the difference in obtaining the highest price possible with the best terms and not. In a buyer’s market, this will likely be the difference in the home selling in a reasonable time at the market rate and becoming stale on the market with no showings at all. We can not overemphasize the importance of having a local and knowledgeable real estate agent representing you. Furthermore, the importance of market data analytics can not be overstated when pricing a home as well.
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!