Typically, homeowners decide to list their homes for sale for personal reasons. Oftentimes, they are either relocating for a new job, their family is growing in size, or their kids have gone off to college and they are looking to downsize. With this said, a recent survey conducted by Realtor.com found that 24% of homeowners who plan to list their homes for sale in the next 12 months are doing so because of profit potential. Furthermore, 53% of these future sellers are expecting to get their full asking price while 24% are anticipating above asking prices. As for listing their homes now while the market is red hot, 13% are considering doing so.
“Make me move price”
With the surging buyer demand and extremely limited inventory of homes for sale, many homeowners are considering listing their homes with what we term as a “make me move price”. Needless to say, these are aggressively high home prices that sellers feel would be a financial disservice not to accept from a buyer. Thus, approximately 29% of respondents in this situation feel that their homes are not worth the asking price.
A common strategy being adopted with the “make me move price” approach is limiting the terms considered for any offers. In other words, these properties are listed at aggressively high prices and only will consider cash offers. In doing this, the seller removes any potential financing contingencies and oftentimes appraisal contingencies. Essentially, these sellers realize that their homes would not appraise at the listing price and therefore they would rather limit their pool of prospective buyers to only those paying with cash. While this may sound crazy to some, it is actually an effective method. With many Americans relocating to South Florida from higher-priced markets, there is no shortage of cash buyers. In addition, it has become increasingly difficult for home appraisals to keep up with the skyrocketing home prices.
Nationally, homes are selling 41% faster than last year. Overall in the U.S., the average time on the market for a home is 43 days. Approximately a quarter of sellers expect to have an offer on their homes within a week, while 16% of sellers expect to receive an all-cash offer.
In South Florida, the frenzy is even higher than the national averages due to the amount Americans relocating to the state. Although this can be a concerning time for buyers entering the market, most economists are predicting this price growth to continue albeit at a much slower pace moving forward. In the end, the increase number of companies and Americans moving to The Sunshine State should keep the housing momentum fairly strong.
Are you thinking about buying or selling your property in South Florida? Contact Live South Florida Realty, Inc. today!