If you were wondering whether it's a good time to sell or if it's still a good time to buy here, then this month's newsletter is going to help you with that.
Statistics and Graphs
February is a shorter month and is usually the 2nd lowest sale month of the year, just behind January. Even so, this February was very strong again with nearly 20% higher sales than last February and a higher sales number than every January back through 2007. This is now the 14th month in a row with sale higher than the same month in the previous year AND higher than the same month going back 6 years. (Click on either chart below to see them full size.)
As a result, Inventory is back down below the 5 months supply mark (as of this date).
Information for charts above was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 & from the MFRMLS for May 2011 thru Feb 2013. This information may or may not include all listed expired, withdrawn, pending or sold properties of one or more members of the My Florida Regional Multiple Listing Service.
What was interesting in February is that even though we had the highest number of new listings in a single month in almost 2 years, the number of properties for sale by the end of the month was less than it was in January.
Of the 2038 new listings for residential properties in Pinellas County in February, 42 have already sold and 566 are under contract. So almost 30% of the properties listed last month are no longer available and it's only 2 days into the new month.
But even that doesn't give you a complete understanding of what's going on so now I'll tell you the rest of the story.
Two Buyer Client Experiences
The first buyer has been looking for a house in the Palm Harbor area and a few weeks ago a new listing came to my attention on a Thursday afternoon (it had been just listed earlier that same day). I sent the listing to my client and he liked what he saw but asked me to call the listing agent to find out how old the roof was and get back to him. I called the agent and found out the age of the roof but she told me that they were expecting an offer in that evening. I let my client know and he said he'd show it to his wife that evening and let me know in the morning if he wanted to put in an offer.
I told him I had a feeling it would go quickly. The next morning I checked at about 8:30 am and it was under contract.
The second buyer was looking for a house in Safety Harbor and there wasn't really much at all available in her price range that fit what she wanted. A few days ago I saw something come on the market at about 8:30 pm and called to see if we could get in to see the house that evening. The lockbox wasn't on the house yet so I arranged a time the next morning to see it right after the lockbox would be put on the house and arranged to have the seller available to come over to sign a contract if my client liked it. I got the paperwork ready for a possible contract and had the proof of funds for my client (cash purchase).
We arrived at 10 am and the house was exactly what my client had wanted to find. I called to get the seller to come over and during the 30 minutes while we waited another agent came with a buyer. I told them that we were just waiting for the seller to arrive to finalize a contract and the other agent asked "has he already accepted your offer?". Right then the seller arrived and that other agent went right up to him and asked him the same question and then insisted on seeing the house.
I went in with the buyer and waited while the other agent showed the house and as soon as they left we started on the paperwork. When asked about the price he said that a friend told him that he should try to get a bidding war going but he didn't want to do that and would accept a full price cash offer from my client. He also said he had 7 calls already that morning about showing the house but that I was the only one that had called him the night before.
As we were completing the paperwork another agent came in with a buyer and told the seller that her client was ready to make an offer but the seller told her that we already had an agreement and that hers would have to be a backup. She left in a huff.
We got the contract finalized and my client gave me the deposit check which I deposited at the title company that afternoon. She was thrilled about the house and that we were able to get the contract on it despite the fact that there were people practically lining up to buy it.
These are both very recent experiences of 2 of my clients and I wanted to share these with you so that you have a better understanding of how you have to be prepared in this current market if you want to get a condo or house that you like.
Also, if you are ready to buy you should let me know so that I can set up a special MLS search that will let us know instantly when a new listing is entered into the MLS. This was the only way I found the houses for these 2 clients as quickly as I did.
Two Seller Client Experiences
The first client is in a short sale situation and we got their house under contract within 2 weeks of it being listed but the buyer's offer was $15,000 below the list price. The loan that is being short-saled is a VA backed loan and the way a short sale works on this type of loan is that the VA has an appraisal done and then they will require that they net 88.13% of the appraised value - and there is no negotiating this. When the appraised value came back the buyer had to come up $20,000 on the purchase price and they agreed to this. However, after the inspections found that the air conditioner was 19 years old he canceled the deal.
I relisted the house and within 3 days we had it under contract with a new buyer at the higher price and with the buyer knowing upfront about not only the air conditioner but also any other issues that came up in the first buyer's inspection. We're now waiting for the bank's approval of this new contract and should have it any day.
The reason I'm writing about this one is to give you some insight into how government backed loans often have less negotiating room than standard bank loans when it comes to short sales and that even with these issues it did not take long to get another qualified buyer.
The second client had his house under contract twice since last fall and both times the deal fell apart. He had been trying to save money on the Realtor commission so he had been working with Realtors that did cut-rate commission deals. After the 2 failures he asked me to help him and we will be listing the house in about 2 weeks. I already went over 1 mistake related to how the house was priced previously which made perfect sense to him and which we will be correcting this time around.
I'll let you know how this turns out in next month's newsletter but I'm predicting that we will have the house under contract within no more than 10 days.
Even in a market like our current one you need to have a good Realtor involved who knows if a contract from a buyer is one to take or not and also when to try to salvage a deal and when it is in your best interest to end a deal and get another buyer that is more likely to close. To be successful in selling your home or condo you have to price it correctly for your area, have it prepared to show before listing it and select a buyer that will be likely to close.
Tips for Buyers and Sellers
Both buyers and sellers need to be aware of the current market conditions in the overall area and in their specific area. Some cities or neighborhoods may be in a very strong sellers market and require special techniques to get you a home there (like I described about the experience of my Safety Harbor home buyer). But then some neighborhoods or complexes may have a lot of properties for sale and require the right strategy to successfully sell.
It's important to be given accurate and current information on the specific area, neighborhood, city or complex you are trying to buy or sell in to make sure that you are implementing the right plan.
Buyers absolutely need to have their finances for purchasing lined up and either a preapproval or proof of funds statement/letter at hand. Without this you will have a much greater chance at missing out when you find the right home or condo.
Buyers also need to be aware that sellers are not as willing to come down as much on price - except when they have been having difficulty selling their property and/or it has been on the market for an extended period of time. Even then you have to be prepared to act quickly because I have seen properties like that suddenly have more than one buyer express interest, and when that happens you will likely pay more than if you had gotten your offer in and accepted before another interested buyer came along.
Well-priced homes or condos in areas or complexes where there is a strong demand and little inventory - if you want it you should be prepared to pay close to or at the list price as long as it is reasonably priced.
Sellers need to have their properties in 'showing condition'. This doesn't mean expensive upgrades but it does mean that the exterior and interior are clean and neat and issues that are distracting (stains on carpets) or may concern buyers (stains on ceilings from roof leaks, rotten wood on the exterior, etc.) are taken care of.
Goals need to be clearly defined for price and the timing of the sale and need to be reviewed against the current market conditions with your Realtor.
From my experience I've found that at least 50% of the success of sales comes from the preparation done prior to the listing going into the MLS and 40-50% comes from selecting the right buyer and handling things properly after you get a contract.
For an owner who is in mortgage trouble or is in a possible short sale situation, the key is having someone who is adequately trained to handle this type of sale properly. I see way too many short sale listings being handled by an agent who does not have adequate training and which then unfortunately end up being foreclosed on. If you or someone you know is in a situation like this, make sure to call me to find out what can and can't be done in your specific situation.