Over the past couple of years, we’ve experienced multiple offer situations on lots of properties that were offered for sale. This happened for a number of reasons with one of the most important reasons being SUPPLY AND DEMAND.
For those who are shopping for their dream home, it can be devastating to miss out on that home even after offering full asking price. During hot markets, the asking price often becomes the STARTING price, and the homes can sell for more than the seller was originally anticipating. Our local market is starting to cool. There are still multiple offer situations, but they are becoming less common.
A multiple offer situation is fine if you are selling your home, but it can be tough if you are a buyer. Positioning yourself correctly for any house purchase is key, and it can keep you from experiencing months and months of frustration.
One of the most important things for you to do is ensure that you are a RWA Buyer. That means Ready, Willing and Able. You should have a preapproval letter from a reputable lender (not something printed online) and be working with an agent that understands different types of home sales, offer preparation and the various disclosures or addendums that may be required.
Another factor that can make a difference is raising your escrow deposit or good faith money. By showing a larger monetary deposit as opposed to competing offers, this can make the home sellers look at YOUR purchase offer in a better light against the competing offers.
An empathetic letter that compliments the home and talks a little bit about your situation and your sincerity can make a big difference too. Fortunately, even in this digital age, the real estate business is still a “people to people” transaction, so the more the seller knows about you, the more likely they may be to choose you as the purchaser.
Knowing the statistics of our market here in Ponte Vedra Beach (32082) is also critical in negotiating the best deal. Did you know the median sales price is hovering at $600,000 for a single-family home, and the last list price to sale price ratio is between 95 percent to 96 percent (source: Realtyweb Northeast Florida MLS)? In other words, sellers can expect to see offers coming in between 4 to 5 percent off of asking price.
Again according to the Realtyweb Northeast Florida MLS, the average days on market in 32082 have risen from January 2018 at 100 days to August 2018 at 107 days. That is a far cry from what is happening in the western states where existing housing is averaging seven to 10 days on market. In our Ponte Vedra Beach luxury market, there are at least 100 homes over $1 million for sale, which is good news for the move-up buyer who is looking for choices! But this number of luxury homes also requires patience on the part of sellers to find the qualified buyer for the luxury property.
As homeowners begin to think about selling, questions regarding pricing strategy sometimes come into play. Several concepts are trending right now from pricing well above market value to take advantage of the lack of inventory to the opposite end of the spectrum, listing below market value to create a multiple offer situation. While some of the pricing strategies can possibly work, they also come with risks. You face appraisal issues when trying to sell too far above market value, and you risk stigmatizing your home at a lower value if that multiple offer situation doesn’t come to fruition.
Additionally, there are two sides to this coin. When you are on the seller side of the equation, you really want to look at all offers with terms and conditions, rather than just the top line offer price. Sometimes the HIGHEST offer is not the BEST offer.
This is important to remember when you are on the BUY side because you may have the BEST offer without offering the HIGHEST price.
Kathleen Floryan is a broker associate with Ponte Vedra Club Realty.
