Archive for the 'Real Estate' Category
Tips For Buying And Selling In A Turbulent Market
In today’s turbulent real estate market, many buyers and sellers seem to have become confused about negotiating tactics.
Many buyers assume that every property is overpriced and that low-ball bids are de rigueur. Sellers often recoil at these “insulting” offers, which typically leave no room for negotiation.
The result: a potential deal collapses and both parties lose.
It’s no secret that the real estate market is correcting, but we believe buyers make a serious mistake when they automatically assume that every list price is inflated. Sellers who fail to entertain fair offers miss lucrative opportunities.
The best advice for buyers and sellers is to put their real estate agents to work. Demand comps (comparables) of properties recently sold, and then start negotiating from that point. Selling prices for comparable properties is a far better litmus test for the worth of a home than blind emotions or unfounded assumptions about the state of the market.
Capitalize on your agent’s expertise. Use facts and not emotions to guide your buying and selling decisions.
Today’s real estate market holds significant opportunity for buyers – opportunities not likely to be seen ever again given the desirability of Sarasota and Manatee Counties and population trends. The most successful buyers and sellers will be the ones who make their agents do their homework.
2 commentsHave We Hit Bottom?
There’s no shortage of pundits offering opinions about the current real estate malaise including last Friday’s presentation from Jack McCabe.
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“The U.S. housing crash continues. It’s a terrible time to buy.”
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Home values will stabilize again, but it will be a rocky ride until they do — especially for home sellers. If you are thinking about selling, try to ride it out.”
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“With the value of the U.S. dollar low and real estate prices dropping, it isn’t hard to imagine foreigners taking bigger positions in properties here as part of their overall portfolios. At the first blush of renewed energy, the real estate market will bounce back.”
Only a lucky soul with a crystal ball can confidently predict the near-term future of the residential real estate market. As I don’t have one, I’ll deal with the facts of the local Sarasota and Manatee market.
The Downside
Real estate is driven by supply and demand. As of January 2008, the inventory for Sarasota and Manatee was 14,000 properties – a number that has remained relatively unchanged for the past six months.
But this number is at an all-time high. In 2003, by contrast, inventory was about 5,000 homes.
The downside is painfully obvious: inventory is dramatically up since the heady days of a few years ago.
The Upside
Buyers have not shied away from the housing market. The number of homes sold since 1998 has remained fairly constant – 650 to 850 units per month – with the exception of a few banner months during the real estate boom in 2005.
Here’s another important fact: there are few new projects under development in Sarasota and Manatee Counties. So no new additional pressures will be put on sellers.
Another important criterion in evaluating the real estate market is comparing list and closing prices. This gives true insight into the health of the market and can help buyers determine where they should be making offers that have a possibility to meeting acceptance.
Our research shows that homes going for $1 million+ are selling for 89% of list price but there are dramatic swings and still situations of full price multiple offers and therefore buyers and agents must do their homework before automatically assuming that a property is over priced.
How I See It As long as absorption (purchases) remains fairly consistent, the Sarasota and Manatee markets will slowly rebalance themselves. And I believe absorption will remain constant because this is a desirable part of the country.
With a beautiful climate, world-class culture and arts, excellent schools, and a modern infrastructure, Sarasota and Manatee Counties will weather the downturn better than many other parts of the nation and buyers should take notice of the unprecedented number of choices and motivated and realistic home owners and developers.
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Why a real estate auction?
As the real estate market continues to correct and homes languish on the market longer more sellers are turning to auctions to sell their home. The use of property auctions to facilitate the sale of a home continues to grow in popularity. From 2003 to 2006 residential real estate auctions grew nearly 40%.
SKY Sotheby’s International Realty and Daniel Decaro Real Estate Auctions will be conducting a multi-property luxury auction today at The Longboat Key Club. We have gathered a magnificent assortment of luxury homes and condominiums ranging from a $20 million dollar beach front estate on Casey Key to a charming home in Towles Court. Our Fall 2007 auction will be an exciting opportunity for both buyers and sellers.
Seller benefits:
- Massive Promotion - our auction will place an exclusive collection of luxury properties on a pedestal. The broad advertising campaign conducted allows our gathering of homes to outshine the other 14,000 properties for sale in Sarasota and Manatee counties.
- No drawn out negotiations
- No financing contingencies
- As–Is condition
- 30 day closing
- Finally, the auction can create something lacking in today’s real estate market – the possibility of competition and a sense of urgency.
Buyer benefits:
- Opportunity to buy at or below market value
- No drawn out negotiations
- Motivated sellers
Buyers and sellers benefit from an auction as well as the overall real estate market. Creating a sale that otherwise would not have occurred helps speed up market recovery by reducing inventories and establishing values where it was previously difficult to do so because of a lack of transactions. After a successful sale potential and existing sellers in the immediate area now have a sold property to substantiate their asking price.
The determination of value is a common snag in today’s marketplace. There are buyers who want to buy and sellers who want to sell but they can’t meet on common ground because deriving value is difficult. Auctions help overcome these snags by creating transactions that help establish value.
SKY Sotheby’s International Realty remains committed to providing a superior customer experience by creating innovative strategies to overcome today’s market obstacles.
1 commentCleaning Up the Mess
The attached article was forwarded to me from Mike Good, the President of Sotheby’s International Realty. I think it says everything that needs to be said about the current state of affairs in residential real estate. Frankly, I am pleased to see others in the industry see things the way we do. The forest fire that is burning will go a long way toward clearing out real estate professionals who thought selling houses was a get rich quick scheme. I am proud that say that our team of 48 sales associates and teams remain committed to the profession and are in it for the long haul.
Enjoy the article below. Comments are welcome!
Best regards, Chad Time to pick up after housing mess courtesy of Marc Davison www.1000wattconsulting.comThe Davison File
By Marc Davison
| Marc Davison |
A few months ago, I wrote a column listing the things I would do if I ran a fictitious real estate brokerage company called Davison Real Estate. (See “Real estate in a pickle: Here’s a solution.”)
Over the past several weeks, I have talked with dozens of brokers reeling from the credit market crisis. It has again prompted me to ask myself, “What would I do?”
It goes something like this:
From the Desk of Marc Davison
CEO, Davison Real Estate
Dear Agents and Staff:
Good morning. I trust you all had a wonderful summer. Welcome back.
As you know, we are in the midst of a storm raining down on many Americans. Foreclosures are skyrocketing. Many parents are right now explaining to their children why they are packing up what’s left of their belongings and moving … somewhere.
Most of you, of course, are painfully aware of this. You may have former clients in this situation.
Despite assurances that the credit market will somehow be stabilized, deals will continue to fall out of escrow. Well-qualified buyers will struggle to get through underwriting. You will be tempted to indulge the false hopes of sellers when pricing homes. You will make far less money.
So starting today, we — you and me, together — will begin to rehabilitate a company body that has over the last 10 years become fat, lazy and spoiled. If you join me, in time we will emerge healthier and more prosperous. If you recoil, dig in and cling to the past, then I ask you now to take your real estate license elsewhere. There may be a place for you in this industry, but it is not at Davison Real Estate.
To begin, let me reintroduce you to who we are as a company. That name that appears on our storefront, on your business cards and on your yard signs is a name that has meaning and history. The people that built this firm did so on a handshake, on their word, and on deeds performed within the community. All were bankable. Beginning now, I expect you to carry that history faithfully forward.
We will have to work hard to regain the confidence and trust of the public. From now on, every human being we touch will no longer wonder if we have their back. They will know it.
Starting today, we will begin an audit of every program, practice, application, vendor relationship and product we have. What doesn’t fully honor and respect our customers will be discarded. No more drip e-mail tools; no more script-peddling luncheon speakers; no more dual agency legerdemain.
We are also going to look at who among you has not attended our training courses and who instead consciously decided to ignore the many support services and tools we have made available. Too many in our company have chosen to remain uninformed and underskilled. That is no longer acceptable.
Attached to this letter you will find a list of approved lenders, title reps, home warranty folk and vendors. These are the most reputable partners in our community. If your cousin Bob is not on this list, he is no longer permitted to touch one of our customers. If you transgress this policy, you will be handed back your license.
After you read this letter, please make an appointment to meet with the highly trained professionals within our marketing department. Beginning now, everything that communicates our mutual message to the world will go through them. Your signature file. Your business cards. Your personal Web sites. Your fliers. Everything.
The story you tell the world reflects on your peers within this company and throughout the entire industry. As professional men and women who handle the most important financial transaction in our customers’ lives, we will present ourselves accordingly.
If you are ever approached by someone from HGTV, TLC, Lifetime, “60 Minutes”, “Dateline” or any other news organization, be advised that as long as you represent this firm, you will refrain from engaging them. Be mindful of the fact that everything you say and do is a reflection of this company and every individual who works here. If this does not meet your approval, start your own brand.
In 30 days we will be removing from our office all copy machines, filing cabinets, fax machines, folders, transaction binders and other 20th century tools that drain our company of resources and subject our customers to unnecessary hassles. Get a Tablet PC, e-fax account and PDA, and start using the transaction management system that we invested in four years ago. Hairstylists know to show up to work with precision tools. So should you.
Starting now, all homes we list will be marketed online with no fewer than 20 pictures, a video or virtual tour, and articulate, honest copy. If you do not know how to make this happen, get briefed today on what has been possible now for years. There will be a test tomorrow.
Finally, as a member of this firm, remind yourself daily of your commitment to be the best. If you’re not the best, then you are nothing. Look around you. This building, our executive team, our technology, our history — it’s a foundation we expect you to add to, not take from. Honor it and you have my word that it will honor you.
Sincerely,
Marc Davison
CEO, Davison Real Estate
19 comments
Summer Update
Despite all of the gloom and doom in the media and among some of our fellow Realtors, we are having a great year and I am seeing the marketplace stabilize. In Sarasota County, single family and condo inventory in the luxury bracket - defined as 1 million and up - has stabilized at 1,279 units with a steady absorption rate of approximately 50 units per month. In Manatee County, there are 404 units, down from a peak of 484 in February with an absorption rate of 10 per month.
While it will take time to work through the inventory and return to balance, the writing is on the wall that now is a great time to step in and take advantage of the options available. There is tremendous opportunity for savvy buyers looking for the right opportunity, not to mention tremendous investment potential for investors with a strong cash position and the belief that real estate in Florida is a great investment over the long haul.
PS. There is still not a condo glut! How is this true? Consider this fact: even though the media reports on the many planned projects only a select number of new projects will come out of the ground in the next 18 months. This may be a great time to get a good buy and have plenty of upside.
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