If you keep an eye on the real estate market, I’m sure you’re well-aware of the housing inventory shortage. Currently, there is far more demand for homes than there are available listings. This is happening across the entire U.S., but we’re especially feeling it here in Southwest Florida, as more and more out-of-state buyers move down permanently.
On average, Southwest Florida maintains about 7-9 months worth of housing inventory, depending on the time of year. “Months of inventory” refers to how long it would take to sell all current listings, at the current rate of sale, if no new listings were to come on the market. This is the simplest way to measure our inventory levels.
Right now, however, we have just 4 months of inventory and it’s slimming daily. For example, at our brokerage, MVP Realty, we generally carry about 500-700 active listings. As I’m typing this, we only have 164 listings and they’re selling faster than new ones can pop up.
Whether you’re buying or selling, it’s more important than ever to have a knowledgeable Realtor to help navigate this fast-paced market. Here are our top tips:
For Buyers:
1.) Have Pre-Approval or Proof of Funds Ready- If you’re ready to start actively looking at properties, keep in mind there will be no extra time to get your documents ready AFTER you find the perfect place. Anything priced correctly in this market will sell in under 24 hours, so you need to be ready to pull the trigger. In addition, your Realtor needs to be sending you properties the minute they hit the market. There’s no time to lose!
2.) Optimize Your Offers- Gone are the days of 15-20 day inspection periods, small deposits and long closings. A 7-10 day inspection period is plenty of time, and will make your offer stand out amongst potentially several others.
If your loan requires, for example, 3.5% down, don’t do a $1,000 deposit. Bump it up as much as possible and you’ll look more serious than other buyers. Either way, you’ll end up paying it at closing, and your inspection period will protect your deposit in the meantime.
If your lender is requesting a 45 day closing, FIND A NEW ONE. Serious lenders can get it done in 25-30 days, and that will look much better on your offer.
3.) Chin Up, Buttercup- In this market, even if you take all of these tips into account, you may still get beat out the first time or two. Don’t let it get you down! There will always be new listings, so patience is key.
For Sellers:
1.) Price It Right- Although the market is hot and things are selling fast, overpriced listings will still sit on the market and eventually become stale. You’re better off pricing it to sell. This way, you’ll have multiple offers and chances are, it will sell over asking price.
New listings get the most amount of online views, compared to listings that have had recent price decreases. So, even if you price it high at first and plan to drop the price later on, you’ve already alienated half of your buyer pool and it will have much less action, even after the price decrease.
2.) Have a Plan- Right now, we’re seeing a huge problem with sellers who accept an offer, only to default on the contract when they realize they cannot find a home for themselves, once theirs closes. This is a recipe for a lawsuit. Have a plan in place for this situation. Consider renting if you cannot find the perfect home right away, and refer to our Buyer Tips above BEFORE putting your home on the market. Or just give us a call!
3.) Hire a Knowledgeable Realtor- Does your agent know how to handle multiple offers? Have they ever been in that situation? Ask them! Not only is it more difficult to handle multiple offers, but we’re also seeing a lot of buyer’s agents putting very questionable terms in their offers, in hopes that their “hail Mary” contract gets accepted. It’s more important than ever to hire a listing agent who is familiar with every contract, and has been in multiple offer situations before. This will keep the transaction smooth and lawsuit-free!
