Solutions to Palm Beach County Real Estate Challenges
We've started the year pretty hot in the real estate market in many aspects. But that also has created a bunch of challenges and all kinds of dynamics that are a little bit different right now, and to add the pandemic that we are facing right now. Anytime there's an opportunity on one side of the market, there are massive challenges on the other side of the market and that's what we're seeing right now.
Buyers in certain areas, in certain price points, are really struggling. They are struggling because they don't have a strategy and an experienced agent to help them be in touch with what's going on in the market and how to deal with it. Having a strategy means more money in your pocket regardless if you are buying or selling a property. Also, in real estate, little mistakes are always a big deal because if it is in terms of the overall value of a property buying or selling, you figure 1% on greater than $300,000 on average, you're talking about a few thousand dollars, to begin with, and that's a minor mistake.
Many people that are looking to buy a home don't really understand the formula and a lot of the agents don't understand the formula to get results. Having a lender and a good agent matters. Currently, we are seeing four, five, six great offers on a property. If they were the only offer, the seller would take all of them. But many of the agents are doing minor little mistakes that are causing their client to be the second, third, or fourth choice. But this can be avoided.
The Lender Matters - The lender matters more today than ever. Being able to have a very short mortgage commitment period, allows us to compete, and it is so important.
The reputation of both Lender and Agent - It goes into the formula and then little things like having an agent who is calling and finding out what's important to the seller before they write the offer. Some agents that send an offer over never call the listing agent to say, "Hey, by the way, I sent over an offer." or "Here's how great my buyers are." and sometimes their email goes to spam. So the buyer's offer may never have gotten from the agent to the listing agent. This shows the overall level of effort they're putting into a transaction.
When people make mistakes with agents, what's the number one reason?
Before the pandemic, the average real estate agent only will sell three to four homes in a given year. Most agents are not very successful and that's why it's so important that you choose it right. Many buyer/sellers think that every real estate agent are the same. They don't realize that there are 21,000 real estate agents out there in Palm Beach County. However, only about 1200 of those sell 10 homes or more a year. They may be nice, great, or a wonderful friend and yet they just don't have the experience to know how to deal with the challenges.
"Sold my house a couple of months ago. It was such a mistake. I could've gotten so much more now. In fact, there was even somebody who asked if it was still for sale " This is a common statement from a seller that doesn't know the future in terms of where this market is going. Sellers should always be looking for the best overall opportunity.
Strategy does matter - We are seeing properties go under contract within sometimes minutes of hitting the multiple listings which means that they did not maximize their equity. Not just about getting it sold but getting some equity maximized. For example, sellers received an offer, the seller took it, and it's off the market. Compared to having a 10 step strategy to get multiple offers, to drive that price, and here's the kicker, terms up. Many of Treu Group Real Estate sellers have been able to stay in their home for two to eight weeks free after closing, allowing them a chance to transition more smoothly. And especially if they're in a competitive area where they're moving to allow them a little bit more time to find the right fit on their purchase.
In this market, in many areas, it's not just, can an agent sell a property? Honestly, some sellers could just sell their property. The question is, are you putting the most money in your pocket? Even in this market, we are seeing a tremendous amount of financing issues and challenges. So having somebody who understands which deal to take in multiple offers is critical. And back to the short sale days, we learned a lot about being intuitive about the deal from those times and we've just applied them to this market, which is totally different. But the selection of the right offer is often the decision between closed or back on the market.
I can sell my home right now, but where am I going to go?
This is a challenge in many cases, depending on what people are selling and where people are moving to. Not all properties in Palm Beach County are in that seller's market hot property. So understanding how to get from where you are to where you want to go and the challenges and strategies to overcome those. The reality is there is a way to overcome it and you have to be realistic about making a couple of different offers and just having the timeframe workout so we can reverse engineer a lot of it.
But that doesn't mean that you can just ask for any old price you want. The market, especially right now, people are getting mortgages. So appraisal really matters. We have to be able to have some sort of justification for the reason that we got to the price that we did, even with appreciation.
How many deals are falling apart because of appraisal issues?
Treu Group Real Estate firmly believes that not everybody should be buying nor selling. But the people that should definitely be selling are investors who just say, "I have made my appreciation. I am tired of being a landlord." Now is the time to look at, is it time to take your money out of those investments? A lot of investors are looking at the gain versus the maybe rental ROI and making those decisions that now might be the time to go ahead and take their money out of the real estate investment that they have.
We just put two more properties under contract to go for sale for an investor that said, "We have held it. Now it's time to take, hopefully, the equity return out." We just sold the fifth property for one of our investors. So when you have multiple properties, it's time to analyze it and then make the decision whether now's the time or if you continue to hold it long term. It depends really on your financial strategies on what makes sense, but let's talk about it. Let's at least take a look at it and let's see if actually now's the time to sell those properties.
Treu Group Real Estate has been in every market since 1989. We've seen the highs of a seller's market and the lows of a buyer's market and everything in between. So we know how to get our clients the results and also to anticipate what's coming in the market so we can adapt earlier than maybe reacting to what's going on.