Incredibly, we're already half way through the first month of the New Year, but as it's our first newsletter of the year can we take this opportunity to wish you and your family a happy, healthy and successful 2017.
In the world of real estate it certainly does indeed look like it's going to be happy, healthy and successful in the coming months.
Inevitably, the election last November has altered the landscape. The subsequent and still ongoing rally in stocks has caused mortgage rates to rise. However this should be seen as a long overdue correction from the totally unsustainable ultra-low rates of recent times. It's also a result of much greater confidence in the direction of the economy.
Measured on any historic scale, mortgage rates are still very low and continue to create great opportunities.
It's also pleasing to see growing inventory of available homes for sale in some segments of the market. More choice is a vital component in the buyer purchasing equation and is far preferable to a situation where poor supply levels can delay that all important buying decision.
Various geopolitical situations abroad mean that money is still coming in from around the globe. The nature of our area means that South Florida real estate always does well out of this sort of very welcome cash injection.
It's also a very rosy outlook for those of you involved in or considering investment property for income. With a an always lively rental sector, we're commonly seeing 6-8% annual returns, while banks continue to give out very little in terms of interest.
The very welcome return of first time buyers last year shows no signs of letting up in 2017. The National Association of REALTORS® recently commented that we're going to see even more millennials buying a place of their own this year, and not just at entry level!
Corelogic predicts that homeowners' net worth will rise by 5.2% in 2017, building on rising home equity levels in recent years to encourage more fluidity in the market, as more people look to move to a more upscale residence.
It's just a great time to be buying or selling. Why not contact us today for an informal discussion of how to best achieve your real estate goals this year.
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I want to thank all of our past clients who have used our service this year (sometimes for the second or third time) or referred us to their friends or family, the highest compliment we can receive.
My thanks too to our great vendors that we have the good fortune to work with, who service our clients needs to make their customer experience as smooth and efficient as possible, be it handyman work, getting stuff cleared out, moved, shipped or stored.
I'm also so grateful to all our staff who did a great job with helping clients.
All this culminated in the team here at The Novello Group having the great fortune to help 152 families either buy or sell a home in 2016.
Thank you for this opportunity. It sincerely is a privilege.
Can I also take time time out to wish you and your family Happy Holidays from The Novello Group. We hope the season is full or warmth and comfort and a chance to spend time with loved ones.
We're expecting a really strong and robust 2017. Our intention is to sell 185 homes next year and we look forward to being of help and assistance to you in the future.
With the holidays approaching fast I hope that, if you've been listing your home, that you've not been tempted to take it off the market until the New Year.
Sadly this a trap many sellers fall into at this time of the year, prolonging the sales process. The usual reason is that they're under the very common misperception that homes do not sell at this time of year. The truth, in fact, is quite the reverse and at this time we see some of the most motivated and determined buyers in the entire 12-month cycle.
Many people relocate to start new jobs in January, which means that they are looking right now to ensure a smooth transition.
Locally, of course, we welcome many of our winter residents, so now is the time to be selling to them. Wait until the New Year and you'll have missed much of the chance to attract this key market sector, plus there'll be more sellers chasing the remaining seasonal buyers.
Remember that while you're taking a break from work, so are many buyers. This means they actually have more time than usual to view homes!
And if you’re concerned about having too many visitors while you’re trying to take a break, we can work with you to limit the number of viewings and avoid any specific dates.
Tax incentives for people to buy before the end of the year can be another important motivating factor.
Unfortunately, no matter how good the advice, some sellers will withdraw from the market until January. This in itself presents a great opportunity, in that you'll have less competition for the next few weeks and, as a consequence, your asking price will be that much more robust.
We’d be pleased to answer any questions or concerns you have about selling your home at this time of year. Please contact us today.
I've noticed in a few recent transactions, where we are representing a seller and have procured a contract with the buyer and agreed to a purchase and sales price, that the lending company's appraisal comes in a bit light.
For example, the agreed price may be $300,000, but the appraisal comes in at $290,000.
As a seller in that situation you have three distinct options at your disposal.
The first is to simply accept the reduced price and just go ahead.
The second option is to say "no" and ask the buyer to come up with the difference. However, with some changes to supply and demand in the market, and more choice for buyers due to better inventory levels, I'm not seeing them coming up with that difference in the way they might have done a couple of years ago.
Your other choice is to enter into negotiation with the buyer, perhaps agreeing to meeting around the halfway mark of the difference between the agreed and appraisal prices.
I hope this helps you in terms of spelling out your options in this situation.
Don't hesitate to contact us if you have any additional questions and concerns or if you are considering putting your property on the market.
Right now is actually a great time to be listing your property. A lot of people take their homes off the market for the holiday period, so you have less competition and stand the best chance of getting a great return on the sale.
As a buyer, it's a great time to be looking for a home as those sellers who remain on the market at this time are very motivated.
We look forward to the opportunity to earn your business.
In my last blog, I looked at how vibrant the winter home selling season is in our area and the wisdom of listing your home early (please click here if you missed it).
While the end of the year is always a very robust sales period in our area, due to the warm weather and secondary home market that peaks at that time, unfortunately it doesn't always mean that your agent is going to be there to support you.
Sadly, not all agents work the full 12-month cycle.
If you're unlucky enough to have hired such an under motivated agent, your home is very likely to remain unsold. This year that's arguably even more critical, with a new presidential administration starting in January, with all the uncertainties that may present, irrespective of who wins. There are also no guarantees that the low mortgage rates, that have done so much to stimulate sales this year, will still be around in 2017.
It often surprises clients to discover that the average agent in this country sells less than a handful of homes a year. Indeed, it's reckoned that just 5% of all agents do 95% of the business!
There are something like two million active agents in the nation, and many of them do not treat real estate as a full-time occupation. Thus, when the holidays move into sight, many are not to be found at their desks but on vacation somewhere, or indeed working another job...
It's therefore essential that you ask your agent if he/she will be working full-time to sell your property throughout the winter.
If you don't like what you hear, give us a call. We operate the full year with the same level of dedication and energy that we always devote to our clients. Why not contact us today.
Perhaps the most common myth in real estate is that homes don't sell in the final quarter of the year.
This is simply untrue wherever one lives, but especially so here in Southern Florida, where our warm winter weather and secondary home market combine to ensure that the end of the year is always a very strong sales period.
I'd like to encourage you to not only consider the significant merits of listing your home to capture the winter market, but also to do so now.
Once snowbirds with second home purchase in mind begin to arrive in our part of the world, we usually see the inventory of available suitable homes for sale rising by about 15%.
It therefore makes a great deal of sense to be an early bird yourself and list now, so that you don't miss the start of this brisk selling season and capture the interest of the very earliest arriving snowbirds.
The key advantage to being on the market before the inventory rises is that with less competition around in early season, your home will be more visible in the marketplace and crucially, when there is more competition, price becomes a major factor in selling.
We are very experienced in every aspect of the secondary homes market. Please contact us today and we'll happily answer any questions or concerns you may have.
Today I wanted to talk to you about offers that come in very soon after your property has listed.
What I often find in these circumstances is that, when an offer arrives after only a few days, sellers sometimes don't have a sense of urgency and adopt a "wait and see" attitude, to see if an even better offer comes in.
Ultimately, of course, you are in control of the situation - our job is to simply to help you to make an informed decision as to what to do with the property. At the same time, however, no agent can tell you with a high level of confidence how long it will take you to get another offer. No one has a crystal ball and it could take days, weeks or even months.
There is also no guarantee that the second offer, whenever it comes in, is going to be better than the first one.
So what should you do with an early offer?
Our suggestion to sellers is that it always makes sense to at least make a counter offer, even if the initial offer came in much lower than you were expecting. Buyers often test the water by making a low starting offer, often in the almost certain expectation of receiving a higher counter offer. This process gives you an opportunity to get closer, or to even reach, your asking price, enabling you to make the decision whether to accept the early offer or not a much simpler one.
I hope this information will be of assistance to you if you are currently listing or considering putting your home on the market. As always, please feel free to contact us. We are always delighted to be of assistance.
When it comes to selling your home, our intentions match yours, in terms of obtaining the highest price in the most reasonable amount of time.
In order that everyone is on the same page in achieving this goal, here are three common mistakes that sellers make when listing their home with an agent:
Pricing your home to suit market conditions is one of the key benefits of teaming up with a top performing agent. Your agent will have intimate knowledge of what other homes like yours are selling for in the area. Unfortunately, however, some sellers will try to insist that their home is the most unique in the neighborhood, for whatever reasons, and demand that the asking price is raised. Unfortunately, some agents will go along with this just to get the listing. Pricing your home uncompetitively will prolong the sale until the realization dawns that some correction is needed. Although we're in a lively market right now, correct pricing is still absolutely critical to success.
Misjudging Buyer Loyalty
It's a huge mistake to think that buyers will come back to you after they have made an offer that you haven't accepted. There are usually plenty of other options and this is where a good agent will work well for you, staying in touch with the buyer to explore any further possibilities. And if buyers don't turn up for a showing, never assume that they will reappoint. Once again, a professional agent will contact the buyer to try and set another date.
Attending the Showing
It may surprise you, but attending showings of your home can be hugely counter-productive. Buyers often feel nervous and awkward about making honest comments about the home when the owner is present. Even worse, you are also likely to be upset by any negative comments, starting the whole process off in a bad way. It's much better to leave this critical presentation entirely in the hands of your agent, who will know what to say, and when, avoiding the tendency of many sellers to say too much and put a far too personal spin on what they perceive to be the home's qualities. Much better to leave buyers to draw their own conclusions.
We hope the above tips are of use. We believe they also stress the importance of teaming up with the right agent. We look forward to the opportunity to be of assistance. Should you have any questions, please feel free to contact us.
Over the past month or so, a question that's come up quite a lot in negotiations is what does an "As Is" contract mean when it's applied to real estate?
When an offer is written on an "As Is" contract the buyer still has the right to do an inspection and isn't necessarily giving up the right to ask for a credit, or for work to be done if an issue arises.
However what is true from a seller's perspective is that if you have accepted an offer on that basis you are not obligated to do anything if something comes up in the inspection.
You essentially have options.
One option is to simply say "no" if a buyer makes a request in the inspection period and perhaps asks for a credit. You can respond by saying that the contract is "As Is" and the buyer needs to continue to proceed with the purchase.
The second option is that you can accept that the request is a reasonable one and do the work or provide the buyer with some sort of credit.
The third potential outcome is that you can negotiate. If, for instance, the buyer tells you that there is a leak in the roof and termites have been discovered and demands a $5000 credit, you can respond by saying you are prepared to offer, say, a $2000 credit.
So why do buyers even consider making an "As Is" offer? From their perspective, making an offer on an "As Is" contract structures things in such a way that the seller is more likely to accept an otherwise identical offer.
I hope that clears things up, if you were in any doubt.
Please reach out to us today if you have any further questions and, as always, we're happy to assist you in any way to help you get the result you want in the right timeframe. .
It's really quite incredible that we're already calling half-time on this year. Perhaps the reason it appears to have gone so fast is because we've enjoyed a very busy time.
Now approaching multi-year lows, mortgage rates have been a key driver for many buyers in this market so far in 2016. Experts were predicting a gradual rise in rates during this year to between 4.5% and 4.65%, but instead they have progressively moved south, with rates around 3.6% commonly available for a 30 year home loan. That represents a fantastic opportunity to lock in a low rate.
While nothing is guaranteed, there has even been speculation that a cocktail of disappointing economic news at home and continued financial uncertainties around the globe could send mortgage rates even lower.
Predicting the future direction of rates is a notoriously difficult task, as last winter's wildly incorrect expert forecasts proved, but what's undeniable is that buyer sentiment and demand in certain sectors is very high at present and sellers should recognize the tremendous opportunities for good returns that exist right now, rather than gambling on bigger returns later.
We've seen something of a split personality market locally, especially in terms of inventory of available homes for sale. While single-family residential homes at or below $425,000 have been in very heavy demand, inventory at the higher price points above $600,000 has been growing, due to less robust demand in that sector. The current affordability of home loans has unquestionably, and understandably, been a bigger motivation at the lower price points.
Moving forward, it's interesting that residential resales are at their highest level since 2007 and net worth in America is back up to 2007 levels, signaling that asset prices have gone up (stocks and real estate). However production GDP has not. This signals inflated asset prices. Also, I am noticing major banks bypassing FHA and offering out their own mortgage products, where buyers can put only 3% down for a mortgage.
It will be interesting to see how things shake out over the next six months. As I hinted earlier, I'm already seeing shifts in the market in certain price points where inventory is climbing and sales are slowing down. Prices are being pushed in a downward fashion in those sectors.
As ever, please contact us to discuss your best options moving forward.