Thursday, 14 July 2016
Hello Naples Friends,
I hope you're enjoying this magnificent summer! Let's talk about break ups and back outs and how they can affect both Naples buyers and sellers.
- "Break up" according to Google: "an end to a relationship, typically a marriage."
- "Contract back out" according to Shannon: When sh*!! hits the fan and the contract falls apart after a successful negotiation.
Why: 99.9% of the time a contract back out or break up is typically due to some sort of property condition problem. Hey Naples real estate buyers and sellers can be pretty passionate about their real estate. Sometimes it has something to do with a problem so wrong, the buyer doesn't want the property anymore...like at all....not even if the seller is willing to fix it. Most of the time though it's because there's a bunch of stuff wrong. The buyer wants it fixed and the seller basically says, "uhm no". Then the buyer says, "ok, bye".
Sometimes buyers don't feel like they got a good enough deal so they use property condition to try to capitalize on recouping some of their cost of the property.
Depending on the type of contract agreed upon, more than likely the buyer can punt out and get all their earnest money back within 15 days of the effective date but you'll want to discuss those details with your agent regarding your rights. (My heavens...I am your agent, right?).
This all sounds heartbreaking for a seller doesn't it? You'd be surprised. Sometimes the seller says, "I'm not fixing your stupid repairs", because they actually want the deal to fall apart. We see this in the hottest market because sometimes they have a better second offer...yup another buyer at times will try a Hail Mary pass to squeeze into the deal. I told ya people were passionate about Naples real estate!
Sometimes the Seller feels so entitled they don't think they should have to do the repairs because they don't agree with an inspection report or because they don't think they were paid enough for the property in the first place.
When ~Do break ups happen? Let's take a look at what you can expect during different times of a real estate market.
- End of downturn starting to rise: Sellers know the market sucks and they're sad. Buyers know the market sucks and they're happy. When we see break ups here, nobody is surprised. It happens all the time...sellers eye roll, both buyer and seller agents eye roll and buyer is giddy because they have the upper hand. Furthermore, if they punt out of this one, there's 400 more properties they can take a stab at and maybe get better treatment. They like to use that last experience as a threat with the next one. "Listen here Mr. Seller, this is our third round, take care of us or we'll drop your house too"....que eye roll from everybody except the buyer. It's not uncommon for sellers to fix the things the buyer asked for but they'll fix the stuff buyers didn't care about too just to keep the buyer in the deal. Sometimes that still isn't enough. Not to mention buyers are typically nutty here. They have to be a little nutty at this point because they don't know prices are getting ready to rise and they fear they might be able to get a better deal if they wait a little longer. The economy is typically in the toilet too...that makes everybody squirrelly. This is the time in the market when the buyer makes the best deal and the seller gets the most crunched. Percentage of break ups here is a fraction less than at stage 5.
- Market is on the rise: By now buyers and sellers alike recognize the market is on the rise. Buyers know they don't have half the muscle they used to have (think middle age...oh joy). Sellers are happier than they were but they know they still need to play nice. Hey, at least they don't have to act desperate anymore. So when break ups happen here it's typically because some sellers jump the gun on being a little over confident. It's also because they already feel like they took it in the shorts a little bit when they negotiated their price. For buyers, there's still plenty on the market but they recognize they may not be as lucky on the next negotiation. If the seller seems a little less flexible during property condition negotiations, they may opt to stay in the deal for fear of the unknown of the next one. The buyer wishes they bought the year or two before but buy anyway. The seller questions if they should sell now or wait.
- Peak of the Market: Buyers don't say "bye" they say "buy". Sellers are taking them for everything they have and they may or may not do any repair work. Sellers are confident...sometimes they're obnoxious but thankfully in the Naples market, by and large we've got a good group of people...except for well...those guys over there. The number of break ups at this stage of the market are almost non-existent. So is the inventory so breaking up with a seller now means there may not be a second option for an unknown amount of time. If I see a break up during that time of the market I think, Dear God...how did that happen? Something must've really gone wrong. Buyers feel like they're being abused. Sellers are happily cracking the whip.
- Market is dropping: Well crud! Buyers and sellers both know the market is in decline. Sellers have their happy face on about doing repairs again yaae! Buyers have more to choose from but they're not going to be total jerks about repairs. They do want a good value for their property because if they're working with an agent like me, they know the market could continue to deteriorate for awhile which puts them in the red zone for equity or selling without bringing money to the table. Break ups are on the rise and because sellers have had no trouble entertaining dates for awhile, when the buyer does break up, think catastrophic heartbreak and turmoil. I mean, there isn't enough ice cream at Publix to put that out. Wine consumption rises and wine cellars empty. Just kidding...it's not that bad for most sellers. Sellers get mad at their agents. They fire them left and right. Because it's the seller's agents fault. Kleenex stock goes up.
- Market is in the toilet: Break ups, break ups, break ups. Agents can no longer afford wine. Publix doubles price of Kleenex and antacids. Restaurants up north begin to recover from happy Naples buyers clinking champagne glasses with their best friends over crushing fabulous Naples deals. Smart buyer best friends book flights to buy property in Naples...from the dinner table...except for the skeptical ones. They wait til the next wave and miss lots of great opportunities. Everybody's breaking up and everybody's mad about it. Sellers play agent roulette because it's still our fault that we couldn't keep the deal together because somehow we should've known the seller had radon or maybe we should've paid for repairs. Buyer's agents are the most attractive people in town...I mean we're greeted with red carpets and champagne. Buyers appear to be and are treated like unicorns. Buyers use their unicorn horn more than they should.
Where~ Are we now. We jumped the hump my friends. Breaking up became easier for buyers to do during the season of 2014-2015 and is more prevalent today. Seller's, it's time to ask yourself, "are we ok"? To avoid a tearful heartbreak, fix your real estate. I'm not proposing you go out and order a $2,000 series of inspections but be prepared. For condos, most buyers will want a mechanical inspection, radon and mold test performed. For single family homes you might expect a mechanical, mold, radon, termite, pool, roof...omg the list goes on. If you fix the stuff you know about and expect some things you didn't know about to show up on inspection reports, you can prepare yourself. If you plan to be on the hook for some repair charges, you're probably going to make it through just fine. For Pete's sake, I wouldn't let the buyer walk right now unless the buyer is being completely unreasonable. Please look to your intelligent agent for advice on this...you did hire one, right? If you didn't mmm...sorry, not sorry, I was here for you.
Buyers, now is not the time to go nuts. Yes, you're paying a very pretty penny right now but to ask the Seller to do crazy things for you is not the way to go. Be reasonable. I was out to dinner the other night in Olde Naples where I witnessed a guy tell the bartender he wasn't going to pay for his drink because the bartender removed his glass from the bar when he still had like 3 drops left. The bartender remained calm and professional but was firm in saying, "you need to pay your bill". The customer got belligerent and loud. Every single man at the bar took a stand and told the customer to pay his bill...one customer said, "hey buddy, you picked the wrong town we don't put up with that here". The moral of this story is don't be the guy who ended up paying his bill and being escorted out of the restaurant. That's just embarrassing for everybody.
Who~ Well me of course! I'm the one who can help you navigate through a successful sale regardless of whether you're a buyer or a seller. I like to keep everybody a few steps ahead of the game so there aren't any break ups. How I do it appears effortlessly because I am a master at my trade. Yeah...I wrote that. I don't stock kleenex either. I haven't had to in over a decade.
Extra insight: By the way, what happens to all of those poor sellers who experienced nasty break ups? Sometimes they say, "to hell with this" and exit the market....they wait for better times. Sometimes they say, "omg, we are not letting the next one go...for any reason". To experience that agony of defeat or in this case rejection can be quite lucrative for the next buyer. That's why it's good to have a smart agent run the property history of properties you like. We can see that stuff and ask questions to help you better negotiate or uncover the reasons as to why the first marriage didn't work out. Who knows, you may not want it either. Sometimes break ups can be as telling as price reductions. Sellers may not reduce their price which leads no clue as to seller motivation but break ups are often reported in property history giving the buyer's agent extra information.
Ok, that's all my friends. I hope you enjoyed my post and when you're ready to get moving, call me!
Shannon Lefevre, PA
Your Naples Smart Girl!
Saturday, 25 June 2016
Happy Summer Naples Friends!
Many of you are enjoying fabulous vacations, fun family time and all the glory of a magnificent summer. If you're a Naples real estate seller, you might be experiencing a bit of summertime sadness. If you're a Naples real estate buyer, you may be toasting to a great deal!
*Here's what's happening :
Inventories Rising, Sellers Are Accommodating.
New inventory is up 10% but that's not the only thing effecting the increase in inventory. Slower sales (15% down) and fewer pending sales (32% down) are also attributing to the number. Naples calculates a stable market based on 12 months of inventory. If there's less, we call that undersupplied. If there's more...well you get it.
Here's 3 markets where the market is oversupplied and you should be able to get some nice discounts:
- $10,000,000+ There's 2 years of inventory here...not including the pocket listings. If you're in the market for something ultra fabulous, you want to go with an agent who has the inside scoop on not only the stuff every average Joe can find on the Internet but also somebody with the connections to know what's secretly available. On average these bad boys have traded for 89% of list price but one bad ass got his for 73% of list. So this Port Royal home was on the market for $12,000,000 and closed for $8,800,000. Here's the deal, there was never any indication on MLS the owner was that motivated. They never did a price reduction in the near year it was on the market. The Naples luxury real estate market is like one big Easter egg hunt. Sometimes you gotta look around for that special deal. By the way, I already know some of those around town. That's why you want to go with someone like me who can help you find it as fast as possible.
- $4,000,000+ Golf Course Homes There's nearly 26 months of inventory here and the average days on the market is is 200+ days. While some owners are still pretty proud of what they have, there are others who are willing to deal but aren't necessarily showing their hand through price reductions. Don't rely on market history to fish out the deals. I know some deals that can be had in this segment and there aren't too many listing agents who aren't feeling the burn. I've found your most successful listing agents know precisely what the current luxury golf real estate challenges are and they are proving to be exceptionally accommodating because of it. Besides, golf may be less popular than past years but it's still a blast. I played twice this week and had the time of my life. Not to mention, several golf communities are going through expansive remodeling like Grey Oaks and Collier's Reserve just to name a few. Bay Colony just redesigned their course a couple of years ago and it is amazing. Pelican Bay is completely tearing their club house down and rebuilding to include a fitness center and other incredible amenities as well! If you're a golfer, you have to check out what's for sale!
- 4,500,000+ High Rise Condos There's 2 years of inventory here too and again, that doesn't include the pocket listings, several of which are located in Bay Colony. Talking about Bay Colony, there's a ton of work either slated to be done or being done right now. Remington at Bay Colony is getting a huge landscaping and pool remodel. Contessa at Bay Colony is talking about a huge pool deck and outside amenity level remodel as well. There are two incredible listings in Moraya Bay. There were none on the open market this past season so if you've been waiting for something fabulously remodeled or sellers happier to see you coming, now may be the time to strike! Keep in mind, the beachfront high rise condo market in Naples under this price is still exceptionally strong with low inventories so deep discounts, while attainable, are not necessarily easy to find or should be expected.
List Prices Are Dropping But That's Not The Smoking Gun
Price reductions are up 84% compared to this time last year. Here's the inside tip though. Some sellers refuse to reduce their price but will negotiate heavily when they see an offer. Oh I know, it sounds stupid, but that's what goes on in Naples. I'll bet you so many buyers are going to come back in October to see if that place they liked is still on the market. They'll be disappointed when they find it sold...they'll be suicidal when they find out what price it traded. Here are some examples:
- The winner so far this summer traded at 65% of list. It was a waterfront home in Connors. Listed for $2,199,000 sold for $1,425,000.
- Aqualane Shores home listed at $2,245,000 sold for $1,700,000
- Park Shore home listed for $1,995,000 sold for $1,540,000
OMG can you get Naples real estate for 50% off? (Jersey, you listen up) NO. It means there are some owners out there who want to do something else and will leave some skin on the table to walk away. So don't all of you "blood in the water" type buyers call me at once. The most successful buyers who cut these kind of deals are those looking for something somewhat specific, check stuff out and don't marry themselves to just one option and most of all they stay level headed.
When's The Best Time To Buy? I hate it when I see content that says something silly like, "now is the best time to buy". It completely depends on your entire objective.
Between now and early September is probably going to be the best time to buy if:
- You want to be in something by next season. Don't wait until you and all your friends and neighbors come trickling back in at the first sign of Fall. By then agents and owners are already gearing up for the next season. With summertime sadness upon us, owners are more interested in seeing you today so they don't have to carry their property while not using it through the summer.
- If you plan on doing minor remodeling to any high rise product. If you're planning on doing major renovations to a high-rise project, you more than likely missed your window. Most buildings don't allow you to do any noisy work after October.
- You've already identified your dream property. To think it will be here waiting for you through the summer is risky if it's priced well and risky if it isn't for all of the reasons I've already discussed.
Ok, so that's it for now. If you're planning on coming to town to take a peek or list your property, please contact me ASAP so I can reserve time for you. I'd hate to miss ya because I didn't see ya coming.
Cheers to a GREAT SUMMER!
Shannon Lefevre, PA
Your Naples Smart Girl!
* Numbers are based on $1,000,000+ Naples, Florida real estate between May 1, 2015 - June 24, 2015 and May 1, 2016 - June 24, 2016.
Saturday, 09 April 2016
Hello Naples Friends,
Here's the facts:
There's currently 38 Aqualane Shores on the market or 16 months of inventory which means pricing is coming down (cue sigh of relief from buyers). Results show 44% of the sellers in Aqualane Shores have figured it out since they have reduced their offering price leaving just that one guy who is currently listed at a higher price than where he started (...eye roll). List price to sales price ratio is still 93%, the same number as the year before which means nothing. What matters is sales prices per square foot values are down 19% from the year before. More telling is market time has increased 73%. Now that's H U G E.
What I'd say to a buyer interested in Aqualane Shores:
Stick and Move!
You have some nice choices right now. In fact there are 9 new homes on the market in Aqualane Shores and 3 incredible bay view Aqualane Shores homes available. Tear downs are starting at about $2.5 a sizeable difference compared to the last several years. Go ahead, fall in love but don't forget to keep your options open. Have the courage to write an offer but if you don't get a response or think the seller's response is a little unreasonable, you might be better off trying another one before settling down. The thing to remember is if 44% of the market has reduced their price, chances are there may be some more flexibility. Owners who havent reduced may be more accommodating as well especially since the odds of appreciating more at this point are probably not going to happen. It could be inventories continue to grow not necessarily because so much more is going to hit the market but because the number of sales may continue to drop. You can rest easy knowing you're not the guy who paid the most per square foot ever....unless you're planning on paying way over current list for something now. LOL!!! There are a variety of reasons why buyers are on the sidelines here. I have a couple myself who haven't pulled the trigger for different reasons. Don't be over confident in thinking nobody will be buying this late Spring and Summer. I am getting consistent feedback from agents around town traffic has picked up. I'm busier now as well. This is likely due to buyers looking for after season pricing. There are some deals to be had in Aqualane Shores This year, many of them are going to get it.
What I'd say to a seller wanting to sell their Aqualane Shores property:
Be Aggressive, B. E. Aggressive!
I know you don't want to look desperate. Do you want to still be looking at the sign in your yard 780 days later like one resident in Aqualane Shores is doing today? A Seller once described a longer than expected market time equivalent to kissing a girl of which he had already ended the relationship...funny not funny! If you price your property to sell, issues like increased inventory, even longer market times and ultimately a lower priced sale are all things you will likely escape. Just like ending a relationship, sometimes it's just better to end it quickly. Pricing higher in a depreciating market means less money in your pocket. A realization 17 owners have already recognized. Do what you can to keep the property in best showing condition and allow us to show it to a real buyer every chance we get. We'll do the rest! Once the offer comes in, be accommodating. Plan on repairing things you didn't expect or paying for repair items found on the inspection reports. More than likely the buyer will have an out on the contract if you refuse putting you back an open market position. Counter if you're not going to accept a contract on the first round but rejecting a low offer at this point could be the kiss of death. Lastly, hire a proven professional. I'm seeing examples all over town where agents without knowledge and/or relationships are losing out. This is not the time to leave a job like this up for chance. There are countless other tips and tricks on how to compete in a market like this. Contact me direct and we'll tell you how we can help you sell.
Ok that's all the time I have today. If you have questions let me know. If you're ready to buy or sell in Aqualane Shores or any other Naples neighborhood, give me a shout.
Send me a high five if you liked my post. Better yet, send it to your friends or hey, let's do some business!
Shannon Lefevre, PA
Your Naples Smart Girl!