Fact Or Fiction Here Are 5 Florida Real Estates Rule Of Thumb
Dated: February 2 2016
Fact or Fiction: Here are 5 Florida Real Estates Rule of Thumbs
Smart Buyers and Sellers in Florida should cast a suspicious eye at super simple real estate rules of thumb when searching on www.askbarb.realtor
Let's take a look at 5 most persistent ones in Florida head on, and decipher which of them are fact, and which are fiction.
Rule of Thumb #1: Location, location, location. Fact or Fiction: Fact.One of the elemental truths of real estate is that almost everything can be changed about a home - except its location. By the same token, location is essential to our ability to afford and enjoy living in a place, given that it impacts everything from: where our children go to school (and whether or not we have to pay for it), how much time and money we spend getting to and from work, our safety, the beauty, quiet and convenience of our surroundings and the recreational, shopping and cultural options which do - or don’t - become part of our daily lives.
Location impacts whether you live on waterfront, +55 Communities, Gated Communities, non-deed restriction area, living on the water or close to a boat dock, golfing communities, may be what you are looking for. A few more location impacts whether you living hear train tracks or birdsong in the morning, whether your neighbors bring you cookies or bring you drama when you move in - it can even impact your career and job prospects. The deep, numerous impacts of where we live on our experience of a home, in turn, give location a powerful role in driving whether we can resell our homes - and for how much.
Rule of Thumb #2: It costs more to buy than to rent your home. Fact or Fiction: Depends on where you live. Just today, Trulia released its latest Rent vs. Buy study, showing that in 98 percent of American cities, it's actually less expensive to buy a home than it is to rent! Of course, the type of home you might want to buy could be more pricey than what you’d be satisfied living in as a rental, and buying a home requires an upfront chunk of dough (i.e., down payment and closing costs) that renters don’t have to come up with.
But the age-old would-be buyer objection that “I can’t afford to buy a home” is now frequently shattered by the reality that when you take all things into account, buying a home at today’s prices and interest rates can actually cost the same or less than renting at today’s relatively high rental costs in many areas.
That said, if you live in San Francisco or New York City, chances are good that it does actually cost more to buy than to rent. But if you live elsewhere, it behooves you to actually do the math, factor in the massive tax advantages of home-ownership and see which is truly more expensive for you. And make sure your decision accounts for the massive opportunity costs you might incur if you don’t take advantage of today’s prices and rates to buy a home of your own and start building equity - something you can simply never do as a tenant.
Rule of Thumb #3: List it high, to give yourself bargaining room. Fact or Fiction: Fiction.The fact of this matter is that if you are selling a home in a strong buyer’s market, your competition is steep. The home that presents the best value for the price is the one that is the most likely to sell. Listing your home higher than what you know it’s worth is a surefire way to alienate that relatively rare specimen: a qualified buyer with a sense of urgency who might otherwise be interested in making an offer on your home. Smart buyers who are ready to leap off the fence into home-ownership do their research, and may have seen dozens - even hundreds of online listings before they make an offer. If your home is overpriced, chances are good that they’ll pass your home up, even if they like it, waiting for you to get a clue and cut the price.
There are simply too many other great homes at great prices on the market. Overpriced listings are much more likely to be a source of prolonged stress and hand-wringing to their owners than a source of successful sales.
If you're tempted to list your home high, there’s something else you need to be aware of: the sweet spot phenomenon. Homes that are listed too high sometimes go through one, maybe even several, price cuts before they hit a sweet spot - the price at which buyers are drawn to the value like moths to a flame, sometimes even generating multiple offers over the discounted price (but below the original list price). Here’s some good news: you don’t have to wait months and months and go through the agony of showing upon showing and price cut upon price cut to get your home’s list price to the sweet spot where it sells.
Work with a local agent who has a strong, recent track record of selling homes, quickly and at or near their list prices, in your area. Then, trust their pricing advice. (You might find it easier to trust them if you select your agent after speaking with several.) It’s the most efficient way to leverage local market expertise to get to your home’s pricing sweet spot, quickly and with minimum drama.
Rule of Thumb #4: Always offer 10% below the asking price. Fact or Fiction: 100% baloney. I mean, fiction. Few decisions in real estate are so nerve-wracking as that of how much to offer for a home. These days, we search online for comparable, try to suss out their similarities and differences between those homes and our target property, run some more numbers - there might even be a spreadsheet or two involved. We ask our agent to talk with the listing agent, get a feel for the seller’s motivation level and figure out whether there are any other offers, then try to factor the competition level and any credits or bank involvement into our thinking. We touch base (again!) with our mortgage broker to understand how rates have changed since our last conversation and exactly what the monthly payment will be if we offer X or Y or Z.
And at the end of all that, buyers often still feel like the final decision about exactly how many dollars and cents to offer for their home amounts to something like licking their finger, sticking it into the wind, and just picking a number. And that just seems wrong, for a decision so important.
Long story short - the specifics of each listing’s situation absolutely must be taken into account when deciding how much to offer, along with the comparable sales data and the buyer’s own (a) financial concerns and (b) motivation level for getting the home.
Rule of Thumb #5: Listing your home as a FSBO will save you some dough. Fact or Fiction: Fiction (with the occasional exception).I know some will argue this point, but the data is unequivocal: homes listed for sale by owner (FSBO) simply sell for less than similar homes listed by agents. From my own observations, I’d also argue that FSBO listings often simply don’t sell at all, and many end up listed by an agent after wasting months and months of the seller’s time.
The fact is, listing your home for sale by owner might save you the commission you would otherwise have paid to a listing agent. But the FSBO sellers who are successful generally do offer to pay the buyer’s broker’s commission, so the prospect of saving the full 5 or 6 percent agent commissions is more realistically the prospect of saving 2.5 or 3 percent.
Beyond that, the smartest FSBO sellers also often end up:
paying a limited service broker to list the property on MLS,
paying for professional staging or investing in some level of property preparation, even if they do the labor themselves, and
paying for an attorney to assist them with the disclosures and contracts involved in the sale --
all services that are frequently included in an agent’s services. And even those FSBO sellers still forgo the objective pricing advice and marketing expertise that a good, local listing agent would bring to the table, all included in the commission.
Fact is, many sellers who don’t hire an agent, but do cobble together a similar level of professional services and account for their own time spent on a FSBO listing, soon see that they’re not actually saving much money at all. And even those who think they can save soon see that there’s no savings if the house doesn’t sell - a common fate of FSBO’s on today’s market.
Sellers who already have in hand a buyer who is ready, willing and qualified to buy their home are the best suited for selling by owner, with the help of legal, title and escrow professionals, in my opinion. Most others should at least talk to several agents, discuss whether there’s any flexibility on commissions and be honest with themselves about what the prospect of marketing, preparing and selling the home DIY would really look like, before assuming that they’ll save a ton of dough by listing it FSBO.
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