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The BIG Questions in Real Estate

When I List My Home for Sale, What’s My Market, Really? What Are My Obstacles? How Do I Decide Whether My Realtor and I Are a Good Match? Part II

You really need a Realtor who is very active in your market — and markets around SWFL are relatively small.

Example:

  • Realtor A has sold 6 listings in Naples in the past 6 months. Their average sales price was $600,000.
  • Realtor B has sold 4 listings in NW Cape Coral in the past 6 months. Their average sales price was $220,000.
  • Realtor C has sold 10 listings in NE Cape Coral in the past 6 months. Their average sales price was $2,000,000.
  • Realtor D is your good friend’s friend, and sold a naked lot in La Belle last year for $7,000.
  • Your property is in NW Cape, and worth about $200,000.

So, Which Realtor Should You Choose?

Realtor B is the only one who knows your market.

Why is Knowing the Market So Important?

There are approximately 15,000 to 20,000 Realtors in SWFL at any given time. Yes, that’s not a typo; up to 20,000 Realtors. Just use your sense of logic. Are they ALL selling properties? Are they ALL experts in your neighborhood?

You know the answer.The Real estate market is no different from the stock market; it is ever-changing. Sure, it often changes more slowly than other markets, but sometimes changes can also come on very quickly. Sometimes the real estate market changes more quickly than the public, or even many professionals, can even grasp. I’ll never forget driving down I-494 in Bloomington, Minnesota, on one fine, icy day. I was shaking my head because I had just had two deals fall through:

Deal #1

My buyer’s Countrywide loan had just fallen through. When I called the lender, the lender stated – exacerbated – “Mr. Larson, I don’t know what to tell you… that loan is just gone.” I said, while navigating the icy interstate, “What do you mean it’s gone!?” He had said, “I’m not really sure. Pretty much all the loans I used to sell are gone.” www.nytimes.com/2007/08/26/business/yourmoney/26country.html

Deal #2

This deal “didn’t appraise.” I was so green, after four years of nothing but showings and sales, that I had demanded that they (somebody) appraise it. I told the listing agent, “So get it appraised!” The listing agent replied, “No. It didn’t appraise… for value.” I had demanded, “Well…… GET IT appraised for value!”

I, apparently, had thought that it was an appraiser’s job to simply mark a box stating “Yes” to the sales price. As I drove down that frigid interstate that day, in Bloomington Minnesota – watching for traffic, working not to slip as green and brown peeked through white snow all around me – I looked up and saw the sign. It was a giant billboard, which read: “Cold Real Estate Market Got You Down? Spring is the Perfect Time to Buy!”

It was the spring of 2007. A few months later, the real estate economy, followed by the economy of the entire planet earth, collapsed. I’ll bet that sign isn’t there anymore.

What’s the Bottom Line?

Every Realtor has access to the MLS. They can all look up the same basic information. They can all input the same basic information. Then your property goes out to all the websites.

As real estate professionals, we are often beholden to economic conditions, competing factors, and other challenges of which we may not even be aware until they are already upon us – or even engulfing us.

There is no question that this is a shifting economy. Interest rates are on the rise after years of historic lows. The stock market is on the drop after years of historic highs. Employment is at historic highs, even as underemployment is also at historic highs.

In some markets, your re-sale property is in direct competition with new construction. Many – if not all – of those custom home builders are driving prices down, and much of that inventory will never see the MLS. So, your Realtor may not take those properties (your biggest competition) into account when estimating value. And Zillow and Trulia may well not account for them, either.

But I do know one person who will, for sure, see those new custom home lots: your potential buyer.

In other markets, lender-required flood insurance rates have skyrocketed since Hurricane Irma. If your Realtor is not aware of that, boy is their buyer in for a $$$ surprise.

If you choose a Realtor just because they tell you a listing price that you want to hear, you may well be missing your opportunity to sell fast. And if you spend lots of energy trying to get someone who will do full service at a cheaper rate, you may well be missing your opportunity to get a great Realtor to pay attention to you and to your property.

Your best bet is to get three or four Realtors competing for your business by proving that they know the most about your local market, and your place within it. Once you have that squared away, pricing (and hopefully selling) will be as much Sunshine and Rainbows as is reasonably possible.

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