When it comes to buying and selling real estate, it’s important to make informed and educated decisions. The worst thing to do is to speculate about the seller, the buyer, the market conditions, the property, etc. Speculating on any of these things can cause buyers to lose out on a property they really wanted, over pay for a property, plus more. Likewise sellers could lose equity, take longer to sell, plus more. Here are a few ways that buyers and sellers speculate today and how to avoid it:
- The market – Many people are still under the impression the local market is distressed, but the reality is that the conditions have improved a great deal locally. We are looking at the lowest inventory levels of available properties for sale in many years. Demand is up. And properties are selling on average around 100 days or less. This is one of the reasons I provide market stats monthly to help buyers and sellers make more educated decisions. Check out the local market reports.
- Zillow, Trulia, and pricing – These sites are nice for shopping, but pricing data is far from accurate. Most people have never looked at the disclaimers or either site that explain the inaccuracy in black and white (click here for Zillow’s Zestimate stats for Florida). As you can for Flagler County, they have only been with 20% of the sales price 83.6% of the time with a 7.4% median error. For a $200,000 purchase you are literally gambling almost $40,000. Don’t base your offers or selling price on these estimates. This is where recent comparable sales and weighing all of the conditions comes in to make smart offer or initial listing price decisions.
- Seller motivation – The biggest mistake many buyers make here is to think that all sellers are desperate to sell. This often leads to very low offers, rejections, and losing out on a property you really wanted. Sellers today in our local market are dealing with less competition (less homes for sale) and increased demand (more buyers and buyer activity). They often are not desperate at all and will often just end the conversation with a rejection and sell to someone with a higher offer in no time. The key to negotiation is to keep the conversation going, and a good initial offer will do just that.
The biggest way to know if you are “speculating” is when you catch yourself saying “I think . . . “. Turn those “I thinks” into “I know”.
Flagler County Market Update as of 11/2/2013
- Active homes for sale: 885
- Homes closed 10/28/2013 thru 11/1/2013: 28
- Lowest: $69,000
- Highest: $527,000
- Average: $182,850
- Median: $195,060
- Homes closed 10/1/2013 thru 10/31/2013: 142
- Lowest: $33,577
- Highest: $1,100,000
- Average: $197,477
- Median: $155,000
Disclaimer: Information based upon the Flagler County Association of Realtors MLS for Residential Houses as of 11/2/2013. Information may be deemed reliable, but is not guaranteed