Davidson Realty, Inc.

Best Strategies to Win a Bidding War

June 2, 2022

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Posted by in News, Northeast Florida Market Trends

When buying a home in today’s real estate market, be prepared to pull out every weapon in your arsenal. Most agents are dusting off strategies and techniques they haven’t used since the early 2000s to compete in this competitive seller’s market. “Homes are selling fast and for thousands over list price. Homebuyers need to be ready to move quickly and aggressively when they find a home they love,” shares Davidson Realty President, Sherry Davidson. 

 

Putting together an offer to sellers? Make it strong! With only a month’s worth of inventory up for sale, more and more buyers are making all-cash offers. Cash sales are attractive because the seller has seemingly no risk of financing problems and they save time with the elimination of the underwriting process. 

 

Opt for a shorter inspection period or no inspection. Make an estimate of how much necessary improvements will cost and consider them in your offer. For newer homes, waiving the inspection could be a valid tactic, but the buyer must truly understand and be comfortable with it as it could be extremely risky. 

 

Allowing the seller to rent back the home for a short time is another way to appeal to the seller’s needs. If the seller needs time to find or move into their next home, the buyer can allow the seller to stay for a set period of time and pay rent, usually the mortgage payment, or stay rent-free as the buyer would begin paying the mortgage. Being flexible could be what helps you win a bidding war!

 

Waive the appraisal contingency. The appraisal contingency allows a buyer to get out of a pending sale if the appraised market value of the home is less than the agreed upon contract price. If the contingency is waived, the buyer agrees to pay the difference between what the bank is willing to lend on the appraised value and the contract price. Waiving the appraisal contingency is clearly an attractive strategy, however, the buyer needs to be aware of the risk. 

 

A tool many agents are recommending to buyers to win bidding wars is an escalation or escalator clause which states the buyer will pay a certain amount above the highest bid. This clause makes the offer more attractive because it guarantees it will beat the highest bid. Usually, a limit is set on the clause to avoid the buyer overspending.

 

Footing the bill for closing costs and paying the commission for both sides of the transaction is another way to sweeten the deal for the seller. Additionally, writing a “love” letter could appeal to the emotions of the seller. Trusting your agent to help you select the strategies that work best for your situation is key. 

 

In this real estate market, be ready and act fast! For expert advice on strategies to catch the seller’s attention and put your offer at the top of the list, contact Davidson Realty today at (904) 940-5000. 

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The Things You Might NOT Know About the Real Estate Market in Northeast Florida

June 3, 2021

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Posted by in Ask Sherry, Neighborhoods, News, Northeast Florida Market Trends

The real estate market is notorious for its ups and downs, however, this real estate market is unique. Inventory is low, demand is high, and homes are FLYING off the market faster than ever! With so much uncertainty in this unprecedented market, it’s more important than ever to have a trusted real estate expert by your side to navigate the market.  Northeast Florida real estate expert Sherry Davidson, President of Davidson Realty, is answering some of the most common real estate questions from the community. 

 

How can I figure out how much my home is worth? 

Your home’s value is whatever the market is willing to pay. The market is changing very rapidly. It is in your best interest as a home seller to have a trusted real estate expert that knows the current market by your side to help you place a value on your home. Our team is selling homes daily and has the knowledge to ensure your home sells for TOP DOLLAR! 

 

Should I sell my home before buying a new one? 

The answer to this question has always been, YES! However, in the current real estate market conditions, the answer depends on your situation. If you sell, you need to have a rental home lined up or have the ability to live with family until you find your next home. If you put a new home under contract, you will probably not get a contingency to sell your existing home. You will risk losing your escrow deposit if you can’t close or you will have to acquire a bridge loan, extra savings, or a gift to close on the new home before you have the closing on your existing home.

 

Is World Golf Village expanding? 

With a few small exceptions, the only portion of World Golf Village not built out is Trailmark. There are new phases of homesites still becoming available in Trailmark.

 

What is the next go-to area to move to in Northeast Florida? 

There are so many incredible communities in Northeast Florida. However, Silverleaf is extremely popular right now. Silverleaf is located in highly desired St. Johns County, Florida, and just minutes from various shopping centers, beaches, golf courses, and entertainment.   The community will also be home to a first-class amenities center for residents to enjoy! 

 

If you are interested in buying or selling a home or have further questions about the market, contact Davidson Realty at (904) 940-5000.

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Real Estate Market Update

May 20, 2021

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Posted by in News, Northeast Florida Market Trends

“You just can’t beat the person who never gives up.” Babe Ruth

 

If you want to buy a home in today’s market, you should listen to Babe Ruth. Most buyers are having to be persistent and make offers on several homes before they get a home under contract.

 

The Northeast Florida Association of Realtors market stats for April continue to show high demand for homes and limited supply which is causing price increases.

 

There were 3,615 pending sales in April which is up 52% over last April; however last April COVID was a factor in less contracts being written. The year-to-date numbers for pending sales are up 27% so you can see there is increased demand in the four-month period.

 

There were 3,177 closed sales in April which is a 27% increase month-over-month and 20% year-to-date.

 

The median sales price is $284,941 which is up 14% over last month and 12.5% year-to-date. The average sales price is $357,438 which is up 20.5% over last month and 18% year-to-date.

 

The most staggering statistic to me was the percent of properties sold over list price. For the properties that closed in April, 36.9% sold over list price. That is a 142.8% increase over April 2020. The average for the previous 12 months was 13.3% selling over list price.

 

On the supply side, there were 3,991 available homes for sale at the end of April which is down 58% from last April and there are 1.2 months supply of homes for sale. A balanced market is 5 to 6 months.

 

There may be better news coming to help with supply. A survey by Realtor.com indicated more sellers plan to put their homes on the market. Another survey by NerdWallet of 2,127 homeowners shows 1 in 6 (17%) plans on selling their home in the next 18 months. In fact, 45% of those planning to sell say higher asking prices and lower inventory have caused them to sell earlier than initially planned.

 

NAR Chief Economist Lawrence Yun predicts an increase in the 30-year fixed mortgage interest rate to an average of 3.2% in 2021. “As mortgage rates increase, the frenzied multiple-offer situation will become less prevalent by year’s end, as affordability challenges squeeze out some buyers and more inventory reaches the market,” Yun predicts.

 

“With more inventory and some easing in demand, home prices are expected to shift to mid-single-digit appreciation by the fourth quarter and in 2022,” Yun says. He predicts that:

· Median existing-home sales price will increase 7% in 2021

· Existing-home sales will grow by 10% as more homes reach the market

· New home sales will increase by 20%

 

These predictions are great news. In the meantime, if you are interested in buying or selling, please contact a Realtor with knowledge of the market. We would love to help you navigate these interesting times.

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4 Ways to Sweeten the Deal When Buying a Home

May 5, 2021

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Posted by in News, Northeast Florida Market Trends

The real estate market is unlike anything we’ve seen before. Inventory is low, demand is high, and homes are flying off the market! “With the current market conditions, listings are receiving multiple offers and buyers need to be ready to act fast with their best offer when they see a listing they love,” shares Davidson Realty President, Sherry Davidson. In such an intensely competitive market, trust the real estate experts at Davidson Realty to help you put your best foot forward with these strategies. 

 

Get Pre-Approved for a Mortgage

The first thing you should do when you decide to purchase a home is obtain a pre-approval letter. A pre-approval letter not only states what a lender is willing to lend to you but shows the seller you are serious and prepared to purchase a home. A pre-approval letter shows legitimacy and a sign of good faith that they can afford to buy the home. Sellers are more likely to select an offer that is pre-approved than one that is not. 

 

Eliminate Contingencies

A clean offer is extremely attractive to sellers. “Any contingencies you have in your offer could be a negative to the seller. Sellers want a low risk and speedy closing,” shares Sherry. Appraisals are often a major cause of home sales falling through. Eliminating this step allows for a smooth sale process with minimal chance of things going wrong. As the buyer, you are effectively taking the risk off the home seller and putting it on to yourself. 

 

Make an All-Cash Offer

All-Cash offers provide the unique opportunity of keeping the sale primarily between the buyer and the seller. Cash offers tend to be stronger than offers utilizing traditional financing because they are less risky for the seller. With a cash sale, no appraisal is necessary since there is no mortgage lender involved. The absence of a mortgage lender also allows for a quicker closing. A fast timeline is advantageous for sellers because the sooner they close, the sooner they get paid.  

 

Be Flexible

Including a flexible timeline in your offer can go a long way with sellers. Depending on the sellers’ situation they may need more or less time in the home than the traditional 30-day closing period. If you are not in a hurry to move, being as adaptable as possible will be to your advantage as the sellers will then be able to decide what works best for them. This can go a long way, especially if competing offers come with strict deadlines. 

 

If you are ready to begin the search for your next home, call Davidson Realty today to help you get started. 

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REAL ESTATE MARKET UPDATE

April 23, 2021

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Posted by in News, Northeast Florida Market Trends

“God could not be everywhere, and therefore he made mothers.” Rudyard Kipling

 

I wish every mother a Happy Mother’s Day!

 

The Northeast Florida Association of Realtors market stats for March shows 3,782 homes available for sale compared to 9,484 last March, a 60% reduction. It appears the low supply of homes for sale, high buyer demand and rising prices will be with us for several years.

 

The single-family home for sale inventory peaked in 2007 with about 3.7 million homes available nationally and has been dropping since then to 1.07 million homes currently.

 

A great article from The Mecklenburg Times cites the reason for continued buyer demand as low household formation rates following the Great Recession. If the historical household formation rate had continued after the recession, there would have been 5.7 million more households formed.

 

“The mid-2000s financial collapse began a domino effect. Roughly $6 trillion in real estate equity vanished during the housing crash, impacting the ability of many families to pass down wealth to their children. Young people who finished school around the late 2000s faced a soft job market, which can have long-lasting effects on a person’s finances and their ability to start a new household. Previous Zillow research has shown it takes about six years for homeownership rates of those who graduated college during a recession to catch up with those who graduated during better economic times.”

 

The last two years had shown that when the economy is good and most Americans have access to decent jobs, more of them are able to find a home of their own. More Millennials are turning 33 which has been the age most are marrying and starting families. This trend should continue rising for the next three to four years. Add to this the retiring Baby Boomers who are downsizing and the COVID-related moves where people can work from anywhere. The demand should continue for several more years at least.

 

The supply is tight and the demand is strong, so prices are rising. The median sales price is $274,900 up 12.7% over last March. The average sales price is $344,643, up 20.4%. Many buyers are offering to pay more than list price to get the offer accepted among multiple offers. The percent of properties sold over list price spiked 102.1%. In March 2020 14.2% of properties sold over list price and in March 2021 28.7% paid over list price.

 

It is a seller’s market, so if you are considering selling, we are happy to assist you. If you are interested in buying, we are finding ways to get offers accepted. Thank you for your continued trust and please let us know if we can help in any way. Happy Mother’s Day!

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