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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Our Agents Answer Six Common Real Estate Questions

November 8, 2021

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Posted by in News, Northeast Florida Market Trends, Staff

For nearly two years, seemingly every industry has had to deal with unprecedented changes. The real estate industry is no exception as inventory of homes for sale and interest rates were at historic lows causing the market to be fiercely competitive. As the story of the real estate market continues to unfold, it’s vital to have an experienced real estate professional by your side. Northeast Florida real estate experts at Davidson Realty are answering some of the most common real estate questions. 

 

When is the best time to sell a home?

“Quite a few people have asked me this lately and, honestly, in Florida or at least in our area, our selling season is year-round. Especially with the low inventory, we are experiencing, there doesn’t seem to be a wrong time to sell your home. Buyers are watching the market very closely for new listings to pop up. Some markets may slow down in the winter, but we have snowbirds who begin their search in January,” shares agent Shelley Nemethy. 

 

With the current market, should I still buy a new home before I sell my old one?

“If your current home is in an active community and in excellent condition, buying a new home before selling your current home could certainly be an option. However, if it is too much of a financial risk to put yourself in, in the event you had to carry both mortgages, I would advise against it,” shares agent Jennifer Todd. 

 

Is it still a seller’s market?

“It is still a seller’s market. Until we begin seeing a more balanced inventory in homes available, it will continue to be a seller’s market,” continues Nemethy. 

 

How should I prepare my home before selling it?

“Pack away or get rid of all clutter. The removal of clutter and items that you don’t need on a daily basis will enlarge your home. Eliminating excess furniture can also make a huge difference in how a home shows, “ shares agent Lynn Whitley. “You will recoup the cost of renting a storage unit and you will be a step ahead on packing when you accept an offer.”

 

What is your best advice for current home sellers?

“I suggest pricing your home to the current market and letting the market take the price to where it should be,” continues Todd. “ Always have your home spotless, no one wants to buy a dirty home!”

 

What is your best advice for current homebuyers?

“Hire an experienced real estate agent that knows how to help a buyer bid and win in this current competitive market. You’ll be glad you did,” continues Nemethy. 

 

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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How COVID-19 Impacted Real Estate in 2020

January 15, 2021

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Posted by in News, Northeast Florida Market Trends

The resilience of the real estate market was perhaps the biggest surprise in 2020. Despite the COVID-19 pandemic, the loss of millions of jobs, and a crippled economy, millions of American’s made waves in the real estate industry by browsing and, oftentimes, purchasing a new home. With thousands of businesses negatively affected by the COVID-19 pandemic, the real estate market saw positive trends and record-setting numbers.

 

The 2020 real estate market was expected to see steady growth. Lawrence Yun, National Association of Realtors (NAR) Chief Economist predicted there to be more than 750,000, for an 11% increase, in new home sales while existing homes sales would be repressed by low supply of homes to more than 5.56 million for a modest 4% increase. The median home price was anticipated to land at  $270,400 for an increase of 4.3%. Overall, the NAR was forecasting a healthy year for real estate. 

 

At the end of the first quarter of 2020, in the infancy of the pandemic, the real estate market was merely reacting to the sudden, bizarre changes that were happening in the world. With the new phrase called “social distancing” added to American vocabulary, all players in the real estate industry were in uncharted waters. With schools closing and businesses shut down, the needs of home seekers shifted.  

 

The COVID-19 pandemic made an interesting impact on the real estate market. While inventory was low and homes were selling quickly, the NAR reported a surge of people moving to more rural areas from larger, more crowded cities while desiring more moderate climates. “We are seeing many buyers coming from the Midwest, Northeast, and South Florida,” shares Sherry Davidson, President of Davidson Realty. This shift was caused by multiple COVID-19 related effects. Offices started allowing employees to work exclusively from home to successfully socially distance and people were enjoying the new routine COVID-19 brought and desired a slower pace of life. 

 

Throughout the changing times, Davidson Realty was able to adjust to new safety procedures and listen to the new needs of their clients. “Buyers were looking for homes that were more in tune to the daily needs of their families. Many were working from home and homeschooling their children, requiring more functional space for work and play,” shares Sherry Davidson. “Families were eager to purchase a home, but with inventory at record lows, we were seeing multiple offer situations and buyers were paying more than appraised values. Sellers were in a position to not consider offers with contingencies for financing and appraisals.” With interest rates at record-setting lows, buyers were eager to get their hands on their dream home. 

 

Although NAR has not yet released their year-end sales report, NAR reported in December they were expecting to reach 5.52 million in purchases in 2020, which is the highest annual mark since 2006. They also anticipate the median home price will hit a record-setting high at $293,000. Lawrence Yun has stated that the momentum from the second half of 2020 will carry into 2021.  Yun foresees interest rates remaining favorable and an increase in supply which will give home buyers more choices and repress home price growth. 

 

It’s safe to say the real estate market is still on fire. If you are interested in buying or selling your home, contact Davidson Realty today at (904) 940-5000. 

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