By Aprile Osborne, real estate agent, Realtor and co-founder of Call It Closed International Realty
It is no secret the real estate market is hot, but in Naples it is on fire! The numbers from the Naples Area Board of Realtors show that home inventory in Naples is down by 76%, with 1,198 homes available in November compared with 5,006 homes available in Nov. 2020.
In fact, we are experiencing record low inventory and the number of available properties continues to decrease each day. A huge volume of folks are moving to Southwest Florida to transition their lifestyles and join us for the sunshine, palm trees and sugar sand beaches. From July 2020 to July 2021, Florida led all states in people moving from here other states, meaning there are too many buyers for available homes.
Stories abound of buyers having to make offers on multiple homes, only to be outbid by other buyers over and over. I even had a buyer who had an accepted offer but paid $200,000 over “just to be sure” he would not lose the deal.
While some have speculated that many buyers in this market are investors, my experience and that of many of my colleagues is that most buyers are end users and investors are having a challenging time finding property, too.
What is a buyer to do in 2022? Here are five tips that might help ensure success in this market.
Tip No. 1: Do not Fall Prey to Inflated Pricing
The biggest mistake I see buyers making right now is allowing the seller to dictate the price they are paying without any validation of that asking price. In many cases, there are no other comparable sales, and the sellers are only speculating.
I have had sellers want buyers to sign an appraisal waiver, which puts the buyer at risk of losing their escrow deposit if they back out of the deal or causes them to pay more than a home is worth when the appraisal does not match the asking price. In that case, the lender will not loan the extra money, so the buyer must be willing to pay cash for the difference between the appraisal and the purchase price.
It can cause buyers to overpay and put their families and even the agent at risk. This happens in a hot market when sellers think they can ask more than the market merits and when buyers get too emotionally attached and are willing to pay too much for a home.
Tip No. 2: Do not Overlook New Construction
New construction home inventory often is not on the market or local MLS and is rarely on Zillow. Also, new home communities sometimes do not have the most up-to-date inventory on their websites.
A seasoned real estate agent knows these communities well, builds relationships with the on-site salespeople and can often connect buyers with homes that are pre-construction or currently under construction that are not yet on the market. To keep on top of new construction opportunities, I follow land deals and follow up to see when projects are being built.
New homes are the best buyer opportunity right now and many times the buyer will move in already having positive equity, which is why I have six buyers under contact now for this type of property. This strategy often eliminates bidding wars for buyers and often can connect buyers with homes that will be available in as soon as five to six months.
Tip No. 3: Get to Know the Community You Desire
Put your ear to the ground. It helps you to know people or get to know people in the communities where you would like to live. Play a round of golf or have dinner at the clubhouse and meet the neighbors. Do not be afraid to ask people if they know anyone who may be thinking about or open to selling. It is the best way to find out about property that may be available before it even goes on the market.
It is also important for buyers to be educated about what they are looking for and be realistic about the numbers. Not doing that can be like going into Luis Vuitton and being sticker shocked by the price. Buyers need to be connected to the reality of where and what they are looking for, so they can shop accordingly.
Tip No. 4: Just Keep Asking
Work with an aggressive agent, someone who is willing to spend money they may never recover to find the best homes outside of MLS listings. A seasoned agent will know how to knock on doors to find property. To find one client a home, I mailed handwritten letters to people in the community. It worked! Your agent should be experienced and know how to find you the best deal in such a competitive market.
Tip No. 5: Hire the Right Agent
In this environment, it is critical to have an agent with experience, preferably one who has been working full-time in your market for at least four years. As a result, they will know the community inside and out and will have negotiation experience.
This is important because they will know where to look. In addition, they will have better expectations about how long you can expect to be looking. Also, with solid relationships with other agents in the market, they can alert you to listings as soon (or before) they hit the market. In addition, they will know other neighborhoods that you could consider to get the house and price you want.
Most importantly, do not despair! It is possible to find a home in this hot market with the right mindset, agent and strategy.
About the Author
Aprile Osborne, Call it Closed International Realty co-founder, has been a licensed agent in Southwest Florida for almost 20 years. Naples-based Call it Closed International Realty currently operates in 14 states. aprileosborne.callitclosed.com