Florida’s real estate market is currently booming owing to the quality of life, great weather all year round and a soaring job market.
In case you are about to make a real estate purchase in Florida, here are some dos and don’ts so you’re well informed and can make an informed decision. And so, we collaborated with some of the leading real estate brokers across Florida to bring you their views on what must you do as a buyer and/or a seller in the current, hot real estate market.
Related: Hire hard money lenders in Florida for a fix and flip loan, rental loan or a landlord loan.
1. Kathleen Floryan, Broker Associate At eXp Realty (North Florida)
My advice to sellers… Your listing price is the key to selling your home, no amount of marketing is going to sell an overpriced home. You determine the listing price based on market evidence of sold and closed properties that are relevant to your property in terms of size, condition, location and improvements.
Do not expect to get 100% of your home improvement investment in the sales price. If it’s a terrific house at a terrific value, the buyers will flock to it and you will know in less than 2 weeks if you are priced correctly.
My advice to buyers…. make sure you have proof of your ability to purchase, either in the form of a letter of introduction from your financial institution or bank statement OR a pre-approval letter (not pre-qualified letter) from a local lender.
If you are moving from out of state to a new state it is always best to use an in state lender as well as an in state insurance company. Use an experienced real estate professional who has demonstrated years of experience if you are purchasing a single family home in a competitive market.
That person will have had experience with a variety of challenges including short sales, foreclosures, writing escalation clauses and winning competitive bids.
When buying new construction, make sure you are represented by an experienced new home construction agent. While there may not be any help in terms of negotiating price at this moment, site selection, square foot, design and potential concerns for future resale are all important insights.
The builders represent themselves. At the very least, do plan on getting an independent home inspection with a company well versed in the area new construction.
2. Howard Flaschen, Broker/Owner at Round Table Realty, Inc (Jacksonville)
Advice for buyers is to be patient and not fall in love with only one option for sellers is to be patient and let their amazing Realtor get them a great deal for their home. They don’t have to rush.
3. Sunny Alexander, Broker Associate At Coastal Properties Group & Christie’s International Real Estate (Tampa)
My advice to buyers is to go in with a plan and eyes wide open. They should interview agents before picking a Realtor to represent them. This market demands a Realtor that works full-time, is knowledgeable, experienced, and has a good rapport with other agents.
Once they choose their Realtor, they should ask their agent what options they have to make their offer more attractive to sellers. I typically provide a “menu of options” to buyers before we start looking. This menu outlines different stipulations and techniques that will make their offer stand out.
Also, they need to get pre-approved and not pre-qualified. Pre-approval makes an offer stronger. Finally, I always stress that they WILL find the right home, but it may not be on their timeline.
4. Cinthia Gonsales, Licensed Real Estate Agent At Redfin (Greater Orlando)
In this highly competitive market, it’s important for buyers to work with an experienced agent that is aware of the current market condition and knows what it takes to win in a multiple offer situation.
A responsive and knowledgeable buyers agent is crucial in order to stay competitive against other buyers but at the same time not overpay for a home.
Sellers are definitely benefiting from the current market conditions. In Florida 35.8% of homes sold are going over asking as the inventory can’t keep up with the high demand.
Sellers can expect to receive a high number of offers for their property and should rely on the expertise of an agent to review all offer terms and choose the option that best fits their needs. In this pandemic-era, another important thing to remember is safety. Owner-occupants listing their homes should take extra measures such as sanitizing their home after showings.
5. Harvey Kosberg, President At Harvey Kosberg Company, LLC. (West Palm Beach)
We are seeing a slow down here in South Florida and what I mean by that is the Hot, Hot, Extremely Hot market, where offers coming in were multiple offers usually higher than the listed price, and even for cash, as is, no inspection has seemed to be slowing somewhat.
Now buyers are able to make a full price offer with contingency’s, like inspections, and mortgage approval. Although the smart Agent will get mortgage approval prior to an offer with the only contingency is the appraisal.
Buyers today need to find an agent that has been in the market for more than 3 years and full time. My last buyer was looking for a home for over 1 year and the first thing I thought was “no way am I going to work with a buyer who couldn’t settle in on a home for a year.
The poor inexperienced agents that spent time with her. I told her she must get mortgage approval first and then we will find a home her in West Palm Beach. She said no one told her that as she has a great job and great credit. However, that doesn’t mean anything to an experienced agent.
We know if you’re not a cash buyer who can show your bank account or a lender that has approved you an experienced agent should not work with you. She did get mortgage approval and I found several homes for her, one of which she bought for $5,000 less then asking price because it was an estate sale and needed cosmetic repairs.
Nothing she couldn’t have done herself. The market is still very hot in that it needs to catch up to the homes that were not constructed during the pandemic. There will not be a real estate crash as long as mortgage money is available and it will be.
Sellers, be sure to get a comparable market analysis from the agent when they come by as they can search all the current sold properties and also properties that sold by owner and not through a real estate company. This is valuable information when you price your home for the current market.
6. Eric Odum, President At Florida ROI (Tampa)
I think it depends on the asset class investors are targeting. The investment markets are hot across the board, with the exception of office, which is spotty. Retail, Industrial, and multifamily continue to experience CAP rate compression. Our business, Florida ROI, focuses only on commercial assets.
But I personally have invested in residential for years. Single family home properties have the added pressure of user/owner occupied supply shortages, which are leading to prices trading much higher than asking price with multiple offers, certainly in Florida, anyway.
Part of this is seasonal, as families with children tend to make most of their moves over the summer when school is out. I would suspect we will see some easing in the fall, but demand will still be intense and demand and supply will continue to be out of balance.
Our advice to investors has always been to make sure the numbers work, which is very hard in a fast moving market like this. But, over the years I have been in this business, the investors who reach on deals and ignore discipline tend to be the ones who have a disproportionate share of the losses when the market softens.
Office is going to be a tough road in the near term, as companies are reassessing the amount of space they actually need. Office is not going away, but it is evolving. There is a reasonable chance you can pick up some good deals, particularly in the suburban office market. But, be selective. The office investment space is not going to a rising tide that lifts all boats.
7. Alex Galitsky, Broker-Owner At Top Orlando Realty (Orlando)
Advice for Buyers:
In the current hot real estate market, my advice to the buyer is to be aggressive and patient. When making an offer, consider using an escalation clause so that you don’t compete against yourself.
For example, if the asking price is $300k and you are willing to pay $325k you would offer $300k with an escalation clause beating any other offer by $1k up to $325k mark. It is typical that properties get multiple offers and the highest offer which gets selected sometimes falls apart.
The winning bidder may get cold feet and back out during the inspection period, or their financing may fall apart.
The key is to have a good agent on your side and communicate with that agent that you really want this particular house or several ones you have viewed and decided to make an offer on and have your agent follow up with the listing agent(s) on a regular basis to stay on top of mind so if the current deal falls apart maybe they will let you have the deal without putting the property back on the market.
Save the property as a favorite so if it comes back on the market you can resubmit an offer right away. Finally, consider writing up an official backup contract and have the seller agree and to sell to you if the current deal falls apart.
Advice for Sellers:
In this hot market it’s easy to be tempted to overprice the property or to lower the commission. Although it’s true that you will probably find a buyer to buy just about anything, not all properties sell quickly and not all maximize the net for the seller. My advice is to listen to a local agent and price the home fairly and within the selling range.
This will generate the most interest and get the house under contract quickly. Buyers want a deal in any market and you want your house to look like a good deal so that you have multiple offers and hopefully good offers above asking. When selecting a buyer to work with, the highest offer is not necessarily the best one.
Sometimes the highest offer can’t qualify, needs closing costs, and will never close. Pick the strongest offer (cash, high down payment, etc.) and make sure your agent contacts their agent first to feel out the situation and learn more about the buyer’s motivation.
Sometimes a buyer looks good on paper and when you talk with their agent you find out that buyer is not totally in love with the home and are still looking at other options. In that case, you may want to move on to a different buyer who really really wants the house and won’t nickel and dime you during the inspection and maybe even be able to and willing to pay above the appraisal if appraisal comes in lower.
8. An Flamand, Owner & Broker At Orlando Vacation Realty LLC (Orlando)
I strongly recommend for buyers to create a list of ”must have” and ”great to have”, this way they can double check that all their needs are met, when having to act quick to secure a home. People are now buying and changing their mind as they realize a few days later the home does not fulfil their needs. The low interest rates and the impact of the pandemic has created a buying frenzy. Legal or professional representation is more important than ever and free to the buyer, very often for sale by owner properties are sold without having proper contracts or due diligence completed. The new owners could have the risk of having a cloud on the title which will ultimately be their responsibility, this is why it is important to have the necessary disclosures and proper representation in place. The liabilities are higher, during these buying frenzies.
Buyers also need to be aware that every detail in the contract matters, it will be competing with other buyers who are also very often offering above the asking price.
Sellers on the other hand now have an amazing opportunity to sell their home swiftly and at a higher than the market valued price. With this comes the good and the bad as people often buy fast, without realizing, repair costs or other issues, ignoring or skipping disclosure forms or inspections with cancellations and lawsuit risks to follow. When selling real estate, it is vital to hire representation to make sure you are protected incase things would go sour.
The pandemic has changed the real estate business tremendously, from virtual showings to site unseen buying, from dealing with multiple offers to cancelled contracts and back on the markets, all making it a bit more hectic trying to keep all legalities checked can be challenging.
9. Jose A. Perez, Co-Owner/Broker At Real State Pros (Orlando)
The market is still hot. Inventory is at an all-time low. Market prices continue to have upward pressure due to the demand being higher than the inventory. We have seen prices cool off a bit but there is no “market crash”. If you can buy, do it now. If you want to wait, when the mortgage payment moratorium ends, and lenders finish refinancing or modifying loans, we expect the inventory to increase as people are forced to sell before they get foreclosed. That could be 6 to 12 months from now. Interest rates continue to stay at or near historical lows. Its still a great time to buy. When we do make any offers, we need to be prepared to go in very strong. Recognize that there are going to be multiple offers on the home, and be ready to negotiate up, not down, on price.
With low inventory it’s a great time to sell. A well-staged, priced, and marketed home will sell with multiple offers in a very short time. There are some opportunities to sell to investors and cash buyers but those offers are still 10-20% less than following our Go-To-Market Strategy. This includes marketing, social media, videos, etc. Home staging and decluttering are key to this strategy as well. Of course Professional Photos, Videos, 3-D Tours, Drone are all included in our listing. We don’t cut corners. In this market, the seller will most likely get the best and highest from most buyers. We have less than 30 days of inventory in some areas, and closings are happening in 40-50 days from the listing date. If it’s a cash buyer, we could even close in 30 days or less. Recently we had 28 days to close contract that the lender and us managed to close in 24 days. With a loan. Not everyone is looking to get out quick so we can help you negotiate longer terms if needed.