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Real Estate News Radio with Rowena Patton
Retiring And Selling In Florida And Moving To North Carolina In Today's Shifting Market
Hey everyone, it's Rowena Patton at the Real Estate News Radio, your friend in real estate, realestatenewsradiocom. I just had a conversation with Alan and Denise, some wonderful buyers that are coming in from Florida, and we took them around a dozen homes yesterday. They have their home for sale in Florida and I was talking to them about the importance of knowing the entire strategy and how it all works. Any agent with experience will do this for you and I'll get on Zoom with you and do it. We did it on Zoom in Florida. They came here, we showed them homes. They're retiring here Very youthful retirees. We can't wait to help them. And they were asking about what was going on with the market in different places and they were a little concerned get this listing agents that their listing agent hadn't asked for a price drop when their house hadn't sold and now it's at 50 days. So it was kind of an interesting conversation and they allowed me to share it with you. So, alan, you had that question. Ask me that question again, just for clarity.
Speaker 2:So we live in Florida and I guess my question is why are they doing so much building there when the price Affordability index and. Affordability is just not your amount.
Speaker 1:So you got a couple of things going on. Let's talk about South Florida, right. So we're talking about South Florida now. What is different about South Florida in terms of who buys homes there, is it? I mean, yes, there's some New Yorkers coming in, there's some Texans coming in, there's some DCers coming in, there's some Virginians coming in. We get that, but what's different about South Florida in terms of the buyer makeup? If you walk down the street in Miami, do you see more Spanish signs or less Spanish signs in the rest of the country?
Speaker 2:I would believe more.
Speaker 1:That's because so many, so much of the money coming into South Florida is from South Americans and wealthy people around the world. At this point, right, it's a market where we bring a lot of buyers from a lot of different places. It's quite unique in that. So we've also had the South Florida issue of the condos, where we had surfside collapse and that sent HOA dues through the roof and all of the new restrictions that have been brought in where the inspections have to go. For Now, just full disclosure here, people who are listening on the radio show, I am not an agent in South Florida, but I did used to live there and I know a lot about what's going on and you two can correct me if I'm wrong here but a lot of new restrictions and laws came in where now any building over two levels so three levels and up in condo buildings have to be inspected and they have to make repairs and that's having special assessments happening, especially on the older buildings that are driving people out of the condos. So a lot of these new buildings that you're seeing going on are condo buildings that don't have those issues, right. So which is actually hindering the problem. But let's talk about nationwide the National Association of Home Builders, which you know is the big association of home builders, have just seen the lowest score in confidence since they started scoring. Home builders and this is nationwide are very unsure about what is happening in the market. When you see you know Clermont-Juglar 1860, 7 to 11 year cycle most of the country crested two years ago. We've just been bumping along the top. Some notable states in the northeast are still having price increases, but for most of the country, specifically Florida and Texas and Arizona are seeing price reductions. Now that's getting everybody a little bit nervous, but it takes a little while to make headlines. So if you look at my, you know I've got a great shift chart on this. We bump along the top and then we go into the first stage, which is denial. Last year we're in denial Like you had celebrity agents going oh, home prices are always going up, don't worry about it. Whereas now you're starting to see headlines oh, this terrible stuff is happening here and terrible stuff is happening there, and people are starting to get the message, which is why we're seeing price cuts through the roof. We're seeing higher level of price cuts than we've seen in a decade or more sometimes in history, since they first started being recorded. Price cuts mean that in a few months those houses will close at a lower level, which is going to push prices down even more. If you're selling now in any of these markets where there's a decline, get out now, especially if you've been sitting for a month.
Speaker 1:Do certified, pre-owned Talk to your agents. Get the inspection. Get the appraisal. Price it just below appraisal. Get two. If you're not happy with it. Slip it in a drawer. If you hate it, keep going. If you can hold it out for 10 years, hold out for 10 years Because Clermont-Jouglas 7 to 11 year cycle. It will most likely be worth more. Does that kind of put it in a nutshell, or do you have any more questions on that?
Speaker 2:No, I think you've answered the question. So the developers, with all the building that they're doing, they're going to have to hold out either 10 years or they're going to have to do the price cuts. I guess that's what I'm taking away from the conversation.
Speaker 1:You are so spot on. So here's the thing You're now going to have think about it. You're coming in from New York because finally you want to retire and get out of New York. Everything that's happening in New York right now, a lot of people don't agree with that. They don't want the grocery stores run by the government and you know the white neighborhoods being taxed and that's a direct quote, obviously, from the new New York mayor that won the primary. So a lot of people you're seeing like it's making headlines right now very prominent people are moving to Florida and a lot of them will move to South Florida. So now they're looking at a luxury condo.
Speaker 1:We've got a lot of condos that are cutting their price, cutting their price, cutting their price because they tend to be older buildings. Even the newer buildings are being hit by this. So there's actually one in Fort Lauderdale that just had a $100,000 assessment. The building's only 10 years old, which is driving people out right Because they can't afford the $100,000. They finally bought their retirement condo. So now people coming in from new york, people coming in from california, people coming in from around the world, because obviously it's a much more international market. Now they've got a choice. They buy a brand new condo that's had a price cut. Because there's so many of them, the market gets flooded. Sometimes builders are still building and they're going, oh, we're fine in our market. Talk to agents around the country like, oh, we're in a special place, nothing will happen. Well, yeah, I'm in a market in Asheville, north Carolina, where they said that. I was also in Miami where they said that it pretty much happens everywhere.
Speaker 1:Slowly but surely now you've got this buyer looking at a brand new condo Everything's brand new and it's more modern inside. Or they're looking at a 20-year-old condo that's had a big price cut. It just depends on where their money is. Now you've got lots of competition. It's simple supply and demand. You know, if you were looking for a house now which of course you are you're looking for a house in the beautiful mountains and you're looking at a house that's been on the market for 300 days. You're going to get that house for a better price most than a house that's been on for seven days. You are most likely looking at a house that's more modern, that's got a more modern, it's natural, a more modernized kitchen, that's got the things that you want right, but generally more modernized and newer is going to win out If there's a much more higher supply. Florida we've doubled the supply in the last couple of years. North Carolina in most markets we've doubled the supply in the last couple of years. North Carolina and most markets we've doubled the supply.
Speaker 1:We've gone into what we call a buyer's market. The buyers have the power. The problem is, the buyers that have the power are normally also selling something right. So you've got to balance the two out and just strategize between them. But it's not all bad news. The bad news is we lost 84% of agents last year because they saw this coming and they were struggling and didn't know what to do.
Speaker 1:There are lots of things you can do. If you're selling, get out now. What I mean by that? Don't just drop the price and you know. Get out and oh, run for the hills. Oh, we're in the hills actually. So that works well. Make sure you're certified pre-owned. Get the inspection, get the appraisal, talk to your agent there. Have me talk to them if you need to.
Speaker 1:Certified pre-owned has been around for 40 years with cars. Every dealership has them. Most people would prefer to buy a certified pre-owned car, pay 10% more for it, because we don't want to buy an $80,000 lemon off Craigslist or not that they're all lemons, sorry't sue me craigslist or facebook marketplace. We prefer to buy that. I brought this to the market in 2007. I have a best-selling book on it. It works. Any buyer would rather buy a certified pre-owned house. Any buyer's agent that's running around you tell me, katie, you were running around 12 houses yesterday. What would you be suggesting to your clients that we're talking to right now if two of those houses were certified pre-owned? Wouldn't that? I mean Alan and Denise, you can tell me too? Wouldn't you sway more to those houses that were certified pre-owned?
Speaker 2:Sure, definitely, definitely.
Speaker 1:Of course. So let's get your house certified pre-owned Now it makes sense as a buyer. Your perception as buyers would be the same as anywhere else and katie's run around showing me 12 houses and another few today. It would be natural for any buyer's agent to get. It's the right thing to do for your, for you as the buyer, because she's protecting you as the buyer. Getting to into a home that's already been inspected. You know you're getting into a home of a decent value. Maybe it was an agent that started a week ago, or their sister or a friend that just got the real estate license.
Speaker 1:I'm not knocking anyone. I'm just saying obviously some people have more experience than others. I know there's a lot of agents out there that sit down with sellers and the seller says I want 750. And they go well, we think it's only worth 720. Well, I want 750. They're scared of losing the listing, so they list it as 750. It's called buying the listing. We have a term for it. It's called buying the listing. And then a month later they'll come back and say you've had no showings, we need to reduce the price because they want the listing. They're scared of losing it, right? So when you make sure you've got a great agent out there that tells you the truth based on facts, not just their opinion, because their opinion is oh, I've got this handful of listings and this is what's happening and I'm a great agent that sells lots of homes for the last 10 years.
Speaker 1:Whatever it is, markets change all the time. It's not about what I sell as an agent, it's about what the market is doing. What are the price cuts going on in that market? Is it now 40% instead of 20% a year ago? That shows nervousness in the market from the sellers. That means as a buyer, you can get a great deal and, thank goodness, you guys are buying right and you're buying a bit less. So you're going to be dollars in and you're moving a market where it tends to go down a little bit less. I hope I answered your questions on the builder side. Do you have any more questions for me on, like, the intricacies of how this all works? Do you feel like you'll take anything away from this that you'll?
Speaker 2:you know. Yes, definitely, We've taken a lot of a lot away. Speaking with you is very educational. I wish our realtor back home would go into that much detail and, like you say, it sounds like they just are buying the listing, not really giving us a good breakdown on. The CPO was never brought up and a few things haven't brought up. But we will definitely meet with them when we get back and discuss things in that nature.
Speaker 1:My sellers are educating their listing agents. I love it. Here's the thing. So they weren't necessarily buying the listing. They were in the mindset of a year or two years ago. Two years ago, we were still getting multiple offers in Fort Lauderdale. You're in a beautiful area, still getting multiple offers in Fort Lauderdale. You're in a beautiful area. You know everybody wants to move there. You've got a fantastic house, fantastic lot. A lot of agents got in. If you got in in the last 10 years as an agent, think about this for psychology. All you've done is put a sign out, done great pictures, drones and put a lockbox on, put it on the MLS and it sells. You've not learned in the down market. So I advise anybody that's listening to this have an agent that got their license in 2006, 2007. They experienced that down market. They know what to do.
Speaker 1:Serp Strategic Incremental Reduction Plan reduce it $100 a week. Everybody out there is going is she nuts? It scoots out on the searches. It keeps it fresh, right and one of the partners the husband or the wife, or the husband, husband, wife and wife, whatever the makeup is doesn't care that it only dropped hundred dollars. It's scooting it out in the search again and keeping it front of mind.
Speaker 1:There's one make sure if you haven't had x showings, your agent can tell you. Your agents, when they listed it at that price, by the way, they should have said, have said to you if you don't have X showings and it's probably, you know, I don't know four showings in the first month, they'll know by what's happening in their market. Maybe it's six showings, maybe it's 10 showings. If we have an open house, we don't get 20 people through. Whatever it is, I want you to, that's what I would say to you. I want the two of you to agree to drop it by 5%, 2%, whatever it is. I want us to do a drop for the increment. So if you, let's say, you happen to be at 750, drop it 25 because it drops you into the next category. And then, on the MLS, say, $10,000 below appraisal. That was the magic thing I did. Okay, so between 2008, between 2012, 2015, at the bottom, I doubled my volume every single year. I'm not bragging here, I'm just telling you because these things work right. I was the rookie of the year, didn't know what I was doing for the biggest international firm at the time internationally. And I didn't know what I was doing because I was doing things differently. You've got to do things differently in this market. I want everyone to hear that.
Speaker 1:So, as a seller, get it certified, pre-owned. If your agents won't do it, first of all get a different agent. But you know, find a CPO agent. I can help you with that. Get your appraisal, get your inspection. In fact, before you sit down and interview agents, it wouldn't be a bad idea to do that because at the end of the day, you're paying for it right, because you're getting an accurate measurement as well. You're getting a floor plan from the appraisal. Is it a snapshot? Yes, but that's a whole different discussion. Put priced below, list it just below appraisal, even if it's $1,000, put price below appraisal. Ding, ding, ding. We all look at it as human beings and it says sale. Think about Black Friday. They're silly sales, but it just makes you want to go look right and then do the inspection.
Speaker 1:You don't have to fix everything on the inspection. If it's something serious, what we call a material fact, disclose it. If you've got money, have a handy person come in and most states you can do that. They don't need to be licensed. Maybe you're're handy. Put the cork behind the sink that's missing, fix the, the hinge on the kitchen cabinet that's not working. Quite right, inspectors have to earn their money.
Speaker 1:40 to 60 items on the inspector report, 60 page report. That's why they drop out a third of the time. Cpo reduces it to seven percent. It'll cost you about 1200 bucks to do the whole mccoy unless you've got wells and set ticket and all that good stuff, massive insurance policy. The average buyer, especially in this market, three to five percent. They're going to ask you when you're under contract with them for repairs because they've got this 50 page report. Put it right up front don't get under contract until your listing agent sends that. They're going to send you a contract signed.
Speaker 1:Get your listing agent to send them the inspection report to the buyers and say, listen, we took this into account when we priced the house, so we want your buyers to look at this. In 3,500 transactions I've had one pull out. You want them to pull out if they're going to, because you don't want them to be the 32 percent that pull out due to the inspection and appraisal, primarily when you're under contract. Why stigmatize listing? You do not want to stigmatize listing. Drives the price down.
Speaker 1:Everybody calls me and says what's wrong with that house? My buyers really wanted it, or the buyers call us. What's wrong with that house? We see it fell out. We were watching it for a while. We couldn't sell our house in New York, florida, wherever it is. Now we've sold it and we saw it dropped out and it's back on. We're really interested. But what's wrong with it? It's natural, and make sure your price drops are in place.
Speaker 1:Talk to your agents. Like, how many showings should I be seeing? If they're experienced, they'll know. There's a reason we lost 84% of agents last year. Reason we lost 84% of agents last year. That's crazy. We lose agents because they're struggling.
Speaker 1:It's hard out there, right? They're struggling. You've got to pay a lot of money for photos and all that good stuff. Just because you were selling all the homes two years ago doesn't mean to say you're selling them now. It's different. So just make sure you've got an agent with experience. Thank you guys so much for allowing us to capture that today and help other people in there. What would you say to people that are selling the house out there? Tell them all. So this is Denise and Al. We're not going to give their last names so you can stalk them or anything? What would you say to sellers out there having heard this today? Well, definitely take advantage of the certified, pre-owned From Florida. I've never heard of it. You've educated us and it all makes so much sense. When we get back down to Florida, we're going to do the same.
Speaker 2:Yeah.
Speaker 1:And we discussed earlier that if you were looking so you looked at 12,. You're going to look at another couple here today. You'll have looked at about 14. If two of those were equal to all the others or you know, somewhere in the you've got four that you're looking at that you really like If two of them were certified pre-owned, which would you be more likely to put the offering on? Well, definitely the one that's CPO. It's a no-brainer, right. Which means that seller would have spent $1,200. Or even just, if you're tight on money, just get the inspection. Sellers Like it's $400 to $600, depending where you are in the country. Just get the inspection. Because you just heard it from the home sellers here that are going to CPO their home and how they would prefer a CPO home. It's a no-brainer. Once you've heard it, you can't unhear it. Thanks, guys.
Speaker 2:You're welcome, thank you, thank you Thank you.
