The Game Changed in 2020. Make Sure Your Team Is Playing By the New Rules.

Buying a home today may feel like real estate Whac-a-Mole; if you’re not poised to strike on a house as soon as it pops up, it’s gone. With current media headlines highlighting the “frenzy,” “mania,” and “hysteria,” of Florida’s residential real estate market, it’s no wonder that both buyers and sellers are entering the market with a certain amount of trepidation. But panic serves no one. It simply feeds the false narrative that buyers must accept whatever they can get, while promising large amounts of cash and offering up their left kidney for a chance at homeownership. It also gives sellers an unfounded bravado in the belief that receiving the “Final and Best” offer within days of a property hitting the market will yield the greatest results. The real estate game has changed, no doubt. But we’re here to wade through the sea of fallacies and lay down the facts to provide strategies that will help you meet your real estate goals in 2021 and 2022.

Trends Affecting Tampa Bay Real Estate

Let’s begin with what is driving the current real estate market in Tampa Bay:

·         Inventory in nearly all price ranges is low, making it an indisputable seller’s market. This past week at My Tampa Agent, we saw a total of 1,507 homes go under contract, while both new listings and homes being placed back on the market lagged behind at 1,161. Buyers outnumber sellers, meaning nearly every home listed is receiving multiple offers.

·         Interest rates remain low, bringing more first-time homebuyers to the market and encouraging current homeowners to invest in more expensive properties.

·         Tampa Bay is also experiencing a very strong rental market. As a result, many homebuyers are holding on to their current properties as rental units, rather than adding them to the inventory of properties for sale. This rental market has also caught the eye of savvy investors who are drawn to Tampa’s low vacancy rates and relative affordability compared to other major markets.

·         COVID-19 caused an unprecedented migration to Florida from more restricted (and expensive) states like New York and California. This influx of new residents is bringing more buyers to an already full table, many of whom come armed with cash offers. However, this trend may lessen as states continue to relax their COVID-related restrictions.

Even though factors like interest rates and government regulations may change, we expect the current market supply and demand to remain consistent for the foreseeable future. This new real estate market means buyers and sellers alike must change the way they approach real estate transactions. A successful outcome is absolutely possible, but you have to be aware of the new set of rules, and play your hand accordingly.

Selling In The 2021/2022 Real Estate Market

Sellers, the market is definitely in your favor; congratulations! But before you pop a bottle of bubbly at the first offer that crosses your threshold, let’s examine how sellers are still getting burned in this hot market.

·         “Final and Best” offers are being demanded by less-savvy realtors within a precariously short amount of time. People are being forced to decide whether or not to make a huge financial investment faster than they have to decide what they want to eat for breakfast. The result is often a slew of offers based on rash buyer decisions, as urgency trumps common sense.

·         Sellers are then faced with canceled contracts and having to start the selling process all over again. In fact, one under-reported statistic that we are seeing (particularly in the past 4 to 5 months), is the number of homes that go under contract, only to immediately come back on the market.

·         Rushing the process and creating a frenzy does NOT yield a higher profit, nor a smoother transaction. In fact, quite often it does just the opposite. Now, more than ever, sellers need to be particularly careful with whom they select to represent them in contract negotiations, even when the transactional power weighs heavily in their favor.

Yes, you can easily sell your property in this market. Yes, you will make money on it. But are you getting the optimal experience in both profitability and ease?

A knowledgeable, accomplished realtor will help you consider and negotiate the nuances of your real estate contract beyond just dollars and cents. You don’t want just any offer, you want the best offer and that comes from bringing quality buyers to the table. We have found the best way to get the most high-caliber buyers is to do the following:

·         Not skimp on the marketing and promotion of your property.

·         Make sure your home is cleaned, staged, and decluttered prior to being placed on the market.

·         Price your home properly and realistically.

·         Create a list of expectations beyond just price, such as how long you would like the closing process to take. Are you looking for a quick turnaround or do you need time to find another place to live?

This is your time to orchestrate what an ideal transaction would look like for you. And the right realtor can make that happen, while helping avoid unnecessary delays and possible legal issues. 

The New Rules of Buying a Home in Tampa Bay

Home buyers, now may be a good time to quote the Dalai Lama, “Choose to be optimistic. It feels better.” Of course, we could add our own spin to that and say “Choose to be realistic. It works better.” Either way, the most important thing to remember in today’s real estate market is that a level head will yield the best results. Currently, buyers place approximately 4.5 offers before going under contract. One of the downsides to that is it can be quite exhausting to find a home that best suits your needs, while preparing an offer that also fits within your narrative, only to have to repeat the process over and over again. The good news is that buyers ARE getting homes if they are persistent and have a solid strategy.

The number one piece of advice from every single realtor on the My Tampa Agent team is to start with a clearly defined budget.

What can you realistically afford? What kind of financing do you have available to you? Do you have cash to bring to the table? We are seeing buyers get caught up in bidding wars, only to realize they cannot actually afford to pay their winning offer. Find a lender that will go to bat for you with the options and flexibility you may need. First time homebuyers should consider conventional loans and not just FHA loans, to create a solid and competitive offer.

What strategies can you employ to help increase your chances of securing an affordable, winning offer? Start by trying to understand the seller’s needs. It doesn’t always boil down to the sale price. Other points to negotiate include:

·         Does the seller needs time to stay in the home after closing?

·         Would they prefer an extended or shortened closing?

·         Will their property will appraise for the asking price and how can you overcome that?

·         Does your contract need some creativity with bringing cash to the table or absorbing closing costs?

Lastly, never ever (and we do mean EVER) waive the inspection of the property you’re buying. This is not a $3 blind bag toy from Target. Buying a home may be the largest investment you have made, or will ever make, and this type of investment warrants scrutiny in all areas.

Unfortunately, there are some rather unscrupulous sellers on the market that are taking advantage of eager buyers who don’t have professional representation. Know exactly what you’re buying or in the end, you may not be able to afford to keep it.

Winning the Real Estate Game

Fast responses are critical to the buyer, agent, and lender in today’s real estate market; indecision results in lost opportunities for everyone. The best thing that both buyers and sellers can do before jumping into the market is to establish some well thought out, clear, realistic expectations and stick to them.

Buyers, have patience and show perseverance. Do your best to evaluate all the transactions from a practical standpoint, rather than making purely emotional decisions. Sellers, try and be patient as you are eagerly awaiting the best offers to come your way and be respectful of all buyers that show an interest in your home.

It’s true that the real estate game has changed, but having the right team around you to coach you through the process can help you win big. And if there’s one thing we love in “Champa Bay,” it’s winning!

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