The South Florida real- estate market is continually changing. Even real estate gurus can’t predict some significant changes. For that reason, it is essential to study and analyse the market before you decide to sell your home in South Florida.
The real estate market is influenced by many things in the economy, mainly by supply and demand. We can describe where the real estate market is at by two the use of two terms: the seller’s market and the buyer’s market.
The first one is when the properties are selling quickly, also known as a “hot” market. This state of the market is most beneficial to property owners who are selling. It’s when more people are buying, investing, and owning houses. On the other side, there aren’t many properties to buy. In this case, demand exceeds the supply, which pushes the prices to go up. In this situation, it’s more probable to sell a house at a high price.
On the opposite, a “buyer’s market” is when people are selling their houses, but there aren’t many buyers. As prices go down due to an excess of supply, it’s a good time to buy a property.
When people are selling, they wait for a market shift to be able to sell at a higher price. However, as it is hard to make exact predictions about the real estate market, it might be too risky. You can’t be sure if the market will go in the opposite direction or continue being as it is. Things sometimes even get worse, and people end up buying or selling unwillingly. This scenario happens very often; therefore, waiting for a market shift may not be your best option.
Selling with a realtor: Good or Bad?
What determines whether you should connect with a realtor or not when selling, is the type of property. If your house needs to be fixed and repaired, then a realtor may not be the fastest and cheapest way to sell your South Florida home.
Distressed properties are usually sold to wholesalers or cash buyers because banks don’t approve the financing of a mortgage on a house that needs fixing. Banks see distressed homes as inhabitable. Therefore you can’t loan money against them.
If you wish to sell a distressed property, consider using other means than realtors. They are people whose specialty is to find cash buyers to buy your distressed property. They can buy your house or sell it fast and efficiently to an investor. It’s possible to get an offer within 24 hours.
However, using a realtor might do you good if your property meets the market standards as it is time-consuming to find a wholesaler or investor who will buy directly from you without the realtor’s commission.
A. Using a realtor to sell your house :
A realtor is a real estate professional who is federally registered at the NATIONAL ASSOCIATION OF REALTORS. It is necessary to have a high school diploma and a license by the state for which you study 63 hours and pass an exam. Realtors are usually not highly experienced individuals as it is easy to become a realtor even if you have never worked in real-estate.
Realtors usually work under brokers. The realtor’s commission goes to the employer first, who then cut a share for the realtor.
However, some realtors have been in the market for so long. They know a lot about real estate and have been part of many deals over the years. This type of realtor can sell your house without any unnecessary additional costs.
The realtor’s r commission depends on the price of the sold property. Even though realtors have to commit to the Code of Ethics strictly, it is only fair to question their intentions when the commission is high.
Realtors are always required to put the customer and what best for him first. However, it would be hard not to think that the realtor will try to close the deal fast to get paid.
Some people prefer selling without a realtor to avoid the 6% commission. Half of it goes to the realtor who listed the house, and the other 3 % goes to the one who sold it. If the realtor who listed the house sold it as well, he takes the full 6%.
Also, Realtors use a marketing tool called The MLS (multiple listing system). When a realtor lists a house in the MLS, many realtors have buyers.
Only a few realtors spend time finding other marketing tools to locate a buyer for your home. For 3-6%, it is a good deal for you.
Mistakes made by realtors:
Some realtors commit mistakes that drive away buyers, such as listing your house at a price higher than the market price. This mistake may cost you a lot of money. If your South Florida home sits as a listing for a year, you’re going to have to pay taxes, insurance, and HOA’s.
Potential buyers will notice that your property has been on the market for quite some time, and will assume that there is something wrong with it. The more time your home spends as a listing, the fewer buyers it attracts. Usually, the realtor will ask you to sign an agreement of a sale listing that forbids you from using any other channel to sell your house.
Even if it’s illegal, some realtors will try to get the full commission and not present you with some deals that came through other realtors.
However, most realtors are professionals who are good at their jobs even if they make mistakes. They will list your house and sell it in a short period.
B- Selling your house without a realtor :
To keep the full sale price for themselves, many owners don’t use any realtors to sell their South Florida homes. You would often find “For sale by owner sites” or FSBO in the yard. FSBO is very popular as many people try to get the highest value of their house.
However, that might be against the seller’s benefit as the potential buyers will know that you are keeping the full price for yourself; therefore, negotiate for a bargain or a discount. You will end up with less money than what you would have gotten using a realtor.
However, if you are lucky enough to get the interest of a family who wants to move in the area and saw your property at a website, the FSBO sign would be useful.
In real estate, a wholesaler is a person with influential buyers lists along with impeccable marketing skills. As they work with investors, they can market your house to a large number of investors. A wholesaler will sell your South Florida home as quickly as possible. It is also a great channel to use if you are trying to sell a distressed house on which the bank won’t finance a mortgage for buyers.
The Pros and Cons of using a wholesaler:
Wholesalers are the intermediate between you, the seller, and the investor. In a hot market, investors are looking for opportunities all the time. Investors are craving for investment properties. It can go two different ways, the wholesaler can buy your house directly from you and sell it at a profit, or he would put it under contract with an investor.
If the latter is the case, the wholesaler will assign it to the investor for a higher price than what he gave you than the price he paid you. Wholesalers make a living by using their connections and channels to find a buyer for you. However, wholesalers are independent, you don’t hire, nor pay them.
Wholesalers will try to buy your house at the lowest price and resell at the highest to leave a margin for the investor to make a profit.
When you are trying to sell your South Florida home fast, let’s say you can’t afford the expenses or need to move out of the state; using a wholesaler is the right path for you. They will sell your house fast and not let it sit in the market for too long.
With the right marketing skills, wholesalers can even make 2000$ a house. If you choose to give them the option to assign it to an investor, it would be a win-win situation as they can withdraw the offer if they can’t find any buyers.