Selling A Home In Miami Beach; Traditional Pricing vs. Traffic Approach.
“I don’t want to give it away!” This is occasionally the response heard when honest property values seem far too low from the seller’s perspective. When selling your Miami Beach Home, if you interview 3 sales associates, there’s always 1 who doesn’t know the market or didn’t do their homework or both.
These associates will spend countless hours of wasted time (yours & theirs) relaying smoke & mirrors on something overpriced, not even on the playing field.
What’s it take in today’s Miami Beach buyer’s market?
The right price…
We currently have a pricing WAR and a beauty pageant all rolled into one. That’s right, a WAR to sell. It’s you against the bank-owned steals and or the motivated who must sell today. We’re dealing with an average of 36 months of inventory! When the market was geared for sellers in 2002, 2003, 2004 & 2005, it was common to base the asking price on what recently sold with an increased value from the previous sale price.
For instance, if your neighbor’s Miami Beach Condo sold for $500K, then yours was worth $515K, right!? How easy that was, and it sold fast! We were holding 20 to 30%+ as strong appreciation each year. Not anymore, as the market has depreciated 35% along the Miami Dade Beaches since the peak in 2005. Now, when the current neighbor’s property has just sold for $500K, it’s a hard pill to swallow when yours might only be worth $485K.
So what’s the right price…
So how about pricing it at $550K and waiting for an offer? Well, this is still a frequent “old school” strategy used by many sellers and not very effective in a strong buyer’s market. You can have your property on the market, yet not in the market. This is where many disgruntled sellers are sitting and or chasing property values. I AM GUILTY of working on overpriced listings with the traditional pricing approach. It’s the “20 zone or 1%ile” where you better be with your pricing. With so much inventory, today’s savvy buyers don’t care to see overpriced (they’re abundant) Miami Beach condos. They are seeing the good Miami Beach Condo deals and making cash offers.
BUYERS, be informed that the Miami Beaches condo market average Sale to List Price Ratio is at 90% of the list price… and “Steals” do not win the race with lowball offers. They just don’t. Reviewing many Miami Beach condo “deals,” I’ve seen the Sale to List at a very rare 25% of the list, yet with a “steal,” to play the game, it’s 15% off the list max, and there is probably another superior cash offer just around the corner.
YES, the Investors are again actively pursuing & acquiring Miami Beach property Deals & Steals. I just noted a loft at Bay View Lofts which is now under contract for around $250K and was valued by Dade County in 2008 at $616K i.e.) “steal!!” The REO asking price was slowly reduced from $367K to $279K, and it’s an obvious no-brainer Miami Beach “steal.”
Rental Income actually hits the investment mark at attractive numbers (approximately $2,100) monthly. PS. Purchased in OCT 2006 at $705K, YES!
Selling A Home; Traditional Pricing vs. Traffic Approach
So what is this post about already?
It’s about the most effective, tried & true strategy to show you results, and it’s The “Traffic” Approach. Take notes as you simply price it where the market direction is headed and, of course, in a superior position with the active competition. It’s that easy, and the goal is setting the initial real estate buzz, getting ample foot “traffic” within the first 2 weeks, and ultimately, multiple offers.
Multiple Offers!!?? In this market…? YES. You price it right the first day, and not only is the sale fast (see STATS below) & stressful free but there are likely to be multiple cash offers with no conditions and smooth sailing. I just sold a “deal” at Barbizon Beach Club (530 Ocean Drive) within 2 weeks from start to finish.
Did you give it away?
No, but it was priced “in the market,” and the cash offer came in within 4 days and sold at 14% of the list (SP/LP Ratio). BAM! Happy Seller with $100K as profit (before Uncle Sam’s 15% ). Today’s vultures know values. They are watching this Miami Beach real estate market closely, and if the price is right, make offers. Job done right, and it’s all about the price with the condition in second.
SELLERS, Quit chasing the market down like a slinky down the stairs! Here are the interesting facts to let marinate… In looking at MLS closed sales from the last 90 days (Criteria: Collins Avenue, Sunny Isles to South Beach Oceanfront), we see 120 sales occurring. Out of these 120 sales, there were 31 which sold in less than 60 days. The average Sale to List Price Ratio of 91.89% (Averaged 29 Days On the Market).
Out of those 31, only 3 had price reductions! Meaning they were priced to sell and sold fast. This doesn’t mean they were given away but simply met the market value for the property. Here’s the flip side to these STATS, there were 12 that sold after being on the market for over 1 year. They had an average Sale to List Price Ratio of 80% (Averaged 487 Days On the Market)!
Quick playing games with your money and carry these hefty monthly expenses. It doesn’t add up to “test” your values with smoke & mirrors! However, I welcome any feedback as long as it’s constructive and related. Have a different perspective or want to add to the message… Please, you are invited to comment!
Operating Wisely In A Down Market
Thinking of selling and still having equity? Let’s go before the capital gains tax doubles and increases next year. Today is the time & there is no better time than today! Warren Buffet said this… “Be scared when everyone is greedy, and be brave when everyone is scared”
Thinking of Buying and having cash? I’ll be creating a new “30 Best” Page soon to showcase the best 30 condos I’ve studied and are positioned to sell within the first few months (Market Average DOM =130). If you’d like to receive the latest local real estate news via blog postings & updates, you can easily be notified by RSS feed (see upper left column) or by email above every time a new posting occurs. Have a great week, and call any time toll-free at 1.888.383.7326 or contact me here.