The Florida Keys is now a Buyer's Market...Sellers are competing for buyers with more inventory than buyers buying at this time.
Pricing in a Buyer's Market with a Large Volume of Distressed Properties: A buyer's market occurs when there is more inventory for sale than the number of buyers to absorb that inventory. When you add the distressed properties to that inventory you get a market value based on motivation of the seller not the value of the property. In the past distressed properties were not used as comparables for appraisal purposes, now they are such a big part of the market they are considered and directly effect the value of all properties.
Pricing is key to selling in a buyer's market. Historically, agents priced property within the range of the larger bell shaped curve based on other comparable properties. Example: a home is valued at $100,000 would have a range for the price of $90,000 to $125,000 (low - 90, medium - 100, high - 125). More motivated sellers would typically list in the low to medium range to have their price more appealing to buyers based on homes of lesser value. Seller's listing in the medium to high range usually want to test the market and see if they can get more for their home.
Today our market is about motivation more than value: The more motivated the seller, the lower the price. The lower prices of sold properties, distressed or not, directly effect the value of all other comparable properties.
Distressed Property Owner Motivation Perspective:
It's important to understand seller motivation when buying or selling in this market.
Each and every sale involves the unique circumstances of the seller. If a seller must sell and they owe more on their property than it is worth, they are considering many consequences which might be: The effect on their credit, deficiency judgement (s), where they are going to live, if they can modify their loan, will the lender approve their short sale, etc. Most seller motivation is an evolution of their circumstances based on many variables they may or may not control. "I make every effort to help sellers understand their options and make informed decisions based on the consequences and outcome of the path they choose and hardships they are facing."
Homeowner living in the property: If you must sell you should price your property in the lower side of the range of pricing to move it quickly. We are still in a declining market and a poorly priced house delays a sale and increases the chance of an even lower price and higher resulting deficiency. Homeowners also have the benefit of selling with little to no tax or deficiency consequences. Click here for more details.
Folks selling their homes that reside in them have little consequence for a deficiency than someone that has an investment property. Both are considered the same for appraisal purposes. This sale that happens at the low end effects the value of all properties. Lenders would prefer to have the seller stay in the property and care for it even if they are not making payments. Maintaining the property helps to maintain the value.
Vacant property: Typically, if a property is vacant, the lender will take over the property to protect their interest, change the locks, cover the pool if applicable and secure the premises. If the property is for sale the lender works with us to keep it on the market for sale and provides keys for access.
Investment Properties, Subordinate Loans or Second Homes: If the property is not a primary residence or has subordinate loans other considerations need to be made regarding the deficiency.
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