Our Client Made the NewspaperPosted by Marc Rasmussen on Saturday, October 27th, 2012 at 12:36pm.
There was a very good article in the Sarasota Herald Tribune yesterday by Cynthia Anderson. The articles talks about the bidding wars happening in the Sarasota real estate market. We were fortunate enough to be quoted in the article and one of our clients, Barbara Dunn, was featured.
Real estate bidding wars are making a comeback
Seven or eight. That's how many offers Paul Johnson and his wife made on different Sarasota properties before they finally bid successfully on their three-bedroom, two-bath home on Siesta Key. They got edged out so many times Johnson can't remember the exact number.
The couple started looking in January, having lived in a series of vacation rentals since moving to Sarasota from Minnesota a year earlier. They thought they were in good shape: They were prequalified for a mortgage from a major lender, they had a solid down payment, and they were willing to pay the asking price for the right property.
But again and again the Johnsons lost out — to buyers with cash or those with higher bids. Sometimes they made offers on which they weren't even called back. Eventually they had one accepted — $322,000, the asking price, for the Siesta Key property. "It took us 10 months, but we're finally done," said Johnson.
The Johnsons are not alone. As the market tightens and inventory shrinks, buyers are facing a changing real estate landscape — one in which multiple offers abound and bidding wars are not uncommon.
At DWELL Real Estate, Marc Rasmussen said his agents encounter multiple-offer situations every week. "Some properties receive five to 10 offers within days" of being listed, Rasmussen said.
"Yesterday we had one in Gulf Gate; that home was on the market for one day. Before that there was one in River Strand."
"Multiple offers are the norm right now," said DWELL agent Sharon Straw. "I would say that three out of five offers I write on behalf of my customers fall into that category. There's such pent-up demand and such a backlog of buyers that when a new listing comes on and it's priced right — I don't care if it's $200,000 or $2 million — it's gone."
Other real estate professionals make similar observations. "It's definitely becoming a seller's market," said George Miller, an agent with the Siesta Key branch of Coldwell Banker. Several of Miller's clients have found themselves in multiple-offer situations and bidding wars — most recently one in which the buyer lost out on a one-bedroom condo even after upping her bid.
Although bidding wars are especially common in lower-end properties, all sectors are seeing steepened competition. And multiple offers aren't limited to downtown Sarasota and the keys. In east county, at the Lakewood Ranch branch of Michael Saunders & Company, managing broker Gloria Weed said inventory remains low, even if less tight than in town. "It's happening here, too," she said. "Some properties are getting multiple offers in a matter of days."
The shift in the market has caught many buyers by surprise. "It's an adjustment for people to realize they may have to come in at or above the list price," said Miller. "For the past three years, everyone has been hearing about how it's a buyer's market. That really has changed."
Barbara Dunn, a buyer from North Carolina (see cover), learned first-hand of the change when she came to Sarasota for a week in September so she could work with a real estate agent to locate a property.
"Everything was just flying off the shelf. If you hesitated, it was gone," Dunn said. "I realized I was going to have to be here in person for a period of time to find something."
Dunn returned to Sarasota for the month of October. When she finally found a house she liked, in Gulf Gate Estates, someone had already made an offer on it, and the seller had counter-offered. Then, hearing of Dunn's interest, the seller withdrew his counter. Dunn was in the running. "My Realtor told me, 'Give it your highest and best,'" she said. Dunn offered full price on the $269,000 listing, in cash. The seller verbally accepted her offer, but still held another open house that Sunday.
"I drove by the place three times that day on pins and needles. Thank goodness we finally wrapped it up," Dunn said.
According to Miller, the fact that Dunn is able to pay cash likely enhanced her attractiveness to the seller. "Because the banks are very, very picky about whom they'll lend to, offers with a financing contingency are seen as much less desirable," he said.
Reduced inventory is a major driver of the current multiple-offer trend. The area has seen a decrease in the number of homes for sale; for Sarasota County, Realtor listings for September totaled 3,715, compared with 5,032 in March. New listings dropped, too, from 1,292 in March to 938 in September. According to Miller, the decrease stems in part from sellers holding off on listing their homes or pulling them off the market, probably in hopes that prices will rise.
In addition, a surge in the number of investors who snatch up homes in bulk in all-cash deals has intensified competition. And, as prices continue to remain relatively low, buyers in general are entering the market in greater numbers. The rise in the overall number of buyers combined with reduced inventory means that more buyers are left with fewer options. Hence, bidding wars.
Weed, for her part, remains sanguine about the current frenzy. "We've seen this before. Nothing stays the same," she said. And even if multiple bids make sellers happy, Weed argues that too little inventory ultimately results in frustrated buyers. "The best scenario is a balanced market," she said.
As for Dunn, her closing is next month. She can't wait to move into her home in January. And the Johnsons just called in a pool company to get a quote. "We're very, very happy," Paul Johnson said.
Give us a call at 941.822.0708 if we can help you buy or sell a home in the Sarasota area.
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