Super Hero To The Rescue...I have a CMA to Prove it!
Sellers want offers that make some sense. Truth is, all offers are painful these days to most sellers because we are in our the 5th year of a prolonged downturn in real estate prices in Florida. CMA's (comparable market analysis) don't always tell the real story. They don't take into account where prices are heading (higher or lower) and often fail to accurately compare lots sizes, kitchens, appliances, and other improvements. Homes are not sold by price per square foot alone.
Back in 2006, our flat fee MLS listing company (I am the broker) sold a home in Seminole, Florida. About a month after it closed, an appraiser called me and wanted to know if the sale was a fire-sale because it appeared to him that my seller sold $20,000 under market. Well, smart seller he was because his sale was likely they highest sale in all Seminole after that as the market continued south and hasn't turned back. But, this seller wanted to sell because he had another place to go. Did the appraiser know this?
I love my job as a Professional Realtor Messenger because my business model lends itself to just that role. I work as a transaction flat fee MLS broker most of the time and offer my advice rather freely everyday to even fellow Realtors. I remind them as they are negotiating with me that I am the messenger and so are you...Now, let's go forward.
One thing I find NOT a pleasure is the CMA Super Heroes that make offers based on all closed sales as if this analysis is the holy-grail of how to close a deal. I feel our job is to educate, protect, offer advice and most of all, reassure buyers that it is OK to make an offer that keeps the door open and possibly one that seller may take. Is there any urgency to a sale these days? What if you miss the deal because some other smart Realtor or buyer beat you to punch!
I find Realtors that are too reliant on CMA analysis as their mode of initiating an offer are not in the business of selling homes and closing deals. What happened to the buyer that has their own opinion of value. Once a buyer has seen 5 homes, they do have an idea of what value is and what it is not. What if the buyer says, "based on what I have seen, I feel $430,000 is a good offer." What would you say then? "Well, sounds good but let me do a CMA and see if my Super Hero CMA Report supports your wishes because if we offer too much and the appraisal falls short, we will have to renegotiate with the seller."
Remember the days of paying more the ask price just to get a home. Of course, I know the market was going up then and even if a buyer over-paid a bit prices would soon catch-up and everyone would be happy. Now that prices are in the gutter (and maybe heading lower) because bank-owns and short-sales dictate appraisal, we as Realtors have to low-ball the CMA. Are we over-stepping what we are doing here? Shouldn't the buyer and then the appraiser decide if value is there and if not, the door is still wide-open to renegotiate with the seller. As a bonus, the bad guy is the appraiser and not the buyer!
I guess it's a battle. Value to a buyer is based on perception. The seller is in a life-struggle to re-group and move forward. The Realtor sees value through a CMA and the appraiser is just reporting yesterday's news.
In my last 50 deals representing sellers I have not received one full-price offer. But, when I sold a home last month in Tampa, I suggested to my buyer that this home was worth full-price. I knew the seller was very knowledgeable about value and happened to be a Realtor. But, it was a re-sale from a Realtor that was doing a flip of sorts and wanted out. My analysis was it wasn't worth trying to save $10,000 and miss this home. There were no homes that were comparable and it was priced right based on what we had seen. I was a professional messenger and supported the deal from the perspective of the needs of my buyer and what I (we) felt was a good deal.
Was I wrong? I say if more Realtors talked up Florida real estate and had a little urgency to their story, the Florida real estate market's downturn would end sooner.
I like selling homes. I like buyers and sellers. But, I like being the professional messenger better. Most buyers today are well educated because of the Internet. The last 10 homes I sold were brought to me by buyers on my website getmoreoffers.com. They liked my positive attitude on the phone, my professional demeanor once they meet me and likely appreciated my positive attitude about real estate. Though I have to admit, I am an order taker and tend to be a Realtor Cheerleader more than a Realtor Super CMA Hero. Oh well.
Keith Gordon 1-727 942-2929 or 1-877-232-9695
website: getmoreoffers.com, a Florida Flat Fee MLS Listing Service