Hello Naples Friends!
Since my last post, it’s been a while leaving many of you to wonder if I’m lounging on a beach chair or crushing sales in this amazing luxury Naples real estate market. I’ve been in it to win it this year. Today, I’m catching you up on the 10 things you need to know about Naples real estate and what it means for you if you’re buying and/or selling this year.
For the first time in my real estate career, I traversed heavily breathing through the past several weeks. What the heck is that? Do I have a heart problem? Is it anxiety? It’s exasperation. In all my life, I’ve always been able to check myself by questioning my level of activity by asking this question, “Have I ever been busier?” I’ve always been able to refer back to my college days when I went to school and worked full time. I’ve never been able to say, “I’m busier” until this season.
I’ve been functioning at peak performance, working overtime while keeping my 11-year-old on an even and productive keel. Let me tell you. He has had to buckle down and perform past his age level on several occasions. Three cheers for Austin for being a stand-up kid and helping his mom during this extraordinary time!
Sellers alike were expecting uncustomary service. While we were happy and enthusiastic to accommodate, Canadian sellers weren’t coming down due to Covid constraints and tasking us to put their homes and condos in showing and ready condition and selling. They tasked us again to find resources to sort, pack and either ship or store their most prized possessions in the process. We made it happen while capturing fabulous contracts and sales numbers in the process.
Meanwhile, buyers were hitting us at a record pace with all sorts of requests and demands. Phew… For all of those who really wanted to make it happen. We performed. For those who were less willing, we didn’t. Here’s why: The market is electrifying hot right now. Emotional buyers are winning almost everything. Buyers who have been watching for a while who want things to happen for them now are winning.
Those who aren’t winning are looking at last year’s numbers and expecting to strike similar deals. We even have a small percentage of folks who are asking for foreclosures and investment deals. You’ll get your day because everything of value trends high and low but today is not your day.
Investors take note: If you think you’re going to cash flow your 2nd home while enjoying the season in your property yourself, prepare to be disappointed. Your buddy who bought an investment here is going to lose his head when the market turns. The rental market is only as strong as the real estate market. Ask Brett Batten with the Naples Daily News, who likes to hang all REALTORS out to dry when the market turns. You heard it here first.
Due to the explosive sales this season, I see some old negotiating tricks. Some of these are tactics we Neapolitans agents reserve for only our highest peak markets. Here are a few:
Fewer Due Diligence Periods
In less active markets, this is the term of preference for buyers. It gives them a 15 day *free look to determine property condition and a wide variety of other things. Last year we used this due diligence period so buyers could hustle down to see what they bought after negotiating sight-unseen deals. This type of contract term is getting harder to negotiate and, in some cases, impossible. This makes it more difficult if you’re uncomfortable with purchasing from afar.
Instead of expecting free look periods, take that shot and venture down for yourself if there are enough properties to see. Look before you book. Many people expect that one great listing is going to wait around for them. It probably won’t be here, especially if it just hit the market. Many properties are selling within the first day and hours when it hits. We do have some ways of protecting you if you are in this situation. Ask me how.
Slimming down inspection periods
Many sellers attempt to shorten the distance between a negotiated offer and repair requests to get down to business with the least amount of off-market time possible. This can be ultra-challenging as the best inspectors are booked out. It can also make it very difficult to get vendors in to get estimates. This means a buyer’s only recourse may be to ask the Seller to perform remediation and fix issues. This puts the burden on the seller and seller’s agents to perform before closing. Is it wise to go this route? It depends on the property type. Ask me why and where your property falls if you’re planning to hit the market.
Multiple Offers To Sway Property Condition Issues
Some agents like to get that 2nd and 3rd offer accepted, so when repair requests come in, the seller can afford the right to say “no” in hopes of pushing the first buyer to terminate. My buyers have won 1st place position for this tactic. Buyers, beware about letting emotions boil over before terminating if you really like the property. It’s not a ploy. It’s a good tactic where sometimes the seller and the second buyer win. Want to know the best route to go if you find yourself in this situation? Call me.
We unintentionally startled several agents this year when we offered a property with “cash only” terms. I lost count of how many offers we received with finance contingencies. Why? Because new agents don’t know it’s actually a notation in MLS. In more tame markets, almost every listing in MLS is offered as “Buyer finance” or “Cash.” We chose to go the all-cash route because we knew we could get it. Save the flowery cover letters describing how much the buyer wants the property. In some cases, if financing is a question, it’s not the answer and these poor buyers and agents wasted an enormous amount of time by not reading the important details like, the seller is only accepting cash on this property.
These are used in competing scenarios where a buyer will add a term that states something like, “Offer price is up to 5% higher than the highest offer received up to “x” amount. My attorney grimaced when he heard it because it simply illustrates a new high for demand in Naples. For a few savvy buyers, it took the guesswork out of “how do we win this property?”
Highest and Best Offers
This tactic is used when a seller is expecting several offers within a short period of time. The listing agent will launch “a highest and best” request with all offers needing to be submitted on a specific day and time. I had a buyer earlier this year who wasn’t at all enthusiastic about participating. This response is something that happens quite regularly here. There’s always a risk when communicating a competition with a buyer because some buyers won’t play the game, and others don’t believe it’s actually happening.
More buyers were willing to compete this year, and that’s why so many properties have sold for more than ask. Keep in mind not every seller is interested in going this route. We also had a seller who was not at all interested in negotiating this way. They preferred to handle their negotiations on a first-come, first-serve basis. It didn’t prevent them from getting over ask anyway.
Speaking of agents who have never needed to read or understand certain sections of data in MLS, there is an overwhelming percentage of Naples real estate agents who have never experienced a market like this. They are getting annihilated with their advice on how to secure properties for their buyers. Buyers are losing deals all over town because these agents fail at negotiating because they only have their own minimal experience to draw from
The last time we saw a market like this was as late as 2006. That means an agent can have 15 years of experience and still not know what is going on. If you happen to be one of them, the best thing you can do is ask your Broker and/or icons in the local industry how you can combat this market to help your buyers. I’ve been hearing from buyers who have failed on one or two occasions and have opted to part ways with their inexperienced agents. Need someone who can maneuver swiftly through a successful closing? Call me.
New High Rise Inventory
Naples Beach Club
The Naples Beach Club has officially launched its sales campaign, and the only thing more exhilarating than the number of reservations taken (40 at last check) are the prices! The most overwhelming for me is the $75,000,000 penthouse which is already reserved, coming in at an extraordinary price of $4,874/foot. If that’s a little too much for your budget, at last check, there’s still a 2+den for sale for as low as $6,000,000. If you have a serious interest in the project, call me to chat directly with the sales team via zoom conference.
One Naples received approval to move forward on their multi-building high-rise and mid-rise project on March 1st. This approval goes to show you; it doesn’t matter how many entities the public forms. Angry crowd voices aren’t always heard here in Collier County. An official sales launch hasn’t happened yet, but it is well on its way. This development located at the corner of Vanderbilt Beach Rd. and Gulf Shore Drive is about to change the Naples landscape forever. It will likely catapult this North Naples location into a more swanky Neapolitan way of life.
The Ritz Carlton Project
As a few of you know, the Ritz Carlton on the beach is planning a major addition. Once rumored to be residences, my latest source says while the construction will convene as early as May 2021, all that dust and noise will result in hotel suites instead of a residential high-rise. Personally, I think it’s a brilliant move for the Ritz Carlton since so many beachfront hotel units are going away with the Naples Beach Club project.
What’s On The Horizon?
Based on what I see online, we are set for a hectic post-season. That timeline is April through May for the new kids thinking about Naples real estate. I’m seeing some traffic increases at Shannon.com compared to the week before and a dramatic increase in traffic compared to last year. Rumors of people planning on capturing post-season deals (customarily a real thing) could be in a for a shock when it comes to choices and prices. The good news is, you probably won’t be competing with as many buyers as those who purchased the first 3 months of the year, and there will be pockets of areas where you should be able to command better pricing compared to those who purchased last month.<
Outdated luxury high-rise condos are a big area of opportunity. The window is closing for those who want to have their places remodeled for next season as the best contractors are already booked, and construction timelines are looming right around the corner. This will make some luxury high-rise owners pucker a bit as many have already missed the lion share of the prospect base of gung ho buyers who are enthusiastic about making major renovations. Some prices have already dropped ever so slightly, but you can expect more very soon. If you’re in the market for a Naples luxury high-rise condo, I’ve got intelligence you’re going to want to hear.
Still Waiting For Property?
I’ve been bird-dogging for a few successful clients this year who have been able to purchase with a little magic and inside intel successfully. Signing up for new property notifications is not enough today as many properties are going under contract within short market times. Your best bet is to reach out to me directly so I can call you the moment I know about it, which doesn’t necessarily mean the moment it hits the market.
Overshooting the number
Some sellers/agents are overshooting the market. While the number of overpriced listings is relatively small at this time, you’ll want to keep your eye on these. Some will sell, proven by the number of properties that have already closed, but others will sit, and that’s when sellers have to come to grips with their motivation to sell.
When a seller’s motivation ends up being more powerful than the price objective, you can better identify opportunities. Substantial price drops can occur. This typically happens at the end of the season or can span over several years. One of the questions I’m always asked when it comes to these types of properties is, “Why would a seller be ok with being on the market that long?” If you’re not getting showings, you’re not inconvenienced. If you’re not in residence, you’re not inconvenienced, and you can always use the property during the season and disallow showings when you are inconvenienced. Sounds persnickety, right?
Not every deal ends up the same way, though, and those of us who are active in the market tend to know who is tight on their price and who wants to sell within a season or by the end of the year. There are times when back door negotiations occur, and we often see these properties sell for considerably less than the price they were marketed. This causes the group of buyers who missed it to complain that had they known the seller would’ve accepted that number, they would’ve bought it. There’s a way to avoid missing. Call me.
Hey Big Spender
Some of you are waltzing into Naples, touting you have the cash to handle your purchase. We love cash, and highly liquid cash buyers love Naples. It’s truly a match made in paradise. Just know, most of the people walking around town are planning to negotiate the same way on this hallowed land of ours.
Not a cash buyer? Have ALL YOUR DUCKS in a row before making that offer and massive assurances you’ll be able to perform without a hitch. It could be you won’t get your deal done without at least “appearing to be all cash,” which means being able to perform on time even if that appraisal doesn’t come in as you hope. Need direction? Let me know, and I’ll connect you with a stellar team.
On A More Humble Note!
Last week I was named the #1 single-agent out of approximately 600 John R. Wood agents during our 2020 awards ceremony. I can’t imagine accepting such an accolade without thanking all of you! If not for you, I could not have accomplished this achievement.
Thank you for reading my blog, using my site, and hiring me to be your Naples real estate resource. I’d also like to thank those who refer me to their friends and relatives even when we’ve never directly spoken. Your generosity is humbling, and I am honored.
Please let me know how I can assist you or the ones you love!
Shannon Lefevre, PA
Your Naples Smart Girl!
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