Naples Real Estate Tricks You Should Know

Naples Real Estate Tricks You Should Know

Good Day, Naples Friends! Today, I will share a few tricks in the Naples real estate market that you should know if you’re planning on buying or selling real estate within the next year!

There are some Naples neighborhoods where I’m seeing dramatic changes in inventory levels and others that barely change. Here are a few examples. Bay Colony’s inventory is currently at 28.6 months today. That’s the lowest it has been since the second week of February. At one point, inventories in Bay Colony had reached as high as 43 months, as noted during the first week of March. On the surface, Bay Colony has remarkably improved since the season’s peak, but seven failed listings have exited the market and may likely return as early as October. If those listings were to re-enter the market today, there would be an additional five months of inventory. But, if we go through a slow summer, which we might, considering Bay Colony only has three pending listings right now, that could dramatically change inventory levels at the start of our pre-season. Six of the eighteen sales that sold last year closed between June and September. These results show a downward trend compared to the year before when there were ten sales during the same timeframe.

On the other hand, Naples Cay has been floating between 4 and 5 listings total since the second week of January, while the number of sales for the past 12 months has dwindled from fourteen to nine. Naples Cay notoriously takes a summer snooze with real estate activity from June through September, during most years, coming to a near complete stop. This year’s snooze started at about the beginning of April. There is no evidence of shadow inventory in Naples Cay, which means we could easily roll into pre-season with limited inventory, which is currently at 5.13 months. However, market times are starting to creep up, which means owners might be more negotiable than they may look on paper. Don’t forget that every weather forecaster on the planet is doing their fair share of forecasting the most catastrophic hurricane predictions ever. (I miss regular news reports.) Suppose this Naples Cay real estate stall continues. In that case, new listings next pre-season might price position slightly lower than the current inventory, with evidence suggesting current pricing is a little out of reach to attract buyer attention. Price wars begin like this.

My point is that not all Naples neighborhoods are moving the same way. Robust markets with low inventories see little potential for shadow inventory, while other markets show some promising signs. If you’re thinking about buying, you should call me to see if now is the best time to buy before prices continue to go up or if you can reap some reward for waiting until that shadow inventory resurfaces, creating some downward pressure on your favorite Naples locale.

On a side note, many of you get Naples real estate news from several sources. Watch those who tout lower inventories. They might feed you tempting headlines to get you to list or purchase. Verify where the inventory went, and ask me if you need to know how.

How Agent Behavior Affects Your Sale

We’ve all heard “buyer’s market” and “seller’s market.” Many people falsely believe it’s just the buyer and seller who make or crush a deal. If you’ve been reading my Naples real estate blog for a while, you know I believe there are at least four players in every real estate deal. Those four entities are the buyer, seller, buyer’s agent, and seller’s agent because any one of them can make or kill a deal. Rookies eventually learn they can’t want a deal more than their client, but before they learn that valuable fact, many face quite a bit of pain before grasping the concept. That’s why I want to bring you back to this shared behavior chart.

Confidence vs. Chaos

Starting a few weeks ago, I witnessed some behaviors from agents I hadn’t seen in a long time. The tone from some of these agents has ranged anywhere from calm to borderline hysterical. The most tenured/accomplished agents still keep their cool and show appropriate confidence while hinting towards a more flexible seller. In contrast, newer agents behave like their house is on fire. In fairness, it could be. New agents commonly hop into the business during a good market trend and assume the money keeps rolling in by itself. It doesn’t, and many people question how they will keep their lifestyle going. They also don’t understand why things aren’t selling the same way.

As an example, there are 336 residential properties on the market in Naples today where the listing agent has an interest in the property, i.e., they’re an owner or partial owner getting some financial benefit other than a commission. Of those 336 listings, the market time has more than doubled, and there are 15.44 months of inventory. Good grief, why would I trust you with mine if you can’t sell your own home?

More importantly, these people are advising their clients to do or not do things to put a deal together. When you’re working with an agent who’s having a hard time paying for the advertising on your property, they could be encouraging you to take a lower offer, drop your price, or perform repairs you aren’t required to make just to keep a deal together because they need the commission worse than you need the sale.

Performance Before Feedback

Just last week, several agents called me after I submitted feedback on their showing, looking for more insight as to why my clients weren’t interested in their listing. It’s funny how feedback becomes more important as a market deteriorates. Of the nine listings I showed/tried to show, there was one listing where the listing agent accommodated us by being present with the lights on. That agent scored 1,000 points for doing that and providing information we wouldn’t have known otherwise. 1 out of 9 listings looked amazing, seven were dark and showed terribly, and we couldn’t get into the last listing because the listing agent couldn’t be bothered. That one condo we couldn’t get into dropped another $50,000 a few days later, so it wasn’t because the owner wasn’t motivated to sell. If a buyer’s agent is doing more to sell your property than the listing agent, it’s time for a new listing agent.

Pre-negotiators Sell More!

In another situation, I received a call from a buyer interested in a villa in Pelican Bay. We took a peek at it, and he left with the impression that it was good enough to chat with his bride, who couldn’t be there. To prepare if he wanted to write an offer, I contacted the listing agent to see if they would share any valuable information that would help me determine the owner’s appetite for a lower offer. Surprisingly, the agent was beneficial and said some things that helped me understand the buyer could get the property for a great value. This listing agent understood the assignment, and that property is now under contract. An overwhelming number of agents need help understanding how to pre-negotiate. After all, real estate school teaches us that we cannot discuss numbers other than the list price. There are legal and ethical ways to pre-negotiate, so list with an agent who can explain how it can be accomplished! If you’re going on the market, ask me how I will help you pre-negotiate.

Impactful Price Reductions Get Great Results

Today, I received an email from an agent titled “Substantial Price Reduction…” So, I took a closer look at it to determine if I should send it to one of my clients waiting for a deal. It turns out it’s a 2.52% reduction on top of a 2.5% reduction 45 days ago and a 2.5% reduction 30 days before that, and it’s still the most expensive unit in there by a lot! Now she’s destroyed her credibility AND has an overpriced listing. The fact is, she’s not alone. 133 price reductions were taken for less than 3% this past week—37% of the total cuts. Let’s see how that’s playing out. Of the 133 3% or less price reductions, zero have sold. But, of the 226 reductions that were reduced by more than 3%, five have sold. Impactful reductions sell properties while losers keep on losing. Let’s have a meaningful conversation about the actual value of your property so we can help you capture the highest value for your property and avoid the whole ride to the real market value game!

Negotiations Are All Over The Road

Lastly, I took a peek at how sales are looking. If everything I’ve said doesn’t already prove we’re navigating an extremely bipolar real estate market here in Naples, then perhaps this may assist. Closed sale negotiations are all over the road. Although considerably fewer properties are closing at or above the list price, there are also some huge discounts being offered as well. The most extreme discount this past week sold for 38% less than the full list price. An attached villa in Naples was listed during the first week of March for $479,000 and reduced five times to $399,000 until about the third week of April before pending a contract. It closed for $250,000. While the paint colors may have been the most offensive part of the offering, the two units sold before this one sold in the 4’s while the one pending today is listed in the 5’s. The listing agent wasn’t keeping the motivation a secret. In all caps, the listing remarks read PRICE DRASTICALLY REDUCED–HIGHLY MOTIVATED SELLER–LOOKING AT ALL OFFERS! If you haven’t signed up for new property notifications in all your favorite Naples locations, you could be missing the next best deals.

Closing

We are about to enter travel season, which means many agents will be taking off and making it difficult to show their listings. Please contact me in advance if you’re planning to come see properties this summer so I can offer you the best opportunity to see everything you’re hoping to view.

If you’d like a full Naples inventory report, sign up for my monthly newsletter at the bottom of the page!

Best Regards,

Shannon Lefevre, PA
Your Naples Smart Girl!
239-595-6223