See it, like it, buy it
In this market, there's no time to dwell on a home-buying decision. Sometimes even a second look is a luxury.
By JUDY STARK
Published May 7, 2005
This may not be the fastest home sale in Tampa Bay history, but you'll have to go some to beat it:
4 p.m.: A home on Dartmouth Avenue in St. Petersburg goes into the Multiple Listing Service. Listing agent Rose Ademy of Coldwell Banker Residential in St. Pete Beach posts a note about it on the office bulletin board, mentions it to fellow agent Suzanne Olson. Olson immediately calls a client, arranges to show him the house at once.
4:30 p.m.: Buyer sees the house - three bedrooms, two baths, about 1,000 square feet - and decides this is it. He's ready to make an offer for $3,000 less than the asking price of $139,000.
"I called Rose on the way back to the office to say, "We're writing an offer right now,' " Olson said. "That's what you've got to do in this market."
5 p.m.: Back at the office, Olson hands in her client's offer, seller accepts, contract is signed. Done deal.
"He was an educated buyer and a preapproved buyer, and that makes all the difference in this market," Olson said. "If I had waited until the next day my client would have lost the house."
Fast but not unique. Try this one:
4:30 p.m.: Seller signs the listing agreement on a two-bedroom, one-bath house in Largo built in 1959. For-sale sign goes up in the front lawn.
6:30 p.m. Full-price offer of $99,900 is submitted.
7:30 p.m.: A second offer comes in for $1,000 over the asking price. The two offers are submitted to the seller, who accepts the offer for the higher amount. Contract signed. Done deal.
"It's typical of what's happening in our market: When you price a home fairly and it's in good condition, it goes very quickly," said Tom Barker, an agent with ReMax Affiliates in Seminole who represented both buyer and seller in that whirlwind sale.
He recalled another transaction he heard about on a two-bedroom, one-bath house in Pinellas Park that went on the market for $90,000. In 24 hours there were 30 offers and it sold for $16,000 more than the asking price, he said. "It's kind of crazy out there."
Virtually every real estate agent in the Tampa Bay area has a story - or stories - about the house that sold in a single day or two. Agents also have stories about the ones that got away, that someone else bought before their clients could make up their minds or come back the next day for another look. During March in Pinellas County, 399 homes sold in seven days or fewer, Realtor association figures show.
Thinking about such a major purchase overnight is a luxury of the past, agents say. Barker likes to take his clients outside the house, turn them around to face it, and say: "If you sleep on it, you'll never sleep in it."
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A perfect storm has swept the area's real estate market. Low interest rates drive buyers into the market. Double-digit home appreciation prompts owners to sell and get their money out. Buyers grow sweaty-palmed worrying that if they don't buy now, while homes are barely affordable, they'll never be able to own a home. Baby boomers want to buy the second home to which they'll move in retirement. Investors bypass the disappointing stock market and put their money into real estate. There are more buyers out there than homes for sale.
When a desirable new property is placed on the Multiple Listing Service, agents say, there's a feeding frenzy. It's Economics 101: Supply and Demand.
Obviously, not every home sells overnight, but in many areas, time on the market has plummeted in the last year, a reflection of demand. Figures from the Greater Tampa Association of Realtors show that in March, the average "days on market" for resale homes in New Tampa was 22, down from 76 a year ago. In Town 'N Country it was 29, down from 97. In Lutz-Northwest it was 32, down from 76. In Temple Terrace-USF it was 40, down from 116.
In Pinellas County, average market time for single-family homes in March was 41 days, down from 50 a year ago. For condos, it's 32 days, down from 46 a year ago and 61 days in 2003, according to the Pinellas Suncoast Realtor Association.
"The day after the election, phones started ringing and they haven't quit," said Maren L. Cox of Coldwell Banker Residential in St. Petersburg.
The bottom fell out of the real estate market during the six-week hurricane blitz last August and September - everyone was too busy buying bottled water and hunkering down to go house shopping, and you couldn't buy homeowner's insurance and close a sale. But by November, all those pentup buyers were ready.
Analysts had expected the home sales market to cool after four record-breaking years and in the face of rising mortgage rates, but that hasn't happened. Sales of existing homes rose last month to the third highest level in history. Sales of new homes rose 12.2 percent last month, the biggest percentage gain in more than a decade and the highest annual rate in history.
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Who are the buyers who are ready to sign a contract on the spot on a house that's just come on the market? They're seasoned buyers who have been looking around and know what's selling for how much. They're Internet-savvy, having scanned online listings, taken virtual tours of some properties and checked out neighborhoods and schools.
And they're ready to act. The days of thinking about a home purchase overnight or bringing the parents, the in-laws and the buddy in the business to look a place over in a day or two are gone. The house will be sold before they can get there.
"The hardest thing for me to say as a salesperson is, "If you see something you like and you really want it, you're going to have to make a quick decision. It won't be here even tomorrow,' " said Bill Schenkel, an agent with his wife, Carol, at Century 21 Westbay Properties in Palm Harbor, who recently sold a house on Queen Anne Drive in Palm Harbor in a single day. "I hate to say it. They don't pay attention, and they lose one or two before they realize it. It's not the way to buy a house. They want to think about it overnight. I would not recommend it, but that's the market today."
Nolan Castro of Keller Williams in Tampa listed a South Tampa home on a Friday and had it under contract the next Monday to the second person who looked at it. The buyer, who knew others were coming to look at the house at about the same time she was, went out to her car with her agent and wrote her offer there.
Agents say they've been called pushy and arrogant when they urge buyers to act quickly. "But after they miss a few," said Jeannette Smith, an agent with ReMax Action First in Clearwater, "they're ready to jump."
Without enough inventory to meet the demands of so many buyers, it's inevitable that there will be multiple offers on some properties and the asking price is just the starting price. Smith recently presented an offer on a modest house in Safety Harbor that was priced at $199,900. Her buyers offered $203,000 cash and lost out to one of two other bidders. The reason why sellers choose one offer over another isn't always clear. They're not obliged to take the highest bid. There may be contingencies: the date of closing, for example, is often a major negotiating point. Being preapproved for a mortgage loan is critical, agents say. Sellers don't want to sign a contract that falls apart when the buyer can't get financing.
In another recent fast sale, Castro's client was the winning bidder, "and the other agent flatout told me, "The difference was your buyer had a preapproval letter and the other guy didn't.' "
Not every homeowner is pleased when the house sells instantly. They think they underpriced the house, or they want the agent to reduce his or her commission. "Maybe the house was priced exactly right," Castro said. It's generally believed that the best offers come when a home is new on the market.
As for cutting the commission, Castro reminds sellers that the contract is just step one. There's a long road of appraisals, financing, disclosures and title searches (and headaches and problems that may crop up along the way) before the sale is closed.
In the current climate it's often the house in mint, move-in condition that sells in a day. But agents say demand is such that the old rules about paintup/fixup/new carpet don't always apply, especially if the buyer is an investor who is seeking a property to renovate at a good price. Buyers who might once have turned up their noses at frowsy carpet or tired paint or limited curb appeal may look past them and make an offer anyway.
"People are just buying; it doesn't matter the condition. I'm seeing it every day," said Smith of ReMax. "They're trying to grab hold of some real estate."
-- Information from the Associated Press was used in this report.
-- Judy Stark can be reached at 727 893-8446 or stark@sptimes.com