How to WIN as a Seller in South Florida in [2023] - Don’t Chase The Market

As the market in South Florida shifts, there’s one thing that no seller wants to experience and that’s what we call “Chasing the Market Down”. But what does that look like, and why do some sellers tend to win while others lose big time.

In today’s video, I’m gonna paint the picture for you from top to bottom on what it looks like to chase the market, and more importantly, how you can avoid doing so, so you’re on the winning side of the equation. So if that interests you, let’s get into it.

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I’m Andy with the Mandel Team at Remax, and every single day, people just like you call us, text us, and email us asking us questions about moving to South Florida or moving within South Florida. And if that’s you, we don’t care if you’re making a move in 9 days, 9 months, or 9 years, we’re here to answer your questions to make everything easy for you for your move here in South Florida.

Alright, so let’s jump into it. Chasing the market is a fairly simple concept. And the sad reality is, you likely know a lot of people that lost way more equity during the last great recession than they ever had to. And while I’m not suggesting that this is anything like that, and in fact, I’m on record multiple times saying I don’t believe it is, but it still doesn’t take a great recession for you to lose money when it comes to selling your home.

So, last year, at any given time, there was probably only about one home in the market in any given neighborhood at the time. And it would sell in just a matter of, you know, sometimes hours, maybe a day or two, cause there were buyers waiting to pounce on every listing. But right now, that’s not what we’re seeing. We’re actually not seeing a ton of new listings hitting the market compared to last year. In fact the number of listings hitting the market is actually down. It’s fewer than we saw last year, but the homes are taking much longer to sell.

So even though it’s fewer homes hitting the market, there’s a lot more for sale at any given time because homes are sitting around longer and accumulating days on market and that just didn’t happen last year. So here’s what chasing the market down looks like.

So imagine there’s a ladder, you know there’s multiple steps of the ladder, right now, all the homes are on the top ring of the ladder, all the similar homes. So you know, 4 bed, 2 1/2 bath homes, similar square footage. They’re all gonna be in a similar price range, most likely. Now, right now, there’s probably five houses on the top ring of that ladder compared to one last year. So all these homes are sitting around, they’re accumulating 2 weeks, 3 weeks, 4 weeks on the market just like you’re seeing right now if you look around your neighborhood, and that’s what’s going on.

Buyers are looking for value right now. So if your home’s not a screaming deal, buyers are passing on it and they’re waiting for what they see is a better deal.

Buyers just don’t have the sense of urgency that was in the marketplace last year. So they’re not rushing to write an offer on just anything. So basically, none of these homes are selling.

Here’s 5 homes on that top ring of the ladder, and they’re all priced very similarly for a very similar home. But eventually, there’s gonna be one person that says, “You know what, I have to move. I got to get to wherever I’m going”. Maybe they’re leaving the state, or whatever it is, they go ahead and they adjust their price and they come down to that next ring in the ladder, and they reduce their price. And that’s the next property that’s gonna sell. because that is the clear and distinguishable value for buyers.

So what happens after that property sells, all of the other sellers, all 4 of them that are still on that top ring, they say ”Okay, that must be where the new market is”, and all of a sudden, they all start reducing down to this price.

So now there’s, you know, another 4 homes on the market, maybe one more hits the market again and they’re all still priced at this next ring of the ladder slightly below.

So again, there’s no clear differentiation of value. And again, buyers wanna see value right now to justify the fear in the marketplace going on the media, and because interest rates are twice as high as they were in January.

So, this is the new market on that second ring of the ladder, and you know, this process repeats itself. They all sit there, all of a sudden the next person wants to, you know, they have to move so they reduce their price and that becomes the next one to sell, and so on, and so on. And that’s how you chase the market down. That’s just how a falling market works.

So the key is that the person, who is the first one to reduce, at that next ring right below the top, they’ll look like they were making a bad decision and they were losing money but they actually went and did the best out of everyone because everyone then chased them down. And then because someone made that move, someone chased them down, and the next one they chased that down, and the process just keeps repeating itself.

So it’s like we’re not learning our lesson from history. But they way that the brain works is that, we don’t wanna lose so we price our home at, or slightly above the market to “leave room for negotiating”. Does that sound like you?

So, that’s what sellers want to do because they want to maximize the price of their house. That’s obviously what’s in their best interest. But in a falling marketplace, what you really need to be doing, and this is where it just takes experience knowledge of what’s going on right now, is you have to price ahead of the market.

When price ahead of the market, you’re taking a little bit of pain today but you’re effectively avoiding so much more pain later on because you’re finding yourself further up that ladder than anyone else. So that’s what it looks like when people chase the market and it’s sad how many stories we could really tell of people who were offered $700,000, and they said, ”No, no, no. I need $715,000”, Okay, well what happened is 2,3 weeks, 4 weeks later, they reduced to $700,000 and they say, “Here I am, I’m at $700,000. And now, I recognize that this is where I needed to be. So here I am”, and now they're ignored, you know, cause that's not where the market is. And all of a sudden, they’re accompanied by all these other listings at that price and they have to sift through all these competition, there’s no differentiation, no clear value, and then they get a $680,000 offer. And they say, “Oh I’m not taking that”.

Well, eventually, 3,4,5 weeks later they say, ”Okay fine. We go down to $690,000. Where are my offers?” Well, they’re nowhere because everyone else is priced there, and so on, and so on.

There’s still no differentiation. So I hope this makes sense. It’s not losing money, it’s getting ahead of the market. And when you think about it, it’s actually locking in a higher price by moving faster to that price.

So if you have any questions around this, whatsoever, like I said, we have questions every single day from people just like you. Call, text, email. We do a zoom, we can talk you through any aspects affecting you or your home.

So if you’re looking to make a move in South Florida, remember we got your back.