Monday, December 10, 2012
The two-bedroom Coral Springs condominium went on the market for $53,000. Unlike other condos for sale across South Florida, this one wouldn't prevent the buyer from renting the unit in the first year.
A low price combined with no rent restrictions turned the bank-owned Napoli Gardens condo into a must-have. Within a few days this spring, it drew 54 offers, finally selling to an investor whose $71,000 cash bid beat all the others by at least 10 percent.
It was the most interest real estate agent Marta Dupree of the Keyes Co. had seen in one home in her 33-year career.
"Overwhelming," she said.
As the sizzle returns to South Florida's housing market, many homes are getting multiple offers, a result of strong demand from first-time buyers and investors and a shortage of available homes. It's vastly different from a few years ago when falling prices and a glut of homes for sale left frantic sellers in search of even one offer.
Homes with dozens of bids are the exceptions, but an attractive property can get a handful of offers, putting sellers in complete control.
"They have a choice, rather than taking any deal that comes across the table," said Dean Sklar of Coldwell Banker in Weston.
In the past, agents gently advised clients to get pre-approved by a lender before they went house-hunting. Now that pre-approval is practically a requirement before the home search begins.
In today's climate, cash buyers are best equipped to land a home with multiple offers because the deals will close quickly, agents say.
Those seeking mortgages can compete if they put down 20 percent or more. But buyers who need Federal Housing Administration financing struggle to stand out because their credit may be spotty and they're making small down payments.
Lenders and other sellers sometimes resort to what veteran West Palm Beach broker Douglas Rill calls "drama pricing" to attract multiple offers.
They'll set the asking price at below market value, hoping to create a bidding war that drives up the sales price.
A few months ago, a lender instructed Rill to list a run-down home near West Palm Beach for less than $40,000. If it had been up to him, he said he would have asked at least $10,000 more based on comparable sales nearby.
The home, with no kitchen appliances and a bad roof, drew 22 offers and finally sold for nearly $53,000. It was shown more than 70 times. "The front door was about to fall off," Rill said.
Some agents are required to keep taking offers until the lender accepts one in writing. But in most cases, brokers whose clients are considering multiple offers try to discourage any more bidding.
Stephen B. McWilliam, president of Greater Fort Lauderdale Realtors, said he recently had a Margate home that received five offers in a day, three of which were above the $175,000 asking price.
At that point, he changed the listing to "pending sale."
"It was unfair to potential buyers to lead them to believe that they still had a reasonable opportunity to get the property," McWilliam said. "It would have been a colossal waste of everyone's time to continue to show it."
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