Geri and Bob Quinn

Almost overnight, a number of potential Cape Coral home buyers and the agents representing them have been transformed into the real estate version of Wile E. Coyote as they pursue the purchase of a home that is proving to be every bit as elusive as catching the Road Runner. The speed of our market has suddenly gone into a rapid, almost Looney Tunes-type escalation phase over the past 3 to 6 months, shifting our market into a “fast money” condition. This rapid fire sales and price escalation has left a growing number of buyers behind the market in a Road Runner cartoon-like cloud of dust. “Meep, meep.”

It is as if the market is feeling the need to prove the relevance of Newton’s Third Law of Motion, as the buyer demand for real estate in Cape Coral has continued to ramp higher, while the supply of available properties listed for sale on the market has dwindled. This equal, but opposite reaction has helped squeeze home prices ever higher, resulting in a dramatic shift in buyer mentality away from the very patient, rational approach over the past several years to the much more aggressive — dare we say it — borderline irrational buyer demeanor of today.  

What do we mean by this? If you are a seller, and if your home, condo or vacant residential lot is priced correctly to the current market, you should have showing appointments (stress placed on the plural) scheduled within hours of your property “going live” in the Multiple Listing Service. This showing frenzy will continue throughout the first week your home is on the market, however, your home will likely be under contract with a buyer in less than seven days. In this now common scenario you should begin receiving multiple full price, or higher, offers on the first day or two on the market. If you have put your property on the market and you do not see this type of immediate activity, then you have most likely overpriced your property. 

From a buyer’s perspective, when a nice home shows up as a new listing on the MLS that looks like it will meet some or most of your needs, and if it appears to be priced decently to the market, you will likely have only several days to make your move on it. If you have to think or blink, other buyers (again, focus on the plural) will beat you to it. For a buyer, it is important for you to try to determine up front what “trade-offs” will be acceptable to you with a home, because it is unlikely that you will find the perfect home that checks all of the boxes. And, as we have noted, any hesitation in this market means you will likely be too late with your offer. Also, plan to offer full price or higher, and be prepared for the new listing to go into a “highest and best” offer situation with a set deadline. These highest and best deadlines are usually occurring within the first 3 to 7 days after a home is listed on the market.

From both a buyers and a sellers perspective, keep in mind that the offer price and terms of the sale can be important considerations. We are seeing situations where a seller may be in the process of having a new home built and it would be better for them to have some flexibility with the closing date on the sale of their current home. In these cases, the seller might accept a somewhat lower sales price in exchange for a longer closing time frame, instead of accepting the highest offer with a shorter closing time. In some other cases, if there are multiple offers above the list price, a seller might favor a cash offer over a buyer who is financing their purchase with a mortgage, because of concerns that their home may not appraise high enough for the mortgage to be approved. In a fast moving market, a low appraisal could cause the deal to fall through, or the sales price might need to be renegotiated lower to meet the terms of the mortgage.

We are also seeing some buyers use escalation clauses, stating that if any other offer comes in above their offer, they will beat that offer by $2,500 up to a maximum price they are willing to offer. These escalation clauses usually require proof of another bona fide arm’s length offer from a third party buyer who is not related to the seller. 

As great as this may sound for sellers in our market, they need to realize there are a few potential pitfalls in this fast moving market when it comes down to sorting through multiple full price or higher offers. One factor for a seller to consider is whether or not the buyer was actually present during the showing appointment, or was their agent “showing” their out-of-town buyer the home through something like FaceTime or Zoom? We also see cases where an out-of-town agent, who may not be overly familiar with Cape Coral, is representing an out-of-town buyer and they are submitting an offer totally sight unseen. If a seller accepts these types of offers, the buyers are often using their inspection period to travel into town to determine if they really want to move forward with their purchase. This can lead to wasted time for a seller, as their home could be under contract as a pending sale and off of the market for several weeks, only to have this type of buyer walk away from the deal after seeing the property in person. Offers from “in-person” buyers can sometimes be stronger.

Another potential pitfall for a seller to be aware of in our current market is that buyers who agree to pay full price, or above the full list price for a home, are much more likely to expect nothing less than perfection in the home inspection report. So even though they are using an “as is” purchase contract, a buyer paying a “premium” dollar amount for a home will often use the inspection report to negotiate certain repair or replacement costs with the seller. This is still happening in a seller’s market, and the seller can say “no” to these inspection-related requests and put their home back on the market. Although it is likely that another buyer will make a new offer on the home in a matter of days, the seller will need to disclose any new problems identified with the home, and will most likely end up having to make the repairs for the new buyer. We are seeing some buyers strengthen their offers by waiving any home inspections to beat out other buyers with better terms, and literally accept the home “as is.”     

To wrap it up, we have noticed some Realtors in our market are trying to entice homeowners to list their homes for sale with them by claiming they have a massive database of out-of-town buyers looking to buy a home in Southwest Florida. We do not doubt that a lot of local Realtors have a sizeable database of potential buyers, but this particular sales pitch is saying that if you have thought about selling your home, “call us” and we will match you up with buyers in our database and sell your home directly without even putting it on the market. It all sounds good, but if there ever was a time for a seller to try to benefit from exposing their home to all potential buyers and letting the market determine the fair market value of their home, this is probably it. 

The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of April 6, 2021. It was compiled by Bob and Geri Quinn and it includes information specifically for Cape Coral single-family homes, and does not include condominiums, short sales or foreclosures, unless otherwise noted. The data and statistics are believed to be reliable, however, they could be updated and revised periodically, and are subject to change without notice. The Quinns are a husband and wife real estate team with the RE/MAX Realty Team office in Cape Coral. They have lived in Cape Coral for over 41 years. Geri has been a full-time Realtor since 2005, and Bob joined Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.