Thoughts On The Miami Real Estate Market Considering The News About The National Economy Posted on August 10, 2023 by Sarah Elles Boggs We are constantly being fielded with questions about the national economy and whether or not it is a good time to buy if you are financing. This is a very tricky question for real estate professionals as there are so many mixed messages coming from the news media. Will there be a crash, or will it be a soft landing? Watch The Macro And The Micro Markets If you are relying upon the major news media for your Miami investing advice, you are likely stressing yourself out unnecessarily. The Miami market is nowhere near the markets in California, polar opposites even. The major news media tend to concentrate on the nation as a whole, the macro-markets. In order to make an informed decision about Miami, you must pay attention to what is going on in Miami and we have historically been an outlier. Yes, we were hit harder during the Great Recession, but we also recovered stronger and more quickly than other markets. Our job market is far more fruitful than the rest of the nation. Between our international banking hub in Brickell and Citadel relocating their entire operation to Miami, we not only have new jobs coming online, we have a lot of very good jobs available. Our tax climate is also favorable for investing, this is a large part of why the mass migration has happened from New York and other states up north that are more highly regulated. The Miami boom is not a heavily-leveraged fake heyday the way it was in 2005. We are funded by a thriving job market, large cash deposits on new construction and the global elite recognizing the opportunity that we offer. Prepare For Naysayers No matter what the market looks like, there will always be someone who says it’s an awful time to buy. There were even people calling for a crash in 2021 when rates were so low, money was almost free. This created a ton of missed opportunities. Values were on the rise and it was almost like stealing money. But this is the nature of investing, there will always be a naysayer or debbie downer. What We Actually See The updated CPI was released this morning and reported that inflation, while still present, has slowed on a national scale. The national job market is on the uptick slowly but surely, and Miami is still strong. Rates were raised in July, and despite fears of another hike in September, the reports this morning give some assurance that it will be awhile before the Fed does anything more with the rates. They no longer predict a recession. Goldman Sachs also predicts that we’ve already seen the bottom, and a soft landing is in store. What we see in Miami. Now as far as what’s going on in Miami, there is a slight loosening of inventory. This is a good thing as we are now in a position where buyers have more options, yet we are still firmly in a seller’s market. The inventory was not tight because of people holding onto sweetheart mortgages, it was tight because there was just not enough to meet the influx of demand. Developers are doing their part to remedy this. If you would like a detailed analysis of our Coconut Grove micro-market, I publish one every year. The last one was just a few months back in March and can be found here. Next week, we can dive into the Douglas Elliman market reports for the different areas of Miami to get a better picture of the performance in different neighborhoods. What The Future Holds Going forward, my advice is to accept the 7% rates for now. The rates of 2021 were an anomaly and while it may be jarring to compare what you could have bought a few years ago to today, but this is the reality today. If you are considering waiting for rates to slip just know that if that does happen (and it likely will not), that will only ignite more competition from others who are waiting. The increased demand will just bring the prices up higher, so you will wind up paying more anyway. The best thing to do if you are concerned about rates is to ask for a rate buydown. Alternatively you can lock yourself in at the prices available today and rates that we have today, then refinance at this price if/when rates do slip in the future. Regardless of which route you choose, all models point to the rates remaining stable for some time in the future and Miami remaining confidently strong. To speak more specifically about an investment or if you need/wish to move, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. We would be honored to assist you.
According To The Government, Gas Stoves Need To Be Banned Now? Posted on January 13, 2023January 13, 2023 by Sarah Elles Boggs Today is Friday the 13th of January, 2023 and the Consumer Product Safety Commission’s newest public enemy is none other than GAS STOVES. To preface this informative rant, I will say right now that we do not get political at MiamiLuxuryHomes.com. There is a time and a place for that, but in here we talk about how different things affect Miami condos or homes and the people who live in them. So with that being said, what a bunch of garbage!!! Why should gas stoves be banned? The Consumer Product Safety Commission is floating the idea of a ban on gas-powered appliances, sparking outrage throughout the nation. In reality, this is more than likely something that was said in passing, some of the more radical leftists repeated it, were vilified for it and now the media is involved, making it a sensationalist headline (with me entering stage left, or right, I promised to not be political but you get the drift). The claim is that the emissions from the gas increase the risk of asthma in those living in the home. Everything should be run on electricity. There are several problems with this claim. For brevity’s sake, I will only touch on the main one. The science is clear on this. There is “no evidence of an association between the use of gas as a cooking fuel and either asthma symptoms or asthma diagnosis,” per a multi-year study tracking more than 500,000 kids around the world. The truth about gas stoves. One of the after-effects of this extreme emissions talk is the claim that it is yet another swipe at the livelihood of marginalized people in the US. That is a stretch on a piece of proposed legislation that is also a stretch, at best. In the urban core and Miami Beach, gas is insanely expensive to add to a project. The taps alone make it cost prohibitive for most developers in the mid-range price points, then you have to add the cost of the permits, the service itself and the additional detectors that alert the residents of a leak. On top of all of this, the appliances themselves are more expensive when opting for gas. This is why you will rarely see gas appliances in new buildings. In some other areas that were developed in Miami’s infancy, you will find a reasonably-priced condo that has gas available. These are usually older developments, from the 1950’s and earlier whose code enforcement and permitting laws are grandfathered into the era of original construction. This grandfathering in of code requirements is being phased out after the tragedy at Champlain Towers in Surfside. Newer projects in the low to mid-range price points nearly always have electric appliances in Miami. Which stoves are the best? If energy efficiency is your tie-breaker, neither gas stoves or their electric counterparts are going to be your best choice. For the most energy-efficient range on the market, you will want to choose an induction cooktop. Gas stoves are the go-to choice for home chefs and foodies. They offer more precise temperature control as well as more even cooking and the ability to toast, char or flambé dishes. Electric stoves are best for those who worry about open flames and cost efficiency. With all of this being said, there are a few developments in Coastal Miami that offer gas appliances. Some of our favorites include Apogee in SoFi, Elysee in Edgewater, and The Mansions at Acqualina in Sunny Isles. If you are interested in finding a new Miami property with a specific amenity (such as gas stoves), please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
Miami Is Set To Host The World Cup 2026 – How Will This Affect Real Estate Values? Posted on December 19, 2022December 20, 2022 by Sarah Elles Boggs GOOOOOOOOOLLLLLLLLLLLLLLLLLLLLL!!!!!!!!!! If this sound is still ringing in your head, you certainly got a healthy dose of the World Cup 2022, which just wrapped in Qatar with a historical win for Argentina and its superstar Lionel Messi. While watching from Miami was a load of fun and that is all fine and good, this is a real estate blog. As Miami is one of the host cities for the 2026 World Cup, we naturally want to know what to expect in our real estate values, so here is what we found. Hosting any worldwide event is bound to have a positive effect on the business climate in the hosting city and surrounding areas, but the FIFA World Cup is different than the others in several ways. For starters, the World Cup takes place every four years rather than annually. This makes the anticipation build, gives the marketplace additional preparation time and extends the effects to the business climate of the area after the event. Hosting the Super Bowl does bring a hefty amount of attention to an area, but nothing like the world’s stage that the Copa Mundial puts you on. Additionally, the World Cup does not take place in just one city the way the Olympics does. The games are spread across several different regions in the area. The 2026 event is unique in that it will be hosted not only by different cities, but also will be spread between three different countries! Matches will be held in the United States, Canada and Mexico. “Leading up to the World Cup, there was an increase in demand for properties that are suited for the hosting of the influx of soccer fans, their family and friends,” Craig Hutchinson, CEO of Engel & Völkers South Africa, told Mansion Global recently. The 2010 World Cup was held across nine cities in South Africa, including Johannesburg, leading to “a lot of tourists who ordinarily wouldn’t have traveled to South Africa experiencing the country for the first time.” Anticipated Effects To Real Estate No matter who wins the cup, developers and property owners are poised to realize hefty sales prices, particularly in cities that are ideal for vacation homes and tourism even during down seasons. Here is a list of reasons that we believe Miami will reign supreme during and after the 2026 World Cup. Availability of Short Term Rentals – According to Mr. Hutchinson, the properties that were highest in demand were those that were easily converted into AirBnb or other short-term rentals. This was due to the fact that the majority of the international buyers who made investments did so on vacation or second homes. Given the new wave of development in Miami for luxury condos with the added flexibility of using the short-term rental platforms, we expect to see a higher demand in buildings such as Natiivo, E11even Hotel and Residences Downtown Miami, along with other buildings that are currently in the conceptual phase, but will be ready for market by the time the games begin. Lifestyle – While each of the cities hosting the 2026 World Cup was chosen for a reason, none of them really knows how to host a celebration the way that Miami hosts a celebration. We host parties like it’s our job, and it sort of is. Just look at the glamour and gradeur of the Miami Grand Prix, annual Art Basel events, Miami Music Week/ULTRA and any of the other international festivals and parties that take place in the 305. Miami throws a party, and we do it well. Climate – Nobody wants to buy a vacation home in a dingy, dreary climate. If you’re getting away to unwind, you want sunshine, sand, and clean air. This is something Miami is plentiful in, far more so than any of the other 2026 host cities. Of course we cannot offer mountains or snow, but that is something that can be obtained farther north and there is enough business to go around. Culture – Of the list of host cities, none compares to Miami when it comes to culture. Considered the South American capital of the US, Miami has thriving communities of people from across the globe. We are a true melting pot, capable of making people feel at home while also offering a host of other cultural experiences. Ease of Access – With over 1,000 daily flights to almost 200 domestic and international destinations, the Miami International Airport is nothing to bat an eye to. In 2021 it was named the busiest US gateway to international passengers, surpassing New York’s JFK airport that has held the honor for decades. Over 17.5 million passengers make their way through the airport each year and Miami-Dade is planning for the future. They have recently passed a $5 billion improvement and expansion plan that will be executed over the next 15 years. In his interview to Mansion Global, Mr. Hutchinson mentioned that, “There was no evidence of an increase in demand of international property buyers directly after the soccer World Cup, but what we did notice was an increase of international buyers approximately three years after the hosting of the World Cup.” This delayed effect was attributed to the visitors who discovered the South African lifestyle during the World Cup eventually committing to purchasing properties in popular tourist and second-home areas. Considering all of these attributes and what Miami has to offer, we will set our ducks in a row in anticipation of our time to shine in 2026. If you are interested in a private presentation of vacation or second homes that allow short-term and/or AirBnb hosting, please contact Michael Light, Broker and Executive Director of Luxury Sales at Douglas Elliman. You may reach Michael directly at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
Buyers…Don’t Be Deceived By MLS Square Footage Data Posted on March 19, 2017March 21, 2017 by Michael Light I hear agents and brokers tell me quite frequently…”but, that’s common practice.” Just because something is so-called “common practice” in any industry, especially real estate in South Florida, does not necessarily mean it’s legal and/or ethical. For instance, it is “common practice” for listing agents to manipulate square footage data in the MLS, which is unethical and completely skews statistical data, i.e. price per square foot. Per MLS guidelines, when an agent places a property in the MLS, whether it is a condo or a single-family home, the agent is required to input the living area square footage, total area square footage and the adjusted area square footage. Believe it or not, these are 3 very different numbers. Living vs. Adjusted vs. Total Area: Living Area: Area within the property that is under A/C (air conditioned space) Adjusted Area: Living Area + 50% of terrace/balcony and garage space Total Area: Living Area + ALL terrace/balcony and garage space When buying property, buyers depend on comparables (“comps”) to calculate what other homes in the area have sold for. This gives a buyer the information needed to calculate the type of offer to make on a specific property. The actual sales price of a comp is important, but price per square foot is more important. It Happens Every Day… Let’s say you find a home in Coconut Grove that you want to purchase, but you are not sure what kind of offer to make. Well, there is most likely not a comp down the street exactly like the home you want to purchase (wouldn’t that be easy) to compare it to. So, you look at beds/baths, lot size, year built, and most importantly, the square footage of the home you want to purchase and compare that information to other homes that have sold recently in the immediate area. If the home you want to purchase is 6,000 square feet (Living Area) and the price is $6,000,000, the price per square foot the seller is asking is $1,000. If a similar home (beds/baths, etc.) sold down the street for $900 per square foot, you would assume that you should offer $900 per square foot for this purchase. But wait, what square footage did the agent down the street input into the MLS to calculate that $900 figure that just closed? You MUST make sure that you use Living Area of the comp down the street for an apples-to-apples comparison. Let’s say the comp down the street closed at $7,200,000 and the square footage in the MLS is 8,000. Simple math says it sold for $900 per square foot. But what if that square footage is actually Adjusted Area, not Living Area? The actual Living Area turns out to be 6,800 square feet…making the actual price per square foot of the sale $1,059! So, you use $900 per square foot to make your offer on that dream home in Coconut Grove (because your agent is uneducated with this process) which makes your offer $5,400,000. The seller is offended at your low-ball number and completely rejects it. You think the seller is crazy and unrealistic, and the seller thinks you are crazy for trying to “steal” the home at an unrealistic price. Negotiations break down, and you never get your dream home. Had your agent done his research on the comp down the street and realized it actually closed at $1,059 per square foot, your dream home’s asking price of $1,000 per square foot would be completely realistic and actually a bit underpriced. You make an offer close to $1,000 per square foot (realizing you’re still getting a deal) and live happily-ever-after in your dream home. Obviously, happily-ever-after might be a stretch, but you get my point. 2 completely different outcomes all as a result of the agent you chose to work with as a buyer. The most accurate way to gather the square footage of a home is to look at the architectural or floor plans. I understand that is not always an option, so the next place to look is on the tax roll. Sadly, even though the information is there for everyone to see, listing agents can still manipulate the MLS data, using the larger number (Adjusted or Total Area), to make their price per square foot look lower than it really is and, unfortunately, buyer’s agents usually don’t double check this data for their buyers. There is no loyalty owed to an agent just because they showed you some properties. If you, a buyer, feel that your agent is not experienced/knowledgeable enough to educate you when making the purchase of your largest asset, find another agent! UPDATE March 21, 2017: I have received several calls from fellow agents that are not very happy with this article, for obvious reasons. I want to clarify something, though price per square foot matters, it is not completely cut and dry. Just because a comp closed at “X” does not mean you offer “X.” Luxury properties do vary by quality of construction, location and the “1-of-1” factor (very special/unique). In the case of luxury properties, other factors should definitely be taken into account in addition to price per square foot. Therefore, it is even more important to work with an agent who can navigate these factors and help you make the right financial decision. If you, or someone you know, are interested in purchasing real estate in South Florida, please contact Michael Light, Director of Luxury Sales at Douglas Elliman. You may reach me at (786) 566-1700 or via email at michael@miamiluxuryhomes.com.
Sellers…Don’t Fall for These Agent Tricks When Selling Your Home Posted on October 18, 2016June 25, 2021 by Michael Light According to the National Association of Realtors (“NAR”) 2015 Profile of Home Buyers and Sellers, 72% of sellers select the first agent they interview to sell their home. That seems ridiculously high…just because an agent is “first through the door” doesn’t mean he/she is best suited to market your property for sale. EVERY AGENT WANTS YOUR LISTING AND MOST WILL SAY ALMOST ANYTHING TO GET IT! I have lost plenty of listings to other agents, it happens. I am so brutally honest with sellers, sometimes to a fault, that I at times lose listings to other agents usually because they will tell an owner anything. The Magic Offer: This is probably the most egregious method some agents use to get listings. Let me share a specific story that occurred recently: I met with a homeowner who was listed as a FSBO (For Sale by Owner). It was a VERY expensive listing, over $10,000,000. The owner and I had great rapport. He was a tech guy into website design, SEO, digital marketing, etc. We hit it off. While talking about technology, he told me specifically “90% of agents do not know how to effectively market properties to sell.” He was smart. A tech giant. He could see through any crap an agent could give him about how their digital marketing expertise, blah, blah was better than everyone else. As I said, this guy was a tech expert. He could look at an agent’s website and see how it ranked, where it ranked, traffic, worldwide reach, etc. When I left his home, he immediately emailed me about how refreshing it was that I “spoke his language.” See, he could see that everything I knew about digital marketing was accurate, it’s what I do…again, I got you to my website didn’t I? He liked my website (the one you are on right now), and I thought I was certainly going to meet him again to secure his listing. After speaking with him a few more times over the next few weeks, he informed me that he was going to list with another agent. He told me who it was and even why he chose them. Here is the kicker…He told me how this other agent had recently brought him 2 offers from 2 different clients to purchase his home…yes, the home that is asking well above $10M. When I asked him why either of the offers didn’t work, he told me they just couldn’t come to terms. Really? With 2 different offers? Here is what most likely happened, and this happens a lot…this agent made up 2 magical buyers with 2 magical offers. There was never a real buyer, or 2 buyer’s in this case. This was only a strategy intended to show the seller that this agent has buyers like this, in this price range, lined up and ready to buy. And since this agent has already brought the seller 2 “buyers” without really marketing the property, just think what they could do once they have that coveted exclusive listing agreement signed and could market the property to their extensive network of foreign billionaires. Give me a break! No agent has 2 $10M plus buyer’s that just happen to be interested in the exact same property at the exact same time. Unfortunately, even though the seller loved my website, my digital marketing expertise, the fact that we spoke the same tech language…he chose an agent that had no online presence whatsoever and no digital marketing expertise because that agent had a stable of unicorns lined up to buy his property…as soon as the owner signed an exclusive listing with them of course. It will be interesting to see what happens with this property over the coming months. Overpromise (LIE)/Price Reduction: “Yes Mr./Mrs. homeseller, the price you think your home is worth is exactly where we should price your home” is at the top of the list of crap agents use to secure listings. So many agents blindly agree with a seller’s idea of their own value just to get their sign in the front yard…and then go back after 3 weeks of no calls or showings to get a price reduction. The moment an agent is hired and their sign is in the yard, the chance of a seller firing that agent is slim, and agents know that. For example, when I meet with a seller, and they tell me their home is worth $1,000,000, I do not just blindly agree. I have done my research…a full statistical breakdown of all homes in the neighborhood. Recent sales, pending sales, available inventory…I know the home is worth $875,000, and I tell the seller that. Usually, after a bit of back-and-forth, we say our goodbyes and I never hear from that seller. A few weeks later, their home is listed with another agent at $1,025,000…it sits for a month, reduced to $975,000…a few more weeks, reduced again…and finally sells near my original estimate of $875,000. The Fake Buyer: This is a rather offensive and very dishonest practice done by some agents. An agent will ask a friend of theirs to accompany them to an open house being hosted by a FSBO. The friend is supposed to act as a buyer and pretend they are very interested in the home. The seller then continues speaking with that agent for several weeks about the “buyer” they brought to the open house. The agent then informs the seller that the “buyer” had purchased another property but would love the opportunity to list their home for sale. Since the agent and seller have now built rapport, the agent has a leg up on the competition to get the listing. To take the “fake buyer” a step further, it sadly works for more than just securing the listing. I know of an agent, and have no respect for him, that was in fear of losing a listing and was trying to get the homeowner to extend the listing agreement. He asked a friend to dress very nicely and even rented the friend a very expensive car. The friend then arrived at the home and toured it posing as a buyer. The homeowner was so excited about this potential “buyer” that she agreed to extend the listing with the current listing agent. Did I mention this was a $10M listing? These are just a few examples of things that agents will do to get listings. Most of the agents in this industry are honest, hardworking and ethical. Unfortunately, like other industries, there is a small percentage of people that hurt the overall reputation of real estate professionals. Cautionary Tale: I was showing property in Coral Gables to clients from NYC late last year whose budget was $10M. We visited a home that was listed at $9.9M and they fell in love. We sat down to discuss an offer strategy and to our surprise, comparable sales put the home’s value at $6M…40% below list price. In addition to being a bit discouraged, my clients were also dumbfounded as they explained to me that in NYC, almost all properties sell near, at or above asking price and they assumed that translated to our market. When I called the listing agent and explained this to her, she agreed that the home was only worth $6M, but said the seller was stubborn and wanted to list for $9.9M…but it was actually higher. Upon further research, this property had been on and off the market with list prices as high as $12.5M. Instead of the current listing agent being honest about the homes true value, she took the listing anyway (see what I mean about taking listings at any price). Soon after this, she lost the listing when it expired, obviously because no one was willing to overpay by 40%. But this is where it gets interesting… Another agent went after the listing and secured it 9 weeks later. Would anyone like to guess as to what the new list price was??? $11.9M!!! This agent walked in and wanted the listing so bad that he told the owner he wanted to raise the price $2M!!! This is absurd! After 6 months, and no activity, the agent talked the homeowner into selling the property at a no reserve auction which is coming up within 2 weeks. When the home sells at auction with a sales price that starts with a 6, the homeowner is going to be severely disappointed but the auction company AND the listing agent will still get their commissions. What Can Sellers Do When Interviewing Agents? First, please read the article that I published recently titled “Seller Beware: Agents Will Try to “Buy” Your Listing?” It is a little added education for sellers. 1. Interview multiple agents. Sounds simple, but as I stated to open the article, 72% select the first agent they interview. 2. Listen, Listen, Listen. Listen to everything that each agent tells you. Take notes to discover what marketing techniques are important to you. 3. Get marketing examples. Ask each agent to give you pieces of their marketing. Whether it be postcards, digital marketing or ads, ask to see different pieces. Ask yourself, if you were a buyer, would these different marketing examples make you want to go visit these properties? 4. Did you know that 75% of home buyers find the home they are going to purchase online? Do these agents have an online footprint? If not, beware…and if so, these agents should go to the top of your list of potential listing agents. Ask the agents to show you web traffic, clicks, visits, etc., to prove to you they advertise online. 5. Ask the agent how they can effectively market your home for sale internationally. Marketing internationally effectively (with the key word being effectively) is a must in the Miami real estate market, as more than 50% of Miami buyers are foreign. Agents will tell you that their brokerage markets internationally, and may even have “International” behind a name or designation…usually this is just fluff. The one thing I can tell you is that Douglas Elliman effectively markets internationally across 6 continents in 484 offices throughout 59 countries with an exclusive partnership with Knight Frank, the largest real estate firm on the planet…hence why Douglas Elliman sold $22+ Billion in real estate last year! 6. Every agent claims to have a buyer’s database. Where did they get this database? How was it collected? Ask the agent where this database came from. Are these buyers the agent has worked with in the past? Did they purchase the list…I hope not. My list, for example, has been collected over years and includes buyers I have actually worked with, spoken to or have visited my website while searching for real estate…real buyers. The 3 P’s The three P’s of real estate marketing for MOST agents: Put a sign in the yard, Put it on the MLS…Pray that it sells! My main advice to sellers…do not work with an agent who only uses the 3 P’s for their marketing strategy! If you are interested in selling your home or condo in South Florida, or simply have a question about the real estate market, please contact Michael Light, Director of Luxury Sales at Douglas Elliman, for a full marketing presentation of how we can market your home to sell for the highest possible price. You may reach me on my cell at (786) 566-1700, directly at my office at (305) 350-9842 or via email at michael@miamiluxuryhomes.com.
Miami Luxury Homes’ Picks | Top 7 Restaurants in Coconut Grove Posted on October 18, 2016October 18, 2016 by Michael Light Coconut Grove, locally known as “The Grove,” has become a hotspot for foodies, and as a resident of The Grove, I have to agree that we have some of the best restaurants in all of Miami. And, because there are so many to pick from, my team and I thought it would be fitting and helpful to give you our top picks of the 7 best restaurants in Coconut Grove. Here you go…enjoy! Green Street Café Glass & Vine Le Bouchon Harry’s Pizzeria Spasso Bombay Darbar Lulu Although Coconut Grove is the oldest neighborhood in Miami-Dade County, until the past few years, it has remained one of Miami’s best-kept-secrets; however, it has increasingly become a place where more and more people want to call home…could be the laid-back atmosphere, friendly vibes, the natural beauty of Biscayne Bay and all of the park-like settings with old trees galore—quite simply, there are too many reasons to list! If you, or someone you know, are interested in purchasing a home in Coconut Grove or simply would like to learn more about the beautiful, inviting village of Coconut Grove, please contact Michael Light. You may reach Michael on his cell phone at (786) 566-1700 or via email at michael@miamiluxuryhomes.com. Photo Source: Green Street Café
Miami Condo Developers Need to Embrace Technology to Survive Posted on July 13, 2016 by Michael Light Developers in the South Florida real estate market need outside brokers, meaning brokers that do not work for the developer and have no association with a specific project, to sell their pre-construction condo projects, especially brokers that utilize technology marketing. Think about it…the more people marketing a specific project means the more buyers for that project. Developers Should Take Notice So many developers in South Florida think they will just hire an in-house sales team, and the sales team will sell all of their inventory. OK, sounds easy enough…but, it is not that simple. In my experience, less than 5% of a project’s sales are done with a buyer who just “walks in off the street” with no outside broker representation (which is a big mistake for a buyer because in-house agents do not have the buyers’ interests in mind, but instead the developers) and the rest are represented by outside brokers. Developers need outside brokers to sell their projects, especially brokers who utilize technology marketing, like myself. A Big Mistake…Missoni Baia I was one of the very first outside brokers introduced to the newest luxury condo project in Edgewater dubbed Missoni Baia, a collaboration by the OKO Group and Italian fashion house Missoni. I was shown renderings of the project and was quite impressed with its overall design and quality, so I wrote a detailed article about it which displayed a few of the renderings in an effort to present the project to my clients and readers. Strike One I published the article on a Saturday afternoon, and the following Monday morning at 7:30 a.m. I started receiving phone calls from my brokerage’s CEO about the article. Why? Because the in-house sales team hired by OKO Group, Cervera, was up-in-arms that I had written about the project, and instead of calling me directly to discuss it, Cervera’s managing partner called my CEO. After a bit of back-and-forth, I decided to take the article down if only to keep the peace. What Cervera, OKO Group or Missoni (whichever was upset about my article) doesn’t understand is that they will not sell their project without outside brokers. How am I supposed to share the project with my clients and readers if I am restricted in marketing? Missoni Baia is absolutely an incredible project, but compared with the average pricing in Edgewater, it is the most expensive project ever to launch in Edgewater. Do they somehow think that buyers will hear about the project, call them directly and pay whatever price they are asking…without any guidance on the overall market? And trust an agent that works directly for the developer…as if that person has the buyer’s best interests in mind? Hardly. Strike Two The same day I published the article I mentioned above, I purchased the URL www.MissoniBaiaCondos.com with the intention of creating a website to market Missoni Baia (as some of you know, I currently operate 6 different real estate websites with 6 more currently in development). However, before I got the chance to even launch the website, I got a letter from Missoni’s trademark attorney demanding that I transfer the domain immediately to Missoni because I was in violation of their trademark. Now, I’m not going to get into the legal analysis of the trademark laws because I am not an attorney, but my point is that I am trying to help Missoni sell their product at no cost to them. Now, I was not the only broker that was forced by Missoni to transfer my domain, other agents were included in their demand including an in-house agent who works for the developer—yes, an in-house agent working for the developer was also given a demand letter! Strike Three…I’m Done After I purchased the URL, but before I received the demand letter, I was personally invited by the sales team to take a tour of the sales gallery. While taking pictures of the sales gallery, I was told by the sales manager that I could not post these pictures on my website or social media. Again, do they not understand they need outside brokers? How am I supposed to share the project with my clients, readers or followers? Maybe the in-house sales team wants to control publicity and not cooperate with outside brokers? Maybe they have discovered some super-secret marketing strategy that gets as FEW eyes on their project as possible and somehow results in success? Most Developers Get It…Paramount Miami Worldcenter & Park Grove One of the many websites that I own and operate is www.ParamountMiamiCondos.com. This is a building-specific site dedicated to marketing Paramount Miami in Downtown Miami. Now, when I first launched this website, the developer, Dan Kodsi, was not particularly happy that I was “competing” with his own website. However, when I quickly became one of the top brokers at the project for many reasons including my website, not to mention the more than 25 articles I have written about the project because I do truly believe in it and the impact it will have on the City of Miami, the developer soon realized that my website actually only helped his project and its sales. And, thereafter, began giving me inside scoops and stories before anyone else, which then I was able to share this exclusive info with my clients. It was a so-called team effort between me, an outside broker, and the developer. There are many other developers in Miami who have embraced outside brokers and understand what I am trying to say. David Martin, President of Terra Group, understands and embraces relationships with the broker community. His most recent project, Park Grove – the most prestigious condo development ever constructed in Coconut Grove, is currently approaching the 90% sold threshold which is due in large part to his cooperation with outside brokers and utilization of technology marketing. Conclusion Developers, please understand….you need outside brokers to market your pre-construction condo developments. Let us use our own resources and utilize technology marketing to sell your inventory. Here are a few key points from a recent Inman News article that I found interesting: You need to implement the latest technological trends to succeed in real estate. Advancements in technology will aid real estate agents’ efforts to sell homes more than they know. There’s no way faster to cripple a healthy real estate business than by ignoring tech. Technology is meant to make our lives easier; anyone not taking advantage of it is essentially doing the opposite. Those who refuse to adopt advancements in technology will be rendered moot by the competition in no time flat. Basically, the days of pouring money into a fancy sales office with brochures, floor plans and a scale model, and taking out ad space in magazines to drive traffic to said sales office is long over. Developers need brokers just as much as brokers need developers.
Seller Beware: Agents Will Try to “Buy” Your Listing? Posted on June 19, 2016June 25, 2021 by Michael Light The Real Deal recently published an article dubbed “Beware of Agents Who Will “Buy” Your Listing,” and it proves to be a good read for those interested in selling a home in any real estate market in this country, but this especially holds true for sellers in South Florida. “It’s one of those hush-hush practices that homeowners rarely hear about, but real estate agents know only too well: It’s called “buying the listing.” What it means is that some agents want the listing to sell your house so badly that they’ll go along with whatever price you ask, even if it’s outlandishly above what comparable houses are commanding. They know that there’s only a minuscule chance the house will sell at the inflated price you’re proposing but they take the listing anyway. They fully expect that after a few weeks with no takers, you’ll sober up and agree to what may have to be a series of price reductions. Buying the listing works for some agents because they get cut into a commission payout that they would have missed had they lost the listing to competitors who counseled lower prices. Plus they reap immediate benefits: They’ve got their name plastered on a sign in front of your house, and they can hold open houses that could bring them new clients and other houses to sell. But there are potentially big drawbacks for you as the seller. Overpricing a house can doom it to months of sitting unsold, even with price reductions. Serious buyers get turned off by new listings with inflated prices, and they may not come back when the price inevitably gets reduced. At the end of the process, you could be left with a final price well below what you would have gotten had you priced it realistically earlier. CLICK HERE to read the full article from The Real Deal. The Overpriced Listing Bottom line is, do your homework. Choosing an agent because they agree with the price you want is going to bring you as much success as choosing an agent because of the color of their shirt or because they drive the same kind of car as you. Sellers usually come up with a price from an emotional point-of-view because their home is special to them. We as agents hear this all the time…”the house next door sold for $900,000, but mine is worth $1,100,000 because my house has a better layout and custom kitchen.” Or, “I know that house…the kitchen is ugly and has less closet space than my house,” etc. It doesn’t matter that the house next door is the exact same size and was built in the same year, it is almost always inferior to a seller’s house in the seller’s mind because of the emotional attachment a seller has with his/her home. The Underpriced Listing Overpricing a home because a seller wants to set the price is not the only disservice real estate agents do. On the flipside of the overpriced home, what about the home that is underpriced? While interviewing an agent, beware if they boast about recently selling a home at or over full price (in the South Florida real estate market), or that it sold in 5 days. This is actually terrible for those other sellers. Selling too quickly or at or over asking price is almost always a sign the home was underpriced. The Agent Who Has 10 Listings on Your Block You don’t want to overprice or underprice your home…so why not pick the agent who has all the listings on your block? You see their signs everywhere. If all of your neighbors selected 1 particular agent, they must be the “best,” right? They may be good, but this is not a good strategy for a seller. Let’s pretend for a moment that you choose this “best” agent and price your home at $900,000. During a tour of your home, this “best” agent gets push back on price from the buyers. Instead of reviewing all of the benefits of your home and showing the buyers that it is well priced in comparison to recent sales in the neighborhood, they decide to take the path of least resistance and leave your home to take the buyers to other homes he/she has listed down the street at $850,000 or $800,000 or $750,000 (this “best” agent does have 5, 10, 15 listings in your neighborhood that you and your home are competing with). Is the “best” agent really going to fight to sell your home? Or, just use your listing as a reason to get more listings in your neighborhood, use open houses at your listing as a marketing opportunity to attract buyers for themselves or even worse, use your home as an example of how well priced another home is in order to make a sale on that other home? Any agent who has been in this business for more than 5 minutes has seen every single one of the examples that I mention above. I see it all the time, and it no longer surprises me. But for sellers who may sell a home every 5-7 years or longer, you have to find a way to cut through the “noise” and feel comfortable with the agent you ultimately choose to represent you. You have to find an agent that you can partner with to sell your home for the best possible price. What Should Sellers Ask? How is the agent going to market your home…Personal Website? Print media? Post cards? Drone video? How much of their own money is the agent willing to invest into the marketing of your home (if you get a shaky answer to this question, or the agent is not willing to put a number in writing, beware!). Does the agent work for a brokerage that has a worldwide reach to market your home globally (get hard statistics)? Many agents, especially in the Miami and Miami Beach real estate markets, engage in practices as explained in TRD article above, mainly because there are over 40,000 agents in Miami-Dade County fighting for business, and agents are willing to tell sellers anything they want to hear just to get their listing, but this is not effective, possibly an ethical violation and just plainly not good business! The 3 P’s The three P’s of real estate marketing for MOST agents: Put a sign in the yard, Put it on the MLS…Pray that it sells! My main advice to sellers…do not work with an agent who only uses the 3 P’s for their marketing strategy! If you are interested in selling your home or condo in South Florida, please contact Michael Light, Director of Luxury Sales at Douglas Elliman, for a full marketing presentation of how Michael can market your home to sell for the best possible price. You may reach me on my cell at (786) 566-1700, directly at my office at (305) 350-9842 or via email at michael@miamiluxuryhomes.com.