FORT LAUDERDALE, Fla. – The housing market has slowly started to rebalance as less buyer frenzy and higher interest rates help soften it, forcing sellers to adjust to a more normal market.

It’s still a seller’s market, South Florida real estate agents stress, though it’s not the torrid one of six months or a year go where bidding wars were common, homes flew off the market in a matter of days and buyers waived inspection just to get into a home.

“Sellers kind of have a fear of missing out and they know the market has changed,” said Alex Platt with Compass in Boca Raton. “We are lucky that prices are still what they are today, but they just aren’t going to get into the same bidding war as they could a few months ago.”

Here’s what sellers and buyers need to know and prepare for in light of a shift in the South Florida real estate market.

Price the house correctly

Despite record-high housing prices, it’s crucial for sellers to price the home based on what it’s worth, and not on prices that they felt they could get at the peak of the market, real estate agents said.

“In the past, people were pricing it high knowing that with the low inventory and strong buyer pool, you had a great opportunity to capture a record price or someone who was willing to pay more regardless of what other sales had been,” said Dave Gunther, real estate agent with Lang Realty in Delray Beach.

But sellers can’t get away with that now since buyers are aware that there are more options on the market to choose from, so if they don’t end up buying a home at the current price, then something will come on the market soon, he added.

“We have to re-teach [sellers] how to price a home correctly,” said Jeff Lichtenstein, with Echo Fine Properties in Palm Beach Gardens. “They might want to price it at $685,000 let’s say, but the real price should be $650,000. They could get away with that in the past because there was no inventory and a buyer would see it because there wasn’t anything out there.”

Too much aggressiveness in pricing can be reflected in price cuts.

Don’t expect bidding wars

Sellers grew used to bidding wars in the pandemic boom as buyers, eager to land a home and facing stark competition, would bid up the price in order to win a home.

Those instances are far less common, real estate agents warn, and it means sellers need to be prepared to consider all offers that come their way.

“What is not happening is you are not putting a home on the market and hearing 20 bids come in and seven offers,” said Lichtenstein.

According to data on buyer competition from Redfin, 37% of offers with a Redfin agent had at least one competing offer in July. That’s down from 47.8% of offers in June and 51% of offers that had a least one other competing offer the same time a year ago.

Some properties that are on the newer side and have the qualities that most buyers want (three or four bedrooms, a pool and nice view) might face a bidding war, but it’s no longer the norm.

Buyers overall feel that they have more options and don’t have to compromise as much on the home they get. If they don’t like something, they’re more willing to walk away because as inventory comes back, so do their options, agents added.

Stage the home right and be willing to negotiate

As the housing market took off, most sellers didn’t have to negotiate with buyers, as many were willing to waive certain contingencies to get into the house. Now, buyers realize that there is a shift in the market, and sellers now have to come to terms with buyers having more power.

“Sellers need to be more open to negotiation whether it’s in price or in closing dates. Before people would waive financing or waive appraisals but now it’s going to back to the regular old market like it was two years ago,” Platt said.

It was common for buyers to waive inspection periods, but that has started to change as the market cools. According to Gunther, in the past, every third contract would have an inspection period waiver on a fast-moving property, but now he’s only seen one contract like that in the past six months.

Because of that, sellers now need to be willing to accept reasonable requests from buyers.

“Sellers need to know when to bend, especially if there are reasonable requests in the inspection,” said Lichtenstein. “If not, then the buyer will cancel the contract.”

In June, 22.1% of pending home sales were canceled in West Palm Beach, 22% of pending sales were canceled in Fort Lauderdale, while 21.5% were canceled in Miami, according to data from Redfin.

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