I meet most of my buyers for the first time when I pick them up at their hotel. Our day starts when they enter the car and introduce ourselves to each other. We share some small talk on the way to our first showing. After we have seen two or three houses and their resistance to me as a salesman starts to diminish, they start to ask a lot of questions about issues Key West - how long I have lived here, what do I do when a hurricane comes to Key West, what do I think of Cuba opening up. Then they ask about the cost of owning a place here - how much does insurance cost, what does it cost to renovate a house, are there good contractors here, why is a seller trying to sell his house - all questions that could have a myriad of answers. I'm not so sure that these buyers really care about the answers as much as they may be sizing me up. Or to put it differently, can they trust me.
Many of my buyers come to Key West with notebooks filled with printed copies of MLS listings accompanied by fact sheets they prepared. The reason these people can afford to spend $500,000 or more for a second home is a testament to how successful they have been at life. Super-achievers don't give money away. They are methodical and need to verify the worth of any property. I think that some buyers rely too much on data as a justification not to buy a property because the metrics don't work. Let me share a couple of examples.
TOO SMART FOR THEIR OWN GOOD Back in 2010 and 2011 I worked with a couple who wanted to purchase a B&B. The gent had an MBA from the Wharton School of Finance. He shared that fact frequently - not so much to remind me how smart he was, but by creating voluminous business plans projecting how the business would fare five to ten years down the line. He used his data to prove that none of the properties was worth the asking price. Over 18 months the couple made offers on several properties, but were not able to purchase any. I looked back at the MLS to compare their offers to actual sales prices. All of the guest houses sold at higher prices than the offers they made expect one. And it did not sell. They refused to negotiate beyond what his analysis "proved" the value to be on each property. They decided to buy a small place in northern Florida where the weather is colder, the prices are lower, and the income is not as great. They settled for less.
A lot of potential buyers do the same thing. And so do a lot of locals who talk to strangers and give them an earful of opinions. I had a lady Realtor from up north who sought the counsel of her hairdresser to tell her what he thought about properties I showed to her. Not making this up, folks. She bought and sold three properties from me, but she listened to him.
CAN'T KEEP A SECRET Another buyer who bought a big house from me several years ago recently retired from a really big Wall Street firm. He decided he wanted to move here and live here full time He was from New Jersey and approached every investment with suspicion. We looked at many possible properties and found a few that interested him. Nothing ever worked out. That was until a specific property became available. He made a substantial cash offer on this property. When I learned there were several offers on the table, I told him his offer was too low. I also told him to never talk to anyone in town about his offer. He couldn't help himself. He told me he met a guy in a bar and the two started to discuss real estate. I wasn't there and don't know all that was said except that the guy he was talking to bought the business my guy made the offer on. Men should not cheat on their wives nor their Realtors. They shouldn't, but they do.
BUDGET SHOPPERS Some buyers set a budget (price limit) on how much money they are willing to spend. For some reason $500,000 is now the typical budget of most of the people who contact me about buying a home. I realize that you can buy a pretty fine house up north in America for $500,000 or less. Many say they are willing to so some work so that they can build the house they want. They probably have watched too many shows on HGTV which promote that kind of thinking. These buyers have no idea how difficult it is to build or remodel here. They would save money by spending a little more up front or by looking in other less expensive parts of town or a few miles outside of Key West.
NICKELS AND DIMES A few months ago an agent in my office was a couple of days away from the closing of a pretty expensive home. Then the cash buyer announced he wanted the house delivered completely furnished. This did not go over well with the seller who had things all boxed up and ready to go. Threats to walk away and sue and so forth were made. The seller finally said okay you can have my sofas, chairs, beds, lamps, artwork, dishes, bedding, etc. But it was too late. The deal failed.
|1030 Fleming St 2009|
|1030 Fleming St 2016|
RISK AVERSE BUYERS Risk averse buyers are often very analytical personalities who favor a known return which can be relied upon for years to come versus a potentially greater reward with a potential for loss. Some of these buyers approach buying a home as an investment. I had one buyer who made offers on several properties over the years. He had a bunch of cash with which to buy the perfect dream home - a place on a good street with a pool and parking. He still has the cash that produces a 5% tax free return each year. The Key West market has grown way beyond his willingness to buy. He gave up his dream so that his heirs can enjoy his cash in their future.
LOCATION VALUE Sixteen years ago a friend of mine who was a real estate developer from Denver came to Key West looking to find a place to retire. He considered houses in Old Town and Casa Marina areas. I told him not to buy a couple of different locations. He pointedly told me he thought I overstepped my job as a Realtor. He said buyers can figure out for themselves what works for them. But I saved him from buying a vacant lot which had been on the market for years and that had not sold because of its location. I convinced him to buy an existing property just east of the Casa Marina. He tore down the original house on a beautifully landscaped lot. He built a new house. He ended up getting divorced. He moved away a million dollars richer. Someone else bought the lot he liked. They build a huge spec house there that took a long time to sell. The person that bought put it back on the market soon afterward. It has sat vacant and for sale for years. We all know this house and please don't comment on it. Location does matter. Bad locations matter a lot.
A lot of potential buyers refuse to look at houses located near the Key West cemetery. Some of the best deals in town are for houses that are in this area. I don't know what they expect to see.
If you are looking to purchase a place in Key West please call me, Gary Thomas, 305-766-2642 or send me an email at email@example.com I am a buyers agent and a full time Realtor at Preferred Properties Key West. I have been representing buyers and sellers here since 1996. I have the knowledge and experience to help you find your place in Paradise.