The recent financial and economic turmoil across the world has changed the dynamics of the Cayman Islands’ real estate market.
The uncertainty has required sellers to be more creative when marketing their property.
“People are thinking out of the box a little more,” says Sheena Conolly, owner and broker at Sotheby’s International Realty.
The main impact of the crisis has been on pricing.
“Vendors are listening to guidance as to where the price point should be,” Ms Conolly says.
Instead of commanding a high price and having to leave the property on the market for several years, vendors are more realistic about the market.
Some are even pricing their property to drop by a certain amount a month to attract interest.
Sealed bids, in which bids have to be received by a deadline and the best offer will make the purchase, are a great way of encouraging offers.
However, despite the seller’s opportunity to put in a reserve in this sales process, sealed bids do not always represent a good sale for the vendor, in part because of the relatively high marketing costs.
Michael Joseph, sales associate at Re/Max, agrees sellers have been reducing their prices, often by unprecedented amounts.
In these cases, sellers lose their negotiating flexibility and valuations become much more important, says Mr Joseph.
Buyers, on the other hand, are becoming savvy, he says, enquiring about details like sea elevation, hurricane strapping or plumbing.
Overall, minimum standards have increased considerably as investors are looking for solid long-term investments.
In contrast to reducing the price, vendors have the opportunity to add value to the property they are seeking to sell.
Some vendors include extra items, such as vehicles, boats and toys, Ms Conolly says.
In addition, upgrades, modifications or full furnishings are now often part of the standard.
Mr Joseph has seen cases where sellers upgraded their property, with hardwood floors, alarm systems and hurricane shutters and now sell these as standard for the same price.
In other cases, sellers may even be prepared to offer financing terms.
Developers, however, are giving incentives to realtors by offering bonuses on top of the usual commission, Mr Joseph says.
Try before you buy
In a more unusual selling tactic, realtors are allowing potential homeowners to try before they buy.
Increasingly, buyers want to stay in the property they are interested in to gain first-hand experience, Mr Joseph says.
Ms Conolly believes this is particularly suitable for buyers seeking holiday-type properties.
It enables potential buyers to book a weekend getaway or a longer stay to get a feel for the property, amenities and the neighbourhood.
Should the purchase go ahead, the stay would be complimentary, she explains.
Regardless of the size or type of property, selling can be difficult in a changing market. Each case is different, Mr Joseph advises, but to ensure your property doesn’t languish on the market, it’s time to think outside the box.