Nearly 75,000 people moved to North Texas in 2020, as supply chain issues and soaring wood costs have slowed construction of new homes.
“A lot of people, when they think of buying a house, they think of what they see on TV: that we are going to choose a bunch of them, the one we prefer is the one we are going to jump on and hopefully win, ”said Jared Tye, McKinney-based real estate agent.
Instead, buyers experience a rapidly changing housing market where mid-priced homes are contracted within days, or even hours, after they hit the market.
“It’s really wild,” Tye said.
Falling inventory, rising prices
North Texas Real Estate Information Systems found that median home selling prices rose 26% from last May to $ 332,573. May 2021 prices are up 23% from May 2019.
Jim Gaines, economist at Real estate research center from Texas A&M University said several factors are impacting prices in North Texas, including population growth, pent-up demand from the pandemic, and future demand from buyers who are ramping up their plans to buy a home now.
“In addition to the people who are moving to the area, people who already live here, who might have considered buying next year or the year after or the year after, they are doing move that forward, ”Gaines said. “We are seeing some surge in future demand as interest rates are low and before prices are rising more than they are already rising.”
The low housing stock is also an important factor.
“Being with A&M, I can tell you in Aggie-speak, you don’t have one,” Gaines said.
North Texas Real Estate Information Systems estimates North Texas has about a month’s supply of homes for sale.
Taylor Walcik of the MetroTex Association of Realtors explained that a healthy inventory is considered to be six months.
“People ask me all the time, ‘Is this a bubble? How long is this going to last? ‘”Walcik said.” My answer is,’ It’s not a bubble, it’s just a case of supply and demand. ‘”
North Texas agents share Strategies
With many homes seeing multiple offers, agents said they’re telling buyers to start looking under their budget.
“What we tell our buyers is to take a step back. If you want to end up at $ 400,000, let’s maybe start looking 10% below so we can explain the bidding war, ”Walcik said.
Walcik said the buyers are also doing what they can to soften the deal for the sellers, including offering to cover the seller’s closing costs or shorten the option period.
In a recent deal, Tye said the buyers promised, in writing, to repossess the house largely as is.
“We’re doing an inspection just to look for major issues,” Tye said. “We said, ‘If we don’t find any defect greater than $ 5,000, we won’t ask for any repairs or concessions. “
Tye said he would not recommend that buyers or sellers skip an inspection altogether.
Agents said buyers must have a bank pre-approval letter showing they are approved for that price.
Some buyers add an escalation clause that automatically matches other offers that arrive later.
Real estate agent Sally Arevalo said the main thing for buyers is to show the seller that your deal can go through.
“Just try to get in as clean and strong as possible, close quickly,” Arevalo said.
If a seller is also looking for a home, they tell buyers to consider offering some flexibility.
“If they want a sale-leaseback offer to do a sale-leaseback if you are able to give the seller up to a month or two to stay in the house while they look for a place to live,” said Arevalo.
Cash offers are also more often at stake, agents said.
“There are a lot of investors who buy houses for money. So how do you compete with this? I would say a lot of it is just finding as much information as you can on the front end, ”Tye said.
An all-cash offer may not be the highest or best offer for the buyer, and all-cash offers are not necessarily the norm for every home that comes on the market.
“There are cases where all the deals are funded,” Tye said. “It’s not a deal where everyone has this crazy, high cash supply, but they’re definitely more common than they’ve been in the past.”
Do “love letters” help or hurt?
Some buyers add a personal touch by writing what is called a “love letter” with their offer. It is a personal note from the buyer to the seller.
Arevalo said if a buyer wants to write a letter, she tells him to focus on why he loves the house.
“Talk about the house, what you like about the house, if there is anything in common when you walk around the house,” Arevalo said. “Congratulate them on what they have done with the house.”
“No photos. You have to be careful how it’s done,” she added.
The National Association of Real Estate Agents has published advice warning that love letters can be a handicap. Information in a personal note may allude to a buyer’s race, religion or family status, which can lead to bias in a seller’s decision.
Arevalo said he saw mixed results in love letters.
“I’ve had salespeople who wanted to watch them and others who didn’t care and said, ‘I don’t want to be influenced by this. These are just numbers, ”she said.
“You have to make decisions on the fly‘
When the Huyser family started looking for a home earlier this year, they knew the market was pretty hot in North Texas.
“I didn’t expect them to leave the market so quickly. You hear about it, but it’s another thing to witness it, ”said Chori Huyser.
“There was a house that we went to see and they were under contract within 24 hours,” said Nathan Huyser.
The family was searching the Collin area and Denton County – eventually closed a house in late March after three months of searching.
They said they were happy with the house they bought and felt their offer outperformed others for several reasons.
“We offered between 5 and 10 [thousand dollars] more than [the asking price] then we got creative with that evaluation, ”said Chori Huyser.
Their real estate agent, Tye, explained that the Huysers included a clause in their offer that promised to dip into their savings if the bank valuation was a certain amount below the sale price – assuring the seller that their buyers were serious. about the conclusion of the case.
“They can see that we are confident, that we have done our research, that we are not just trying to put out a bid to win a first contract. We’re actually going to shut down for them, ”Tye said.
The Huysers also said they wrote a love letter. The vendors responded to one and left it with the Huyser family to be found in the house after receiving their keys.
“It was really, really kind and cool,” said Chori Huyser. “They had referred to things I had written in the letter.”
“They took the time to read the letter and it made a difference. I really believe it, ”said Nathan Huyser.
Their advice to other buyers?
Find a real estate agent you trust, be patient, and don’t fall in love with every home you see.
“It’s okay if that doesn’t happen now and know that coming in.” I have the impression that there is an emotional attachment, there is something to be frustrated about. It’s high, it’s low, it’s unpredictable, ”said Chori Huyser.
“This market is so fast that you have to make decisions on the fly,” said Nathan Huyser.
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