If you’re interested in real estate or have considered buying or selling a home recently, you’re aware that the market is red-hot right now. Thanks to record-low interest rates, slow new construction growth, and skyrocketing demand for homes, the need for housing is exceeding supply, creating what’s referred to as a seller’s market.
In a seller’s market, those planning to list their homes for sale are at an advantage, and may be wondering whether a real estate agent is necessary. Some may be under the impression that in a busy market crowded with buyers, the homes practically sell themselves. Why utilize an agent or pay full commission?
In reality, real estate agents bring immense value to your home sale regardless of the market conditions. From sourcing the best buyer pool to managing the mortgage and title process, and all the stages in between, home sellers need an experienced real estate agent to fully capitalize on the advantageous market.
Explore some of the benefits of working with a real estate agent, and why it’s essential to do so even in unprecedented market conditions.
1. Experienced agents will bring you the best buyer pool.
If you want to take advantage of the seller’s market conditions, you’ll need a large pool of buyers to drive competitive offers. As the home increases in its price points, the pool of available buyers actually shrinks. Even though luxury home buyers have been more active recently, and are drawn to Fort Worth’s housing market, their numbers are still fewer than say, the number of buyers in the $200-$300k price bracket.
By working with an experienced agent with years in the industry and backed by a trusted brand name, you will ensure that your home is fully-booked with showings in the first days after the listing goes live. Excitement around a listing positions your home as competitive, which spurs buyers to make an offer faster than usual.
Even in a seller’s market, professional real estate marketing is the best exposure for your home. Marketing is what drives the best buyers to schedule a showing. In the era of remote home showing, and with more buyers purchasing homes sight unseen, high quality marketing is a must.
Working with an agent means you’ll reap the benefits of the best marketing tactics possible, including exceptional photography and videography, virtual tours, and top-notch staging. Thanks to your real estate agent’s partnerships with leading media outlets and the subsequent brand exposure, you’ll maximize the reach of your listing, building you the best possible buyer pool.
2. They will position your home to maximize its value.
In a seller’s market, you think it’s possible to sell your home quickly without putting in any extra work or preparation. But ask yourself: do you want to get the maximum value for your home? If so, working with an experienced real estate agent is your best bet.
Home staging is proven to lead to higher offers. In a market where buyers will likely be competing with each other to purchase a home, you can maximize the received offers with a little extra staging and effort. For some, this may just be minor changes that improve cosmetic aspects of your home. A touch-up to the paint, new landscaping, or cleaning windows make the home as attractive as possible without a significant budget spend or making any structural changes.
For others, positioning the home may require a full-service upgrade through full-home staging or renovation. In this case, your agent can work with their network of experts to bring the most value to you while making changes. Regardless of the scope of work needed to prep and stage your home to sell, your real estate agent will consult with you on what can be done to boost home value, making the most of your property before showing it.
According to an article on the benefits of home staging in REALTOR Magazine, buyers consider the living room the most important room to stage, followed by the master bedroom and the kitchen. If staging the whole house is out of the question, remember that staging just a few spaces will have a greater impact than doing nothing.
The National Association of Realtors® (NAR) Research Group also reveals some important insights regarding the impacts of staging in its 2019 Profile of Home Staging report. According to the report, 40% of buyers’ agents said that home staging had an effect on most buyers’ view of the home, and 83% of buyers’ agents shared that buyers were more easily able to visualize the property as a future home when it was staged.
The report also revealed the most common home improvement items agents typically recommend to sellers: decluttering the home, a full home cleaning, carpet cleaning, and removing pets during showings. These are inexpensive and relatively quick fixes that can help sellers receive better home offers.
Keep in mind that while your agent can give you some pointers on staging, they’ll also help to position your home at the best price point to maximize offers. Even though inventory for homes is low, if you still price your property too high in a competitive market, it’s still possible to scare off potential buyers. Your agent will advise you on the best competitive, yet fair price at which to list your home, increasing the likelihood of multiple offers and potential bidding wars.
3. They can guide you through a multiple-offer situation.
While it feels wonderful to have multiple offers on your home, it can also be a tricky situation to navigate, especially if there are more than two offers on the table. Experienced real estate agents are well-versed in this process and can guide you with the appropriate strategy to handle multiple offers with ease.
Your agent has the power to ask for a best and final offer from all parties, and will then work with experts to objectively compare the terms, look at all contingencies, buyer financing, and potential closing dates. Especially in a competitive environment, offers may include some unusual clauses.
While the ultimate decision on which buyer contract to accept is yours, your agent will be there to advise you on choosing the best offer overall for your situation. Through the comparison of the purchase offers, you may find the best offer might not be the highest price.
Additionally, it’s important to keep in mind that Texas allows for back-up offers. Your real estate agent can guide you through the process of securing a back-up offer. This way, if your first contract falls through, the back-up offer ensures you’ll still have a buyer and are set up for home-selling success.
You may have heard about escalation clauses being used in other states. But what exactly are they, and how can they affect your home sale?
An escalation clause lets potential homebuyers who extend an offer to increase their offer price in case they are outbid. However, what an experienced Texas real estate agent will know is that it is against the Texas License Act and Real Estate Commission rules to add any language into offers and contracts that makes the purchase price vary based on any outside factors. Your agent can protect you, the seller, from any potential escalation clauses or other language that can potentially complicate your home sale.
4. Your agent will help you get through the Texas Option Period.
Another benefit to working with an experienced real estate agent, even in a red-hot market, is that they’ll help you get through the Texas Option Period.
What exactly is the Texas Option Period? According to HAR, “the option period in Texas is a specified number of days set forth in a real estate contract which allows the buyer to terminate the contract for any reason. This option, when written into a real estate contract, creates the right to terminate the contract within a certain number of days for a specified price without risking the earnest money deposit.”
While the majority of home sales do close, (the rate of a failed pending sales was only 3.9% in 2016,) working with an experienced agent gives you the best chance of avoiding a potential buyer falling through thanks to their expert guidance.
Agents are privy to all the reasons why homes fall out of contract, including bumps found in the option period. It can happen to any home seller! Your real estate agent will advise you on ways to navigate this period and avoid any potential speedbumps. Your agent can also protect you from unreasonable buyer requests during the option period.
5. They are experienced in managing the mortgage and title process.
Even after the option period ends, numerous issues can arise that can impact the successful sale of your home. This includes the mortgage process for the buyer. Your real estate agent is well-versed in the ins and outs of buyer financing, giving you the best chance at choosing the offer that is the least likely to fall through.
Some of the common issues that can surface during the mortgage application process includes the appraisal being too high. Why does this happen, and what does it mean?
In a competitive market, it’s not unheard of for buyers’ offers to exceed the appraised value of the home. In this case, the buyer does have options, including negotiating the price down, or seeking a second opinion on the appraisal. Your agent can help navigate this potential scenario, giving you the best chance for seller success.
What if buyer financing fails? This is another common pitfall that can arise during the home sale process. If you are working with an experienced real estate agent, they will help to identify any red flags in terms of buyer financing. Look at how the buyer intends to pay for the home to select the most qualified buyers. Even after taking this precaution, financing can still fall through. Your agent will guide you through next steps.
Title issues can also delay or halt the sale of a home. While title issues are often associated with unpaid property taxes, other problems uncovered in a title search can impact the home sale. An encumbrance is a legal item on a property that can restrict its usage, impede on its enjoyment, or diminish its value, such as a conservation easement or survey dispute. While this doesn’t necessarily prohibit passing the title of the property to another owner, it can cause issues with the sale of your home. If there is an encumbrance on the property that limits the buyer’s planned use or enjoyment of the property, this can lead to the cancellation of the purchase sale agreement.
Liens from unpaid contractor work are another discovery that may hold up the title transfer process.
Regardless of the cause, know that title issues must be resolved by the home seller before any contract can move forward. Working with an experienced real estate agent can be a major benefit when trying to navigate issues with the home title. They will help you address these title issues and understand the best course of action to move forward.
Is Fort Worth in a seller’s market?
As with many US markets at present, Fort Worth is in the midst of a red-hot seller’s market across all price points. This is especially apparent when reviewing figures and statistics from the Briggs Freeman Sotheby’s 2020 Annual Review of Market Moves. This report reveals insightful data regarding where the market stood at the end of 2020, as well as key information about market trends throughout 2021.
When looking at Q4 of 2021, homes in the $500,000 to $700,000 price range had an increase in closed sales of 24% year-over-year.
Homes in the $700,000 to $1M price range had an increase in closed sales of 64% year-over-year. For homes between $1 million and $2.5 million, closed sales were up 74% over the prior year. Closed sales for homes above $2.5 million increased an extraordinary 567% year-over-year.
When reviewing single-family home sales in the Fort Worth luxury real estate market, data for the most part was trending upward.
New single-family home sales in Westlake had an average sales price of $1.6 million, with a year-over-year increase of 234%. In Colonial Hills, sales prices were down 1% to $684,000, but closed sales rose 60% over 2019. In Mira Vista, closed sales prices increased 5% to an average of $995,000, with sales up 58% year-over-year.
Rivercrest had a massive growth in sales prices increasing to an average of $5.59 million. However, sales declined 50% compared to 2019. In Westover Hills, sales prices were up 45% to an average of $1.25 million, with sales seeing year-over-year growth of 57%.
The March 2021 Housing Report published by the Greater Fort Worth Association of Realtors (GFWAR) provides insightful data into the unprecedented seller’s market that’s currently taking place. The market trend is for multiple offers on properties across price points.
According to the report, inventory for Fort Worth homes for sale dropped to less than one month as demand for houses continues to drive up prices and competition amongst buyers. Tarrant County has a 0.8 months’ supply of homes, which is roughly three weeks. Active listings are down 55%. Keep in mind this is the first year-over-year comparison from the start of the pandemic-induced market slowdown.
The report also reveals data that closed sales in Fort Worth increased 6.8% in March, after declining 8.1% in February 2021. Homes spent an average of 30 days on the market, 12 days less than in March 2021.
Tarrant County’s median home price in March 2021 was $275,000, up 17% from March 2020. The average days from offer to close was 37. Combined with the average days on market, that’s 67 days from list to close. That is a rapid pace of activity.
Preparing to sell in a seller’s market
The reality of selling in a seller’s market is that working with an experienced real estate agent will help you to maximize your home sale. While it may seem appealing initially to sell your home yourself while inventory is low and buyer demand is high, the value that your real estate agent brings to marketing, real estate industry knowledge, and managing all aspects of the sale is worth more than a potential commission you’ll pay.
Let Chicotsky Real Estate Group be your Fort Worth Real Estate Guide. From sourcing a great buyer pool, to offering insight into staging and maximizing home value, our team will help you navigate the intricacies of paperwork, contracts, titles, and more. The benefits you’ll reap from working with an experienced agent will enable you to truly get the most out of your home sale.