Selling Home in a Competitive Market?

Competition in the real estate market is always high since a plethora of companies and agencies run similar marketing strategies to sell a property. What will you and your agent do then to beat them?

Sure, you can sell your home in this sellers’ market with ease, but are you optimizing the value of your home?  Let’s look at a few ways to do that.

1. Evaluate Your Property.

Assess your property and address any repairs that you’ve been holding out on making (within reason of course). 

The first impression is crucial. By the time potential buyers enter the door, their impression is already partially formed. Their overall impression must be positive as they move through your home. So, before you list it for sale, make sure that it will leave a lasting first impression. Or at least mitigate the NEGATIVE impression as many buyers tend to look for the shortcomings and negative condition of the house as an opportunity to get a discount.

2. Consider Staging.

If you’re a busy person and don’t have time to fix up your home, then you might consider home staging. There are staging professionals or services available today that don’t cost too hire for a few days while buyers are coming in and out of your home.  Avoid leaving your home vacant if possible.

3. Establish an Effective Online Market Strategy.

Advertising your property online is one of the most effective ways to attract more people or clients that best suits you.  If you hire a real estate agent, they will do the marketing but do not leave it all in their hands.  This is your property and it is to your greatest benefit to secure the highest bidder for your home.  So when you or your agent place the listing online, be sure to share it with your friends, group Facebook pages and anyone that will listen. 

4. Acknowledge Constructive Criticism.

When you are into selling a house, look for ways on how to improve your listing or the house itself. The first couple of days will tell you much about your property as feedback will start trickling in.  It’s important to stay as objective as possible as buyers are going to highlight more of the ‘bad’ than the ‘good’…especially as they are asked why they did NOT put an offer on your home. 

5. Price Appropriately.

Pricing a home takes the following into consideration: past sale statistics, competition's pricing, industry trends and specific home condition.

Don’t overprice your home as that could throw off your potential buyer.  The only thing you accomplish with overpricing is staying on the market longer and getting sub asking-price offers.

Yes, presently we are in a sellers’ market and you have buyers literally lining up at your doorstep to court you and make an offer on your home.  But real estate is cyclical and sellers’ markets can quickly turn into buyers’ markets.  Please reach out to Echo Real Estate Advisors at www.echorealadvisors.com or (972) 695-3676 for any questions about this topic or any other real estate inquiry. 

Changing Jobs & Getting a Mortgage

Yes, let’s go ahead and get it out of the way.  Changing jobs CAN affect your loan approval, but that does not mean it MUST! Communication is extremely important to be able to pull this off and as a rule of thumb, if you are increasing your income (or maintaining the same income) in your job change, you won’t be affected too much.  However, be prepared to substantiate all the changes and previous work experience along with income.

At the end of the day, lenders want to feel as comfortable as possible that you will be able to repay the loan.  Lenders are not out there seeking reasons to say “NO” to you, so don’t give them preventable reasons to!

Let’s look at some pitfalls and solutions to navigate the mortgage & change of jobs scenario.

Changing Jobs Before Getting a Mortgage

A promotion is a very common reason an employment status changes.  Lenders want to see proof of the promotion and, if possible, the check stub confirming the positive financial impact said promotion had.  Where applicants get into trouble is seeking a loan approval with the expectation of a promotion (i.e. on something that has not happened yet).

A lateral move or better benefits should also not affect your application, especially when they are accompanied with an employment contract.  An employment contract supersedes an offer letter as there are higher chances that the clauses within will materialize. 

Keep in mind, that commissions may not be included in this change of job scenario as a new role is unproven in the eyes of the lender.  In other words, only because you were successful in selling medical devices does not mean you will be successful in selling industrial equipment. 

Job Changes That Affect You Negatively

The following scenarios negatively impact you in a lender’s eyes:

  • Lateral move with less pay
  • Change from full-time to contractor
  • Major industry change
  • Frequent career changes
  • Length of unemployment

The amount of income is important of course but lenders are seeking patterns and stability at the end of the day.

Job Relocation and Mortgage

If you need to move, then there is a bit more balancing that occurs: selling present home, finding a desired area to live, balancing the new position, buying a new home, etc…

From a qualification perspective, staying in the same income bracket and remaining in the same industry still holds true.  Again, the picture a lender likes to see painted is one of stability and avoiding uncertainty as much as possible.

One strategy, if your income levels sustain it, is buying a home in the new area without changing jobs.  Lenders verify employment during the loan application and then just before closing.  So, if you have that employment up through closing of the new home in the new area, lenders won’t have many questions.  Again, this is all contingent on you being able to financially sustain two living quarters (apartment or already have a mortgage in the place you are moving away from).

If you are in the situation where you must sell BEFORE purchasing a home in your new area and you must make the employment switch, the suggestion would be to not try and juggle everything at once.  Take you time to sell your home and even negotiate a lease back option to give your family enough time to move.  Find an area in your town that you ‘think’ you would like to live in and seek a short-term lease on a home or find an extended stay apartment for you and your family.  Spend at least 30 days in your new location before seeking a more permanent place.   Remember, you have a new job that will require your attention, if you have children they will be needing some time to adjust as well and the family as a unit will be testing out the areas where life will happen outside of the home. 

While one could, in theory, balance the sale of a current home before purchase of another with a new job, it’s advisable to avoid it if possible.  Again, can it be done?  OF COURSE!  However, your stress levels will be greatly affected.

Is this a Sellers’ Market or a Buyers’ Market?

Maybe you have heard a realtor say it, saw it in a video or even asked this yourself, “what is the inventory of homes on the market right now?”  Okay…maybe it wasn’t stated in that exact way.  Other ways of asking the question could be:

  1. Is it a sellers' market?
  2. Is it a buyers' market?
  3. Is now the right time to buy a home?
  4. Is now the right time to sell my home?
  5. What is my competition as a buyer and a seller?
  6. Has the housing market peaked?

One of the key indicators to monitor is the Housing Months of Inventory for a region.  For our purposes, we will dive into the Dallas/Ft Worth region as that is local and where many real estate experts focus on given its rapid growth and stability.

But let’s back up for a few minutes and ask, “what exactly is the housing months of inventory and how is it calculated?”  The Real Estate Center at Texas A&M University “estimates the housing months of inventory by dividing the number of current listings in the Multiple Listings Service (MLS) by the average number of sales per month during the prior 12 months.” (recenter.tamu.edu) 

In other words, months of inventory presents the supply of homes for sale in relation to the number of purchased homes.  So when the math is done, the result gives the number of months it would take to sell ALL properties presently for sale.

Okay…so what does this all mean and what should it be compared to?

  1. “Buyers’ Market” Over 7 months  (Demand for housing is LOW and prices are likely to FALL)
  2. " Balance" Around 6.5 months
  3. “Sellers’ Market” Less than 6 months (Demand for housing is HIGH and prices are likely to RISE)

Now, of course, the numbers above are historical and based on averages.  I don’t want to give the impression that if you are a buyer, you should wait until the supply is at least 6.5 months to buy because you will be waiting a while…especially in Texas!  The last time Texas was above a 3.5 month inventory was back in 2013!

 https://www.recenter.tamu.edu/data/housing-activity#!/activity/MSA/Dallas-Fort_Worth-Arlington

https://www.recenter.tamu.edu/data/housing-activity#!/activity/MSA/Dallas-Fort_Worth-Arlington

So yes, we are living in a ‘new norm’ at least for the time being.  We are seeing historically low inventory numbers and low-interest rates that have remained with us long enough to consider this period a 'normal' period.   How long will this be sustained?  Not sure...but there is enough value in seeing what the market is doing today, so you have a framework to work from when you consider entering the real estate arena. 

 https://www.recenter.tamu.edu/data/housing-activity#!/activity/MSA/Dallas-Fort_Worth-Arlington

https://www.recenter.tamu.edu/data/housing-activity#!/activity/MSA/Dallas-Fort_Worth-Arlington

This article was written to increase awareness and give consumers the power of data to see what the housing market is doing.  Of course, this is not meant to keep you on the sidelines if you are a buyer or a get you into the market if you are a seller. 

If now is the time to buy for you personally, go out there and look! (Access to MLS) You may find the home of your dreams and these statistics are rendered meaningless to you.  Or if now is the time that you need to sell your home, start the process and get a free Comparative Market Analysis for your home.  (Run Quick CMA

You are under no obligation to buy or sell a home but having an appropriate expectation of what the real estate market is doing provides great value to you.  As an educated consumer, you avoid being swayed by the real estate signs, the real estate agent billboards and make it a more objective decision for your.  But let's be real...buying a home IS a subjective decision.   

How to WIN a bidding war...(Four Essentials)

Select the Right Agent

Find someone that is responsive, attentive to YOUR needs and is able to offer sound advice in multiple offer situation.  Seek experienced agents that are used to handling these types of negotiations.  

Get Pre-Approved 

This is something you should do in ANY market.  Dream homes do not come every day, so you should be ready to act when you do find the ideal home.  If you do not have a lender, your real estate agent should point you to several options before the search begins. 

Drop Unnecessary Contingencies 

Sellers are used to getting their way, so don't give them a reason to say NO!  There are some tiny items that you can live without in the long run, so don't step over dollars to get to dimes. 

Offer more than list price

This is not something you want to hear, but is for your own good.  In a multiple bid situation and in an insanely hot market, it's a MUST to offer above list price.  Now of course, this does NOT mean to write a blank check.  Speak with your agent about your financial capabilities and keep yourself accountable to spending what you can afford.