Disclaimer :: This post is part of an editorial series, “Money Matters,” and is sponsored by Kayla Ranger of HBS Real Estate.
For most people, purchasing a home is the largest, most significant investment they will make in their lifetimes. Not only does a house come with a big price tag, but it also is the place we call “home,” needing nurturing and care just the families we raise inside its walls. So, it makes sense that whether you are buying or selling a home, you want to make the wisest and most financially solid decisions. Here’s what you need to know if you find yourself on either side of the house market right now.
The Dallas/Fort Worth housing market is red hot right now! The Texas Association of Realtors® quarterly report claims that statewide, there are 3.3 months of inventory, compared to the Dallas/Fort Worth market, which only has 1.8 months of inventory. Translated for non-real estate professionals: There’s not near enough inventory of homes for sale to last our market for more than 1.8 months.
This creates an unbalanced market, resulting in sellers getting top dollar for their homes, and buyers often finding themselves in a “bidding war” with other buyers. In terms of getting the best “bang for your buck,” it seems obvious that, if you have been thinking about selling your home, this is the best market to do so! A seller’s market can help a seller to realize a significant profit, or instant equity, in their home. If you’re a buyer, your best bet is to have a real estate professional by your side when preparing to write an offer, making sure that your offer is both generous and competitive. This doesn’t necessarily mean you should offer more than asking price, but your Realtor will be able to guide you through the various ways in which you can be competitive without spending more than the home is worth.
Another, perhaps more disconcerting effect, of the market trends has resulted in increasingly higher tax bills for Fort Worth homeowners. The Tarrant Appraisal District, TAD, has estimated that the limited number of homes for sale on the market, will cause home valuations to steadily increase. Whereas tax rates in previous years have increased roughly 5 percent per year, 2017 tax values have increased, on average, 14-16 percent. That’s a huge difference and, for many homeowners, enough to take them to the appraisal district to protest. Unfortunately, TAD is required to assess home values based on market value, so when supply is low and demand is high, market value increases, and so does tax value. Fortunately for homeowners with a homestead exemption, there is a cap in place, which prevents the appraisal district from increasing your home’s values by more than 10 percent per year.
XTO, a large oil and gas company based out of downtown Fort Worth, recently announced its plans to relocate up to 1,600 of its employees to the Houston suburb of The Woodlands, with 1,200 relocating by mid-2018, and another 400 relocating in 2020. It’s been suggested that once XTO employees and their families list their homes, the housing market will begin to balance out and become more stable. At that time, buyers will have more options and more negotiating power.
In the meantime, there are things that sellers should consider when preparing their house to go on the market to help enhance curb appeal and increase the desirability of their home. This could include making sure all light bulbs are in working order, all clutter is cleared away (you’re going to have to pack it all up anyway), or adding a pop of seasonal color to your flower beds.
If you’re a buyer, one thing you can do to make yourself more appealing is to get a pre-approval from a qualified lender prior to going house-hunting. Utilizing a local lender where possible is ideal, it is often more familiar with the local market, and have a team of local appraisers, etc., to streamline the home-buying process. When you find the home of your dreams, you have to be ready to act quickly . . . sellers like to see that you have been pre-qualified to make the purchase prior to accepting your offer!
Another great idea for a buyer is to write a letter to the seller and include a photo of your family. Oftentimes, buyers can “win” the bidding war by simply pulling on the heartstrings of the seller, so showing them who you are and why you would love to make this your family’s home can sometimes be just what’s needed to turn things in your favor!
Kayla Ranger is a licensed real estate agent with HBS Real Estate. She holds a bachelor’s degree in criminology from The University of Texas and a master’s degree in forensic science from Saint Leo University. Kayla is a member of the National Association of Realtors.
Prior to pursuing a career in real estate, Kayla worked in human resources for the oil and gas industry. Kayla has a true passion for helping people attain homeownership and making their dreams come true. Kayla’s down-to-earth style combined with her knowledge of the local market, make her uniquely qualified to connect people with their dream homes.
Kayla was born and raised in Texas and has made Fort Worth her home for the last 10 years. She is currently awaiting her dream home in Walsh Ranch. She lives with her husband and her two children.