The real estate market is ever changing for buyers, sellers, and investors. With pullback from everyone, you need to make sure you have the right strategy when approaching the current market.
Should you be offering concessions if you are a seller? Should buyers still be staying in with current interest rates?
What can you be doing to sell your house faster? And what can we expect from the Texas real estate market in 2023.
We’ll dive into how the current real estate market is affecting buyers, sellers, and investors with Ellen Steele, a Realtor with ListingSpark that has had over $10M in sales in the last 12 months.
- How buyers, sellers, and investors are adjusting to the current real estate market
- Why buyers should be careful about pulling back because of rising interest rates
- What should first-time home buyers be doing first when looking to buy a house
- What we can expect to see in the 2023 real estate market in Texas
- What the process is like today for business owners buying a home in Texas
- What’s the craziest story Ellen has seen after being a real estate agent for five years
- Where to look for the best first-time home buyer perks
- How sellers can make their listing more attractive in the current market
- Here’s the strategy sellers should consider when coming up with the right list price
- Follow ListingSpark on LinkedIn, Twitter, Instagram, Facebook, and YouTube
- Connect with Aaron Jistel on LinkedIn
- Connect with Ellen Steele on LinkedIn
[00:02:26] How buyers, sellers, and investors are adjusting to the current real estate market
As the market shifts back to the buyers, sellers are having to make more concessions. Many buyers are adding up projects that need to be done and taking that off the list price. Sellers need to focus on taking care of any minus points to maximize their sale price. Even though there’s been pullback from buyers, sellers, and investors, first-time home buyers have found this market great to enter.
“What we’ve seen when buyers are coming in is that they are taking any projects that need to be done, anything that they see, and they’re just subtracting that off of the list price. So pricing a house, if it’s not perfect with amazing features, updated white kitchen, beautiful countertops, buyers have been offering less which is frustrating for sellers.
I’m recommending to my sellers to complete any projects that you have to do, painting, trim, kitchen, you know, light updates in the kitchen if you can. Bathrooms are also super important. Outdoor living is also a big area that people are looking at right now too.”
[00:08:11] Why buyers should be careful about pulling back because of rising interest rates
It’s important to remember that no one knows exactly what rates will look like in the future. Backing out of the market because you expect a lower rate in the future is also a gamble. Rates might not go down for a while so if you have a rate that you are comfortable paying, consider it because rates might go even higher and never come down to your current rate offer.
“I look today and we’re at like 7.16 or something like that. I sold a lot of houses at 7% in 2005 through 2007 or six and a half percent and that was fine.
Everybody was completely okay with that. Now, prices were a lot lower, but I mean, we’re gonna get to a point where, you know, five and a half or even 6% is gonna start to look good. And we’re gonna get out of that mode where everybody is still thinking about that three or three and a half percent rate that we had a year ago that’s probably not coming back anytime soon.
So I think it takes a good kind of three to six months or even longer for everybody to adjust to a changing market.”
[00:11:42] What should first-time home buyers be doing first when looking to buy a house
If you’re a first-time home buyer looking at the market, try and get in contact with a lender early. They can help you understand what you need to do to have the financial resources and get the most budget for buying your first home. You don’t need to purchase immediately but working with a lender can help you properly plan for what might be your biggest purchase to date.
“My first recommendation for anyone who even has in their mind at all to buy a house is to talk to a lender. Even if you think two years from now you wanna buy a house, talk to a lender. They will help you create a roadmap for yourself. You know, put this amount of money each month into a savings account, work on this part of your credit, it would be more beneficial to pay off your credit than to do something else.
Even things like setting your credit card monthly payment date to the 10th of the month or something. There’s a day of the month that you can pay that helps boost your credit score. They know all of these tricks that can help get negative credit items off of your credit report.”
[00:16:26] What we can expect to see in the 2023 real estate market in Texas
The Texas real estate market is still a strong market despite the current pullback. Lots of companies and people are still moving to Texas. Also, in general no matter the market, people’s lifestyles will always be changing which means their housing needs will change too. Expect a rebound in the market at some point but also know that people are still looking today.
“There are still people moving here. There are still jobs being created. These people need a place to live when they get here. So, I think that we’re still gonna see steady buyers moving into the market for rentals.
People are still needing to find a place to rent. I was just out showing rental properties this morning to people moving from out of town. So people still need a place to live, so I don’t think that it’s necessarily gonna come to a stop.”
[00:21:53] What the process is like today for business owners buying a home in Texas
The home buying process is more complex if you own your own business, especially if you are a first-time home buyer. You will need to present a strong business plan to lenders and show less losses to get approved. It’s actually a better market for business owners to buy today because more lenders are willing to work with them to fund loans.
“I just had a closing this month where the buyer was a business owner, which makes a complicated mortgage situation. He was able to get an FHA loan, which generally takes a little bit more time. But a year ago, you know, a business owner with a complicated mortgage and an FHA loan and it was on a manufactured home, like that just wouldn’t have happened a year ago.”
[00:24:58] What’s the craziest story Ellen has seen after being a real estate agent for five years
Both Ellen and Aaron have seen a lot of crazy home buying stories. The key takeaway is to expect the unexpected. You never know what can happen during a home sale. Make sure you have all the information you can about the home you are buying to ensure the most smooth process.
“I was googling the address for a home about to close and the house pops up on this auction site like auction.com and it says it’s up for foreclosure auction.
So I called the listing agent and called the title company. No one seems very concerned. So a couple days later I went back to the site and saw that the house was sold at a foreclosure auction.My buyer was supposed to close on it. And so I, again called the listing agent, called the title company.
Apparently the seller had stopped paying their mortgage payment and the house was sold at a foreclosure auction. So we had to go back on the house hunt and the buyers didn’t get their house.”
[00:30:45] Where to look for the best first-time home buyer perks
If you’re looking for any first-time home buyer incentives, talk to different lenders. Lenders are able to share any specials they are running. If you find any deals but want to use a different lender, don’t be afraid to ask another lender if they can match the deal. Smaller lenders might also be able to work harder for you.
“I talked to somebody from Rocket Mortgage a couple weeks ago and they seem like they have some programs available for first time home buyers. But then I talked to a local lender and they said that they also have any program that Rocket has and they said they can match.
So I think that there are some things available out there.”
[00:36:55] How sellers can make their listing more attractive in the current market
Sellers can make updates or offer incentives to help their listing be more attractive in the market. Updating the kitchen is a big selling point. Even a light touch up with painting cabinets can be helpful. Also, consider offering incentives to closing costs or helping to buy the rate down to make your listing more attractive.
“Usually the kitchen is the number one thing. It’s the number one comment as soon as a buyer walks into a house. The kitchen is usually the first thing that they see. Painting the cabinets if they need painted, some light kitchen staging. Kitchen, I would think is the number one thing that I would recommend if you’re getting your listing ready.
Also, putting in your listing that you are willing to offer buyer credits at closing or help with rate buy down. Putting those buzzwords in the listing will help you pop up in the search if somebody’s looking for a seller who can offer that closing assistance.”
[00:44:20] Here’s the strategy sellers should consider when coming up with the right list price
You need to be looking at current market conditions and data when listing your house. What worked six months ago will probably not work today. You can try to list your home at the price you think it’s worth but if you don’t get many showings early, it might be time to reevaluate your price.
“I guess once it’s listed and you see what happens you’ll have an answer. I mean, if you have a price that you wanna get, you list it at that price, and if you don’t get any showings for the first two or three weeks, it’s on the market, that’s kind of your answer. I feel like I’m not good at telling people stuff about price.
I would rather they figure it out for themselves. You can show ’em, show people what’s on the market, show them how long houses are taking to go under contract. You know, you can look at the data, but sometimes people just have to see it for themselves.”
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