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I’m sure you’ve heard the housing market is a different animal today than it was 6 months ago. There are a lot of sensational news stories about the housing market, but I believe we are experiencing a market correction, not a market crash. 

I believe things are slowing down, but a savvy buyer or seller reads the market, responds accordingly, and is able to capitalize on it. I’ve compiled some suggestions on how to do so, and wanted to share that with you:

For Buyers

• Don’t Lowball
  • The market may be shifting, but it is not a name-your-price one. If a home is priced at market value, focus on making reasonable offers. If a property is priced well at $310,000, making an offer of $255,000 is probably not enough to get it done. If you get lucky, that is great! But being reasonable in lieu of lowballing is more likely to yield the results you want.
• Don’t Be Afraid to Offer
  • I’ve found a lot of buyers (and their agents) are so trained they have to offer full price on property, they are afraid to even look at a home. Don’t be afraid to make a reasonable offer and see if you can work something out with the sellers.
• If You Can, Ask for Credits
  • Talk to your agent about whether asking for a seller credit is something the market will allow. I’m seeing more buyers asking for credits, but this may not work in every price range or situation.
• Buy Down the Rate if Possible
  • If the rising interest rates are concerning you, consider talking with your lender about buying down the rate. This means paying more at closing to get a lower interest rate, which can make a big difference on your monthly payment. Better still, if you’re in a situation where the seller is offering a credit, consider using the credit toward a rate buydown. Even a small reduction in interest rate can make a big difference on monthly payments.
• Realize There is Still Competition
  • About 59% of homes in the North Houston market sold for more than list price last month. The most desirable homes that check all the boxes are still doing well. But remember, selling for more or less than the list price isn’t just about what the market is doing. It’s also about the pricing strategy employed by the sellers and their agent.

For Sellers

• Patience is a Virtue
  • Instead of selling in hours, homes are spending weeks or even longer on the market. Don’t worry when your home sits a little longer on the market, it’s not a reflection of its desirability, it’s a reflection of a shifting market.
• Be Open to Negotiating
  • You’ve lost power and you need to be prepared to negotiate. Price reductions and seller credits may be what it takes to get your home under contract. Yes, these do cut into your bottom line, but focus on the bigger picture of how much money you are netting with historically higher home prices.
• Don’t Expect to Call the Shots
  • Gone are the days where one property has so much competition the sellers can dictate the terms of the contract. Be ready to bend to a buyer’s needs.
• Buyers have Options
  • The number of new homes coming on the market is astonishing. Sellers are trying to capitalize on a waning market, with greater than 75% increases in the number of available homes for the North Houston market. This means your home has more competition and allows buyers to be pickier.
• Prepare Your Home Like a First Date
  • If you can, take care of minor cosmetic fixes prior to putting your home on the market. You want your house looking like it’s going out on a first date – neat, well-kept, and ready to make a move! You want to eliminate as many reasons as you can for a buyer to say “No”.
• Do What You Can to make the Escrow Fast
  • Make the escrow process as smooth and seamless as possible. Buyers are pickier than they have been, and you don’t want them to be stuck waiting while market uncertainty is growing.
• Stop Believing in Unicorns
  • Everyone hopes there is a magical buyer out there ready to pay full price in cash for their home without even putting it on the market. Reality is, only 6% of the sales last month were cash. Price for the 94% of the market that will be financing.

I hope this is helpful to you as you navigate the shifting market. As always, feel free to get in touch if you want information about the local market dynamics.