The Importance of Offering Compensation to a Buyer’s Agent: A Deep Dive

When it comes to selling a home, one of the crucial decisions you’ll face is whether to offer compensation to a buyer’s agent. In today’s ever-evolving real estate market, this topic has become more relevant than ever. As a seller, you might wonder why you should continue this practice. After all, wouldn’t eliminating this cost mean more money in your pocket? While that might seem logical at first glance, there are several important reasons why offering compensation to a buyer’s agent can benefit you as a seller—both financially and in terms of a smoother selling process.

In a typical real estate transaction, especially in Texas, there are two agents involved: one representing the buyer and one representing the seller. Traditionally, the buyer’s agent is compensated by the seller, meaning that the buyer can have professional representation without paying out of pocket upfront. This is especially beneficial for first-time buyers who are often stretched thin just covering the down payment and closing costs.

But what does this mean for you as a seller? Why should you care about the buyer’s agent being compensated? The answer lies in the impact a competent buyer’s agent can have on the entire transaction process.

A skilled and experienced buyer’s agent can significantly influence the transaction's outcome. From the moment they schedule a showing, their professionalism affects everything—from ensuring the home is properly secured after a viewing to guiding their client through the complexities of a real estate deal.

Here’s why this matters: a competent buyer’s agent helps prevent unnecessary complications, reduces your stress as a seller, and ultimately, helps ensure that the sale reaches a successful closing. They understand the nuances of the seller’s disclosure, ask the right questions upfront, and guide their clients through the negotiation process smoothly. In contrast, an inexperienced or unprofessional agent can introduce chaos, delay the process, and even jeopardize the deal.

Mitigating Financial Risks

One of the most significant risks in a real estate transaction is a deal falling through after the contract is signed. In Texas, the option period allows a buyer to back out of the contract for any reason. When this happens, it can put a "stain" on the property, making future buyers wary and potentially lowering the home’s value. A competent buyer’s agent helps mitigate this risk by ensuring their client is well-informed and genuinely committed before moving forward with the purchase. They also assist their clients in properly understanding inspection reports, which can be overwhelming and lead to unnecessary demands or deal-breaking issues.

With changing market dynamics, many sellers wonder if they can offer reduced compensation to a buyer’s agent and still attract competent professionals. The answer is yes, but it comes with risks. While basic economics suggests that in a high-demand market, you might be able to offer less, the reality is that the market is largely untested in this regard. Moreover, even if you offer less, the buyer may still be required to pay the difference to their agent, adding another layer of complexity to the transaction.

We recently had an interesting case where a seller chose to offer a reduced commission—about half of what’s typical in our area. The home was priced well, in good condition, and in a desirable location. Despite the lower commission offer, we ended up in a multiple-offer situation. However, both buyers’ agents asked the seller to cover the full commission as part of their offers, which is standard practice in Dallas. Ultimately, the home sold above asking price, and the seller’s net profit met their expectations. This example shows that while it’s possible to offer reduced compensation, the market’s response can vary, and the bottom line should always be the priority.

As a seller, your goal is to maximize your profit and ensure a smooth transaction. Offering compensation to a buyer’s agent remains a key factor in achieving this. A competent buyer’s agent reduces the likelihood of deal-breaking issues, helps ensure that the transaction progresses smoothly, and ultimately, helps you reach the closing table without unnecessary complications.

As the real estate market continues to evolve, it will be interesting to see how compensation practices change. For now, the majority of sellers still offer market-rate compensation, and this strategy appears to be effective. If you’re considering selling your home and have questions about the best approach for your situation, feel free to reach out. We’re here to help guide you through the process, ensuring you achieve the best possible outcome.

Why Hiring a Buyer's Agent is Essential for Homebuyers: A Deep Dive

In this blog post, we're diving into a crucial topic for anyone considering buying a home: the importance of hiring a buyer's agent. If you're in the market for a home, especially in Texas, this episode is tailor-made for you. We’re here to break down why having a buyer's agent on your side is more than just a good idea—it's a necessity.

Did you know that Texas homebuyers didn’t have their own agents until the early 1990s? Before then, all real estate agents worked directly for the seller. This meant that anything you discussed with an agent—whether it was your budget, your timeline, or your preferences—was passed directly to the seller. Buyers often misunderstood the role of the agent, believing they were being represented, when in reality, the agent was looking out for the seller’s interests.

Thankfully, that all changed in the early '90s when buyer’s agency as we know it today was born. Buyers were finally allowed to choose their own agents and sign representation agreements, ensuring that the agent’s sole duty was to the buyer. This was a huge win for consumer protection, particularly for first-time homebuyers who often struggled to navigate the complexities of the process.

So, what exactly does a buyer's agent do, and why should you hire one? Let’s break it down:

1. Protecting Your Interests: A buyer’s agent is involved in every step of your home-buying journey. From finding the right property to negotiating the best deal, they represent you and ensure that your interests are prioritized. With their experience, they can help you avoid common pitfalls and navigate any issues that arise during the process.

2. Local Market Expertise: The right agent will be familiar with the local market and will be available to show you homes quickly—an essential factor in a fast-paced market. It’s important to choose an agent who knows the intricacies of the area you’re considering and who has experience with the type of property you’re interested in, whether it’s a condo, a new build, or a ranch.

3. Experience Matters: Experience is crucial in real estate. A seasoned agent will anticipate issues, streamline the process, and have a strong network of professionals—like lenders, inspectors, and contractors—that they can connect you with. This network is invaluable when it comes to making your home-buying experience as smooth as possible.

4. Managing and Protecting Your Budget: Your home is likely one of the largest investments you’ll ever make. A great buyer’s agent will help you understand the costs involved, guide you in making a reasonable offer, and protect your budget throughout the process. They’ll also help you navigate the negotiation process, potentially saving you money on the purchase price and other contract details.

One of the most common questions we get is, "How do buyer's agents get paid?" Traditionally, buyer’s agents have been compensated by the seller through a portion of the listing broker’s commission. However, this landscape is evolving, and it’s important to understand the different ways a buyer’s agent might be compensated:

Fixed Fee Commission Paid by the Buyer: You, the buyer, pay your agent a predetermined fee.

Concession from the Seller: The seller negotiates a concession to pay the buyer’s agent.

Portion of the Listing Broker’s Compensation: This is the most common scenario today, where the listing agent shares their commission with the buyer’s agent.

Regardless of the method, it’s crucial to discuss compensation with your agent upfront to avoid any surprises later on.

Finding a reputable buyer’s agent is key to a successful home-buying experience. We recommend starting with referrals—ask friends or family who had a great experience with their agent. If you’re not in the Dallas area, we can connect you with a trusted agent anywhere in the world through our extensive network.

When should you choose your agent? Ideally, as soon as you start your home search. A great agent will help you get pre-approved for a mortgage and guide you through every step of the process.

Hiring a buyer’s agent is one of the smartest decisions you can make when purchasing a home. They’re your advocate, guide, and protector throughout the process, ensuring that your interests are always front and center. If you’re considering buying a home, we’d love to help you find the right agent and make your home-buying journey as smooth and successful as possible. Reach out to us on Instagram at @Dallas.Haven if you have any questions or need assistance choosing the right agent for you.

Your Comprehensive Guide to Buying and Renovating a Fixer-Upper: Expert Tips and Insights

Today we are delving into the fascinating world of fixer-uppers. If you've ever been captivated by HGTV's transformation of rundown homes into dream dwellings, this blog post is for you. We're here to guide you through the essential steps and considerations of buying and renovating a fixer-upper property.

The Reality of Fixer-Uppers

First things first, transforming a fixer-upper into your dream home is more involved than what fits into a 30-minute TV episode. So, do you have what it takes? Renovating a fixer-upper requires patience, vision, and a significant amount of effort. But the end result is a home that perfectly suits your taste and needs can be incredibly rewarding.

Before you even start searching for a fixer-upper, have a clear conversation with your key decision-makers about your goals. Whether you're solo, with a partner, or with family, discuss the following:

The Dream: What is your ultimate vision for this property? Are you excited about the renovation work itself, or are you more focused on the end result?

Location and Lifestyle: Consider the location, the neighborhood, the school district, and other lifestyle factors.

Must-Haves vs. Nice-to-Haves: Create a detailed list of non-negotiables and dream features. This will help you remain focused and avoid getting distracted by exciting but non-essential features during your property search.

Renovating a home is a major project that requires realistic planning. Be honest about the timeline and the amount of work you're willing to take on. Here are some key questions to consider:

Timeline: When can you start the project? Do you have a deadline for moving in, or is it flexible?

Scope of Work: Are you planning a minor renovation or a complete overhaul? Be realistic about what you can manage.

DIY vs. Professional Help: Will you be doing the work yourself, or will you hire contractors? Managing a renovation, even with professionals, can be time-consuming and demanding.

Even before you've found a property, start assembling your team. This includes:

Designers and Contractors: Interview potential designers and contractors to find those who align with your vision and budget.

Financial Advisors: Consult with financial advisors to understand your financing options and budget constraints.

Real Estate Agents: A well-connected real estate agent can help you find properties that meet your criteria, including off-market opportunities. Having these professionals lined up early will provide you with realistic timelines and budget estimates once you find a house. Note that you can’t have a detailed renovation budget before identifying a house, but having a team ready will save you time and stress.

Financing a fixer-upper is different from buying a move-in-ready home. Here are some financial considerations:

Home Purchase: You can likely get financing for the house itself, but some fixer-uppers might require cash purchases due to their condition.

Renovation Costs: You'll need cash for contractors and supplies. Consider construction loans if you don't have all the cash upfront.

Budgeting for Overruns: A basic assumption of construction projects is that they will go over budget. Plan for this by setting aside additional funds to cover unexpected expenses.

The search for your fixer-upper can be both exciting and challenging. As real estate agents in the Dallas market, we know that some of the best fixer-uppers never even hit the market. Working with a well-networked agent can help you find these hidden gems.

On-Market vs. Off-Market Properties: Many properties that need significant work may never even hit the market. If you're interested in receiving notifications about our off-market fixer-upper listings, sign up for our email list at dallashaven.com/fixerupper.

Once you've found a house and negotiated the contract, Texas law provides a seven-day option period. During this time, you can conduct inspections and have your team assess the property. Here’s what to expect:

General Inspection: Inspect the major systems like the roof, foundation, plumbing, and HVAC.

Professional Assessments: If using professionals, have them evaluate the property to ensure it aligns with your vision and budget.

Renegotiation: If issues arise, negotiate with the seller for repairs or compensation. If necessary, you have the option to walk away and continue your search.

Even if you hire professionals, you’ll still need to manage the project. This includes making decisions on design, materials, and scheduling. Here are some tips:

Regular Check-Ins: Stay involved with regular site visits and meetings with your team.

Decision Making: Be prepared to make timely decisions to keep the project on track.

Quality Control: Ensure the work meets your standards and specifications.

Every renovation project comes with surprises. Be prepared for the unexpected by:

Budgeting for Overruns: Set aside an additional 10-20% of your budget for unforeseen expenses.

Flexibility: Be flexible with your timeline and expectations. Some delays and changes are inevitable.

Enjoying the Process

Renovating a fixer-upper can be incredibly rewarding, but it's important to go into it with your eyes wide open. The key is realistic planning, financial preparedness, and having the right team by your side.

Fixer-uppers can be the perfect choice for those willing to invest some sweat equity. They offer the opportunity to create a home that perfectly suits your tastes and needs. However, it’s essential to approach this journey with realistic expectations, thorough planning, and the right team of professionals.

If you're considering embarking on such a project, we're here to help. Reach out to us for guidance and to join our list for the latest fixer-upper opportunities at dallashaven.com/fixerupper. Happy renovating!

National Real Estate Lawsuit Update & Outlook

In mid-March a high-profile lawsuit involving the National Associations of Realtors (NAR) was settled, which will inevitably have some impact to homebuyers, sellers, and agents. Many of our clients have reached out with concerns and questions about the future of Real Estate, so we wanted to take some time to unpack the lawsuit and settlement and answer your most pressing questions on how this will impact the industry. Let’s dive in!

The Lawsuit

On March 15th, the National Association of Realtors reached a settlement that would end the litigation of claims brought on behalf of home sellers related to broker commissions. The lawsuit was brought about due to many sellers being unaware that they were able to negotiate agent commissions. They alleged that as a result of this, agent commissions were artificially inflated in the industry.

What was agreed upon? 

Two primary changes were agreed upon in the settlement. First, NAR has agreed to put in place a new MLS rule that prohibits communicating offers of broker compensation on the MLS. Currently, every MLS listing states how much commission is being offered to the buyer’s agent. But when this new law takes effect, that will no longer be allowed. Buyer agent commissions can still be offered, however, it can not be stated on the MLS listing. 

The MLS is our Realtor-only platform that a buyer typically gets access to when looking for a home. On any active listing, the listing agent would state exactly how much they are willing to share with the buyer’s agent if they bring a buyer for that property and close. So, with this new rule, listing agents will not be able to put that information into the MLS.

Secondly, buyers will now be required to sign a Buyer’s Representation Agreement with their agent before beginning the homebuying process to make sure that everything up front is negotiated, they understand how their Realtor is paid, their duties, commitments, and obligations to them. 

If the settlement is approved, these changes would go into effect at the earliest in mid-July.

What this means for sellers.

First and foremost, sellers have always been able to negotiate Realtor commissions before signing their listing agreement. That will not change. When you go to sell a home, you essentially negotiate the commissions for both agents - the one listing the home and the buyer’s agent. The biggest change we will see with these changes is the seller’s awareness that they can negotiate the agent’s commission. And the agents who bring more value are going to negotiate higher fees compared to those that bring less value. We think we will see more sellers evaluate the type of service they would like to receive to sell their homes and then pay accordingly. 

What this means for buyers.

As previously mentioned, buyers will be required to sign the Buyer’s Representation Agreement before they even begin looking at houses with their agent. At Haven Realty Group, this is a step we’ve always had our buyers do, but it was not required. The reason why this was part of the settlement is so that buyers understand both that their agent is being compensated and how they are being compensated. 

The Buyers Representation Agreement in Texas gives your right as a buyer as well as a fiduciary duty for your agent to put the buyer’s interest above their own. It spells out how much your agent will get paid and more importantly how much you agree to pay your agent regardless of what the seller is offering in compensation. Theoretically, agents could require the buyer to compensate the agent the remainder that was originally agreed upon if the compensation provided by the seller is lower than originally agreed upon. 

There will be three choices for how buyer’s agents will be compensated: 

1. Consumers can pay a flat rate commission. Meaning the seller is offering a flat rate or the buyer negotiates with their agent a flat rate for their services.

2. A concession from the seller. This concession is different from what it looks like today where the listing agent goes and negotiates on behalf of both agents in the beginning. The listing agent would be negotiating on their behalf and their commission. In this scenario, the buyer’s agent would need to come in and negotiate that alongside the offer they are bringing from their client. This is where we could foresee issues with the fiduciary duties of the agent.

3. Lastly, what is typical today, a portion of the listing broker’s compensation is shared with the buyer’s agent. 

How does this affect the industry? 

Most experts believe this settlement will be approved. For us at Haven Realty Group, very little will change. For buyers, we will continue to do the Buyer Representation Agreement, it will just be required before seeing the first home. For sellers, we will continue to negotiate the commission. 

What we’re going to have to understand from an industry standpoint is just how commissions are going to be discussed in this future state. Right now, we typically know what commission is being offered with any home we show our buyers and it’s a completely separate conversation from our client’s offer on a home. Right now, our conversation with the seller’s agent has nothing to do with our commission and everything to do with our client’s interest and offer on the home. We are curious to see how this adapts and changes (or doesn’t) as these new rules take effect. 

An unintended consequence, and our biggest concern, could be that people forgo using a Realtor if there isn't compensation from the seller. We could see this happening especially with those buying for the first time who may struggle to come up with more cash. They could end up foregoing representation when they need it the most.

Will this affect home prices? 

While we know many hope that this will decrease home prices, we don’t think we will see that in the Dallas market. The theory is that if we pay agents less, home prices will go down. The problem with that is that home prices are a basic function of supply and demand. The price point of a house is based on the demand for that house in that neighborhood. Then how well your agent can market the property and negotiate on your behalf. Basic supply and demand dictates the price of the home, so we don’t see it affecting home prices in the future.  

We are hopeful for a quick resolution to these lawsuits and we are always happy to answer your Real Estate questions anytime you have them. If you have more questions or are ready to start talking about buying or selling your home, give us a call! We’d love to help. 

Until next time, 

Brianna & Keelie

2024 Real Estate Market Predictions

It’s time for our annual Real Estate Market predictions. The last 12 months of the real estate market in Dallas have looked different than we expected. But we know many of you are wondering what’s to come. Will rates ever come back down? When will be a good time to buy or sell a home? So, today we are going to answer those questions and share our outlook and predictions for the Dallas real estate market in 2024. 

2023 Market Recap 

Last year, everyone was wondering if the market was going to collapse. Thankfully, it didn’t! People continued to move to Texas in huge numbers and the Dallas Fort Worth Metroplex remained one of the top markets in the country for those buying real estate. The demand for more housing far outweighed the supply, therefore, we didn’t see a cratering of home prices that sellers were dreading and buyers were looking for. 

What was unexpected about 2023 were the mortgage rates that did not fall as we hoped. Instead, our lowest rates in 2023 occurred in February hitting around an average of 6.25% for a 30-year mortgage. From there, we saw a summer run up the rates that eventually topped out around 8% in October. While rates have improved slightly since they were not the five to 6 percent we were hoping for by the end of 2023.

Because rates remained high, we saw that many homeowners chose to hold onto their low interest rates because they didn’t want to have to buy in a high-interest environment. This resulted in lower inventory for buyers.

Overall, the market looked much more balanced. Home prices still appreciated, but at a lower rate than we’ve seen in the wake of some recent white hot years. Buyers even had the opportunity to negotiate and get concessions this year and sellers were more realistic. Therefore, we saw much more evenness amongst buyers and sellers. 

2024 Predictions

What will rates be like in 2024? 

We desperately hope we aren’t sitting here in a year looking at the same rates, but if there’s anything we’ve learned, it’s that the days of a three or four-percent mortgage aren’t due to hit us again anytime soon. However, if rates drop below six percent, we expect a flood of activity in the marketplace. We predict that rates will be at six percent by the spring and we hope that we see 5.5% by the end of next year. 

Demographic Influences on the Market

For millennials, the median age for homebuyers is now 35 years old. And we have the largest generation ever now hitting this age. Therefore we have an incredible amount of buyers hitting the market, which is contributing to the pent-up demand we’ve been seeing.

The boomer generation is beginning to downsize, which will help increase the amount of inventory that is available as this generation moves out of their homes and makes room for millennials to move in. As they age and retire, the largest generational transfer of wealth ever will occur within the next 10 years. Meaning, that the huge amount of wealth that boomers have accumulated will be passed down to the next generation. 

As a result of both of these unique demographic influences, 2025 is predicted to be the second or third-largest home sales year in American history. We believe we will see the dam breaking on the real estate market because of lower rates and these demographic factors hitting at the same time. Supply will increase, but not enough to meet demand, and therefore we still expect to see home prices appreciate. 

What does this mean for me as a buyer?

Right now, there is less competition for homes. If you can find the right home for you, now is the best time to buy. If rates drop below six percent, we will see an influx in buyers finally getting out to buy, which will mean increased competition and higher home prices. 

If you’re having trouble finding the right home for you, we hope that a lowering of rates will also mean that sellers who are ready to move will go ahead and do so. Which will lend itself to more inventory available on the market. We recommend getting your ducks in a row now, get pre-approved, and be ready. 

What if the rates drop significantly after you buy? If this happens, your lender can run some quick numbers and discuss the option for refinancing. And if rates don’t decrease, enjoy building equity and watching your home appreciate!

What does this mean for me as a seller?

We predict that demand for homes should increase in the spring, which will be a great time to sell. Talk with your agent about the target market for your home and what the demand might be. Millennials are looking for places that are updated and move-in ready in prime locations. If your home isn’t one of those, your realtor should be able to help you set expectations and market your home effectively, and figure out the right timing for your home.

What if I need to buy and sell?

This will depend upon your unique situation. Will your purchase be contingent on your home sale? Can you move into your new home before selling your old one? We discuss these options in more detail in our blog “2nd Time Homebuyers - How to Buy and Sell Simultaneously”. Whatever your unique situation is, we are here to help you navigate it in today's market. 

Lastly, we are predicting that 2024 will be a great year in Dallas real estate. Our market remains strong, and it is a privilege to be able to help you buy and sell your homes. No matter what the market does, we will be here to help you with your real estate needs! If you’d like to talk through how these market predictions apply to your situation, give us a call. 

Until next time,

Brianna & Keelie

2023 FAQ Round Up!

As the end of another year draws near, we compiled a list of our most frequently asked questions of 2023 including our most asked question “How’s the market?” Today, we’re answering these questions for you with direct links to our previous blogs that provide a wealth of information on the topic. We love answering your questions and spend a lot of our waking hours counseling and advising through all things related to real estate. We hope this is informative and helpful wherever you are on your real estate journey. 

Q: How much will my house sell for?

Read Here! Pricing to Max Your Profit

Q: What is the first step in the homebuying process?

Read Here! What to Expect: How to Start the Homebuying Process

Q: How long does it take to buy a home?

Read Here! “What to Expect” Series

Q: Should I sell my current home before buying a new one?

Read Here! 2nd Time Homebuyers – How to Buy and Sell a Home Simultaneously

Q: What should I do to prep my house for selling?

Read Here! What to Expect: Preparing Your Home for Sale

Q: Do I need a home inspection?

Read Here! The Terrifying World of Inspections

Q: What will my mortgage payment be if I want (this house, have this credit score, have this much saved)?

Read Here! How to Choose a Lender

Q: When is the best time to buy a house?

Read Here! Should We Buy Now or Wait

Q: What costs are involved in buying/selling a house?

Listen Here! The Hidden Costs of Buying a Home

Q: And finally, our most asked question, “How’s the market?”

While we see a lot of buyers waiting on the sidelines because of the current interest rates, we believe that right now can be a great time to buy a home. With the current rates being what they are, the cost of taking out a mortgage is high, which can deter buyers from wanting to buy right. Simultaneously, we see a lot of sellers who have amazing interest rates at two to three percent that are hesitant to sell resulting in low inventory. 

So, we believe buyers have an amazing opportunity to finally have a way to negotiate on price in a way we haven’t seen in years. Even though interest rates are high, if you can qualify for what you are interested in, it’s a great time to buy. 

Come Springtime, we think there will be a lot of pent up demand as a result of either interest rates going down or people just being done waiting. The concern with waiting is that if this pent up demand occurs, there may be a sort of frenzy again and buyers will have a difficult time negotiating on price and instead be in bidding wars on homes. While this can be good news for our sellers, for a buyer it may end up costing you more if you have to pay well over the asking price than it would be to buy now with a higher interest rate. It’s something all buyers really need to weigh. 

For first time homebuyers, do not wait for interest rates to drop. Buy now! Otherwise you may well get priced out of the market. Get on the property ladder now, build your wealth through the appreciating value of your home and if interest rates drop enough you can always refinance in the future and decrease your payments. And if rates do not drop any time soon, then you were able to buy a home at a good price! 

While you may buy or sell a home a few times in your lifetime, we have the distinct honor of doing this every single day. All questions are good questions, and they all help you towards our shared goal of making real estate more accessible for everyone. 

If your questions were left unanswered, let us know! We’d love to help you navigate the real estate market.

Until next time,

Brianna and Keelie

Saving More Money on Your Property Taxes

Favorable changes to the homestead exemption here in Texas were recently voted into law on November 7th, 2023! Homestead exemptions can save homeowners a lot of money in property taxes on their primary residence and now, homeowners will be able to save even more in property taxes! With Texas having some of the highest property tax rates in the country, this is something every Texan can celebrate! So, if you have questions about the changes, how they will affect your property taxes, or even about homestead exemptions themselves, we are going to break it all down for you. 

Note: The information below applies specifically to Texas homeowners. 

What is a Homestead Exemption?

A Homestead Exemption allows for a tax break on whatever property you consider your primary residence, or “homestead”. In order to qualify for a homestead exemption, this must be a residential home and not owned by a corporation. This exemption lowers the valuation of your home according to your taxing authority, which ultimately results in lower property taxes!

For example, if your home is valued at $500,000, but you qualify for a $40,000 exemption, the property tax rate would be applied to the $460,000 value rather than the $500,000 appraised value. 

How is my home valued? 

It’s important to remember that there is a difference between an appraisal done by the county and an appraisal done as part of the home-buying process. The appraisal done by the county has no impact on what your home might sell for on the current market. 

For tax purposes, the county assesses your home and determines its value according to the state. The county has a limited picture of your home. They can only see the exterior of the home, what you paid for it, and any permits that have been pulled for it. They also can not see what your home was appraised for at the time of purchase. So, they provide an estimate based on these limited factors. Typically, your appraisal done by the country for tax purposes is much lower than what you’d be able to sell your home for on the current market. 

So what’s changed?

Prior to the new legislation passed in November, the value of a Texas homestead exemption was $40,000. Meaning, that if your home was appraised for $500,000 by the county, they would take $40,000 off of the appraised value and apply the property tax rate to that reduced amount (i.e. $460,000).

Now, the new legislation increases the homestead exemption value to $100,000! This means that an appraised $500,000 home would only be taxed on a $400,000 value. This will result in a significant reduction in tax bills for every homeowner in the state!

There is also some good news for our investor clients! Previously there was no cap on the amount your appraisal could increase year over year for commercial, mineral, and residential properties. Now, these properties that do not have a homestead exemption and are valued at less than $5 million will have a 20% cap on their value growth each year for the next three years. We believe this will also lead to impactful savings for investors in these property types.

What do I do if I’ve already filed for a homestead exemption? 

By now, you should have already received your property tax bill for the year, which may or may not have already reflected these changes in the bill depending on your county. If it doesn’t reflect a $100,000 homestead exemption, then wait for a new bill before paying. Taxes aren’t due until January, so it may take some time for your county to make those updates. If you already paid your taxes, don’t panic! You will receive a refund check reflecting the difference in tax amounts with the new legislation in effect. 

What should I do if I haven’t filed my homestead exemption? 

If you’re a current homeowner and you haven’t filed for a homestead exemption, you should finish reading and go file now! It’s completely free to you and is a simple process. Homestead exemptions are filed with your appraisal district for your county, which will be on the county’s website. 

File an “Application for Residential Homestead Exemption”, ideally the first tax year you are a resident. If you are delayed in filing, you can get a retroactive tax break of up to 2 years. And the good news is, once you apply, you do not need to reapply each year! Your homestead exemption will continue as long as you remain the owner of that home. 

Filing a Homestead Exemption is easy, and it’s worth your time to save major money on your property taxes. We think this recent change in legislation is a huge win for homeowners and we want to make sure you can take full advantage. If you have any further questions, we’re just a call, text, or email away!

Until next time,

Brianna & Keelie

Dallas Short-Term Rental Ban: What You Need to Know

It’s no secret that there’s been an explosion in the use of Airbnb, VRBO, and other short-term rental companies to find a place to stay for a night or two. They’ve become an attractive way to travel and also an attractive way to use investment property in recent years. And cities have been scrambling to catch up. Earlier this year, Dallas passed some new short-term rental laws that all potential buyers and current owners of short-term rentals need to be aware of. What does this mean for our city? What does this mean for you as a property owner or buyer? Let’s dive into these questions and more! 

What is considered a short-term rental? 

First, let’s clarify what a short-term rental is. By definition, a short-term rental is a “full or partial rentable unit containing one or more kitchens, one or more bathrooms, and/or one or more bedrooms that are rented to occupants for fewer than 30 consecutive days or one month per rental period”. In other words, a short-term rental is a furnished house or condo that someone owns but rents out for a day or more.

Short-term rentals became (and have remained) very popular because they are alternatives to a hotel with amenities that you may not find elsewhere like a private pool and large common area for your friends and family. Short-term rentals provide you with a different experience than you would get in a hotel.

Why would there be a move to ban short-term rentals?

For many people, short-term rentals have been a different form of investment property. Because so many of these rentals are in single-family neighborhoods, many of the neighbors began complaining about loud parties, a more transient nature to the neighborhood, increased crime rate, and didn’t think that these belonged in residential areas. Therefore, the city of Dallas began investigating the impact of short-term rentals in 2019. They formed a committee, held public hearings, and tried to gather information so they could determine what might be best for the city. Ultimately, because homeowners are entitled to “peaceful enjoyment” of their property, a ban on short-term rentals took effect in June. 

What’s changed?

The city ultimately concluded that using a property as a short-term rental does not qualify as “single-family residential use” and should be restricted to multifamily and nonresidential zoning. In multi-family settings, short-term rentals are only allowed in communities of 20 or more units and only 3% of the community may be used for this purpose.

Short-term rentals must also now register with the city to operate as short-term rentals and pay the same taxes and fees that hotels do. They also must have off-street parking available. 

How does this impact current owners or potential buyers? 

These new restrictions for short-term rentals were originally passed on June 14th of this year, however, they are not enforceable until December. But while it’s not enforceable today, it’s time for short-term rental owners to make the necessary changes. 

If you currently own a short-term rental, it’s time to evaluate what your new strategy will be:

• Continue to keep the property furnished, but rent it out for more than 30 days at a time. These sorts of rentals can be marketed for traveling nurses or corporate relocations. 

• Make the property a rental home for longer-term tenants looking for a home with a 12-month or more lease. 

• Or you can cash in and sell the home!

Your decision will ultimately come down to cash flow. How much equity you have in the home, how much rent you could get each month, and how occupied you think you could keep the property. We can also talk through options with you if you need additional information or help!

If you’re considering buying a property to use as a short-term rental, consider these things:

• Many multi-family properties have HOAs that have already effectively banned short-term rentals in their buildings and communities due to these same issues listed above. Each HOA is different, but if you’re considering buying a property for this purpose, the details will be in the HOA bylaws and are subject to be amended by a vote from the owners. 

• Make sure you know and understand how many short-term rentals are already operating in the community

• Do the math and make sure this makes financial sense!  

We hope this brings you up to speed on the latest news here in Dallas and clarifies any questions you had lingering about these new short-term rental bans! We’ve simplified some details, but these are the broad strokes that will help you make a next-step decision if you own a short-term rental here in Dallas or are considering buying one.

If you’d like to discuss your unique situation, give us a call! We’re always here to help you navigate the market and make the best decision when it comes to your property. 

Until next time,

Brianna and Keelie

Moving to Texas - What's Different?

Considering a move to the great state of Texas? If you’ve bought a home before, it’s easy to assume that you know the process. However, real estate is done a bit differently in each state, and we’ve had the privilege of helping a large number of buyers coming from out of state. So, today, we’re breaking down the list of things we know to be unique to the real estate process in Texas!

The Roof

While North Texas doesn’t see many natural disasters, we do have other unique challenges when it comes to weather. Specifically, hailstorms. North Texas tends to have fairly frequent hail storms. And as they say, many things are “bigger in Texas'' and that includes the size of hail. Because of this, it’s quite common to have a roof replaced under an insurance claim due to hail damage. We always recommend paying close attention to your wind and hail deductible on your homeowner's insurance policy. In North Texas specifically, it’s been said that the average lifespan of a roof is about 8 years. After a hailstorm, many homeowners will call a trusted roofer to come out and see if the damage to their roof would meet an insurance claim. If it does, then they will pay the deductible and get a new roof!

Foundation Issues 

The North Texas soil is high in clay content, which means that the soil expands with moisture and contracts in a drought. This movement causes settling in houses. Almost all homes will have settled to some degree. There’s a formula for the margin of tolerance that is considered acceptable to structural engineers, and when a house has settled outside of this margin, repairs must be made. When buying a home in North Texas, know that there is going to be movement. The question is how much movement and whether or not it is compromising the integrity of the home.

Foundation repair is not a regulated industry. So, when in need of foundation work, we recommend working with a company that has a solid reputation and long history. If you’re purchasing a home that previously had the foundation repaired, make sure that there is a lifetime transferable warranty, that a reputable company did the work, that a structural engineer signed off after repairs were made, and that a plumbing test was completed after the repairs. Your Realtor should be looking out for all of this for you when buying a home.

There are a few ways to prevent foundation issues. Too much or too little water in the soil around your foundation will cause movement and settling. Therefore, gutters and an irrigation line around the foundation of the home can help you regulate the moisture levels. You will also want to keep larger trees at a distance from your foundation as their roots can absorb too much water and leave the soil too dry.

Washers, Dryers & Refrigerators

When considering what comes with the house, most appliances are considered items that will convey automatically with real estate. However, there are three exceptions: washers, dryers, and refrigerators. These are considered personal property items and therefore, the seller is free to take them with them when they move out unless written into the contract. When purchasing a home in Texas, you need to be prepared to bring your own or negotiate them into the contract.

Basements 

If you’re moving from a northern state, you may be accustomed to having a basement in your home. Basements are great for extra living space or additional storage space. However, here in Texas, basements are very hard to find. Most basements in Texas will be found either in 200-year-old houses or very high-end luxury custom homes.

In Northern states, the majority of homes have basements because they have to build the foundation so deep to pass the freeze line, that it’s cost-effective to turn that into usable space. In Texas, however, the deeper you dig, the more rock in the soil you will encounter. This makes it incredibly expensive to actually build out a basement. So if making the move to Texas, don't expect your home to have a basement. 

Escalation Clauses

An escalation clause is a clause you enter into a contract that essentially says, “If someone has a higher offer than my initial offer, I’m willing to offer more up to this certain point.” In a competitive market, many other states allow an escalation clause. However, TREC rules prohibit license holders from writing escalation clauses. According to TREC, a license holder drafting language of this type is considered an unauthorized practice of law. 

By not allowing escalation clauses, buyers are encouraged to put their best offer forward, and it also protects everyone from disputes or even lawsuits.

The Option Period

In Texas, when your offer is accepted on a home, you move into what is called the Option Period. The Option Period is a negotiated amount of time where the buyer can terminate the contract for any reason, forfeiting only the Option Fee (typically about $500). Many other states have an inspection contingency, but Texas is a bit more open-ended. This is one of our favorite things about real estate in Texas! This Option Period allows buyers the opportunity to have a bit more time to process the homebuying decision when they have more information and renegotiate based on findings if needed.

30 Day Closing

In Texas, from the day the contract is accepted to the day you close is on average, about 30 days. Some other states see 45 to 60 days as a typical contract-to-closing timeline, which would be a longer closing for us in Texas!

Title Companies

Because of our use of title companies in Texas, buyers will rarely meet the owner or the seller of the property they are buying. We don’t typically use an attorney to sort out the paperwork but instead use escrow agents at a title company to do the title work and hold funds in escrow. Both parties will eventually sign at the title company, but they will not typically meet.

Leaseback Agreements 

Though they aren’t common in many states, leasebacks are a tool frequently used in Texas real estate transactions. In a leaseback, the seller stays in the home after closing and funding as a tenant for a specific amount of time at a specific rent and deposit. 

Leasebacks allow the seller to have some margin for error in case their sale is delayed or in case they need the overlap to avoid moving twice. In a competitive buyer situation, it can be quite common for the buyers to allow the sellers to remain with a leaseback at no charge, but leasebacks are rarely longer than 90 days. 

Moving to a new state can be overwhelming. So, working with professionals with a lot of experience helping out-of-state buyers move to Texas is an important piece of the puzzle. If you’re considering a move to the great state of Texas, give us a call! We’d love to help you navigate the Texas market and find a new home. 

Until next time,

Brianna and Keelie

Is the Market Going to Crash? An Interview with Mark Wolfe

This month we’re back with a recent interview with our friend Mark Wolfe.  Mark is a native Dallasite and has been a player in the real estate industry for the last 48 years. Mark and his wife founded RE/MAX DFW Associates in 1982 and today, it is one of the largest brokerages in the country. During our interview we discuss the state of Dallas real estate and Mark answers the question we’ve all been wondering: is the market going to crash? 

Q: Can you give a brief overview of the role of a broker?

Mark: A broker is not only the owner of a real estate company but is also someone who mentors and guides the agents that work for the brokerage. In my brokerage, I currently have 320 agents and I am liable for these agents as well. A broker owner carries a lot of responsibility, but I love watching my agents grow and mature and find success in the real estate business.

Q: How would you describe the current state of the market?

Mark: The current market  varies across the country but overall is somewhat stagnant. With all that has happened with interest rates rising, many people are not wanting to move because they currently have low interest rates on their home. However, we are still in a healthy market and still seeing slight home price increases. The Dallas market is also leading the country with new home permits in the area.

Q: Has 2023 gone the way you thought it would?

Mark: For the first half of the year, I’d say yes. Recently however, a lot of factors have caused a significant (but temporary) slow down that I wasn’t expecting to see in July and August. However, heat does affect the market. With as hot as it’s been, people do not want to go looking for homes. The states that are leading in the market right now are the northern midwest states where the weather is much cooler than what the rest of the country is experiencing. 

Q: Are we heading toward a market crash?

Mark: No. The American economy is still doing pretty good. The real estate market is as strong as it has ever been and I don’t see a crash happening.

Q: Will interest rates fall?

Mark: I do believe we will see interest rates fall below what they are now. 82% of homeowners have an interest rate of below four percent. 68% of homeowners are below three percent. We’ve never had that before. Fanny Mae’s prediction is that interest rates will be around 6.3% by the end of this year and 5.6% by the end of next year. If we get down to 5.6% the market is going to really take off and people will be wanting to sell their homes. 

Q: Are we due for a recession? How would that affect the Dallas housing market?

Mark: I have real doubts that we will have a recession now. We are more stagnant than when going through a recession. Even if we do go through a recession, Dallas will fare well because of how Dallas has diversified in all sectors and because people’s mortgages are low and generally have record levels of equity in their homes. In past recessions when foreclosures became extremely common, it was because people did not have equity in their homes. Even if we had a drop in home values, we would still not see the same foreclosure rate because of the equity people have in their homes.

Q: How will the recent changes in local laws regarding short term rentals impact real estate?

Mark: Each town has addressed this issue differently. The city of Dallas just passed laws banning all short term rentals in residential single family neighborhoods. However, you can have short term rentals in multi-family or commercial neighborhoods. It’s reported that Dallas has about 1,800 short term rentals in the city, however, air bnb shows 6,000 short term rentals in Dallas. 

The short term impact for the real estate market is that there could be more homes coming on the market, because these current short term rentals may not want to move to a long term rental. If these short term rentals become primary residences, this could also increase the value of the homes in the neighborhood. 

Q: What do buyers operating in today's market need to know?

Mark: Home prices are getting ready to increase again. So, buy now and refinance in a year or more if rates have dropped enough. Get the home value where it is now before the home keeps appreciating. And if the rates continue to go up, then you’ve locked in a good rate. 

Q: What do Sellers operating in today's market need to know?

Mark: Unless you need to move, stay. 

Q: Any last thoughts?

Mark: It’s going to be an interesting few years. Real estate can become very political during election years, so it’ll be interesting to see what happens. But even still, we will continue to sell homes and help families find homes to meet their needs. 

You can listen to the complete interview with Mark in the podcast linked above. For more real estate news, economic predictions, and local housing market updates, subscribe to our bi-monthly email list at dallashaven.com/insiders. We love keeping you up to date! 

Until next time,

Brianna and Keelie

What to Expect: Closing Week, Your Home is Sold!

It's closing week! The final step to wrapping up the selling process. This week all of our efforts are going towards hearing those three magic words, “Clear to close!” and crossing the finish line. This is the week in which all of your time and financial investments pay off. For some sellers, this week is smooth sailing, while for others, this week can be a little chaotic. But never fear, we are here to help you know just what to expect for closing week. 

Your closing week timeline and checklist will vary depending on your situation. If you have already moved out of the home, we are simply making sure the home is ready to transfer to the new buyers. However, if you still need to move out, we are working to make sure that the timelines for selling this home and purchasing your new home align properly. 

“Clear to Close”

The most important thing we are waiting and listening for during closing week is the buyer’s final loan approval and the lender giving the official “clear to close”. If the buyer is using a lender, we want to know that the appraisal value met, the HOA documents have been approved, the title commitment has been issued, and the lender has approved both the buyer and the property. Once all conditions have been met and we can move to the closing table, the lender will give us the “clear to close”. 

If we do not receive the “clear to close” from the lender by the closing date, closing may need to be moved. If this happens, we will walk you through this and help you navigate adjusting the timeline. 

The Final Walkthrough & Moving Out

Typically within 48 hours of closing, the buyer will schedule a final walk-through of the house. During the walkthrough, they are checking to make sure the house is in the same condition they saw it when they went under contract (no flood damage or scrapes to the hardwood floors) and also that any agreed-upon repairs were completed. 

When moving out of the home, everything should be removed except what was included in the contract and attached to the home. On the first couple of pages of the contract is a list of things that should stay with the home. Other items that need to stay are those that were negotiated such as certain appliances and furniture. 

A general rule of thumb is that if it takes a tool to remove it, it should stay with the house. Common items that are often accidentally taken are things like TV mounts, smart doorbells and surveillance cameras, curtains and curtain rods, and shelves that are drilled into the wall. If you have questions about specific items in your home, we are always here to help clarify if they should stay or go. 

You will also want to make sure to leave behind things that the new owners will need such as garage door remotes, security codes, and mailbox keys. A recent update on the contracts requires sellers to log out of any smart devices prior to turning over the home to the buyer. This includes security systems, smart doorbells, and thermostats. 

Additionally, any information you can pass along regarding your paint colors, pool maintenance, and other unique features of your home is super helpful for the buyer’s transition into the home. Homes don’t come with instruction manuals, so anything you can leave for the buyers, the better!

Don’t forget that you will also need to contact your utility providers to let them know that you will be ending your services with them. We typically suggest canceling services for the day after closing so that if the buyer wants to transfer services and use the same company, the provider doesn’t have to come out twice to stop and start services. 

Lastly, it is not required that the house be professionally cleaned when moving out, however, it is common courtesy to leave it at minimum “broom” clean. This is their first impression of their new home, so you can help make it a great one!

The Settlement Statement

Prior to closing, we will see the final statement from the title company so that you can see the exact debits and credits from the transaction as well as your net proceeds. This statement needs to be reviewed in detail as this determines the check you will be receiving when everything is completed on closing day. So if there are any errors in the settlement statement, we need to know as soon as possible. 

The other two important pieces of information that you will need to know for closing day are the details of your remaining mortgage on the property and deposit information from the sale. 

If you have an outstanding mortgage on the property, the title company will need the mortgage information so that they can pay it off on your behalf. Once both parties have signed on closing day, the title company receives the money from the buyer or the buyer’s lender and then pays off the remaining mortgage on the home.

When it comes time for the net proceeds to be transferred to your account, you will need to provide wiring instructions or a voided check of the account you want the money deposited into. 

Closing Day

Closing day is our favorite part of the entire selling process! We will attend the closing and be ready to celebrate your sale when the final signatures are completed. Closing day will take place in one of two ways: at the title company or by a mobile notary. If you are unable to come in person to the title company, for a fee, a notary can come meet you at any location in order to get the closing documents signed. Because there are significantly fewer documents for a seller than the buyers, signing will usually take about 30 minutes or less. 

After both parties have signed, the mortgage company will review all signed documents pertaining to the loan. Once they have confirmed that every signature is where it needs to be, they will issue the “funding authorization”, which allows the title company to release all funds appropriately.

Then, it’s time to celebrate! You have officially sold your home.

The Leaseback

It’s become more common, especially in a seller’s market, to have short-term leasebacks. This allows the sellers to stay in the home after closing for a length of time. The closing process is exactly the same as mentioned above, except for a few key differences as you play the role of tenant during this time.

1. Keep the utilities on and under your name until you move out. 

2. If anything breaks in the house, it is still your responsibility to repair it.

3. Notify your insurance provider that you are going to be a tenant for this time period so that they can make the necessary adjustments to the policy. 

Selling your home can be a lot of work, but closing week is when we see the payoff happen! We hope that this series of “What to Expect” has been helpful and better equipped you to navigate the buying and selling process. If you’d like to learn more about simultaneously buying and selling a home, check out our previous blog. If you’re ready to dive in and begin the process of buying, selling, or both, give us a call. We’d love to help!

Until next time,

Brianna and Keelie

What to Expect: Your Home is Under Contract

The staging is done, the pictures are taken, your home is on the market, and you finally get that first offer. It is truly an exciting moment for any seller when your hopes of selling your home become a reality, but the work is not yet done. How should you proceed? How do you get under contract? What happens now? You need a professional to help guide you through navigating this timeframe of getting under contract and all the way to closing. But never fear, we are here to help! Let's talk through what to expect when your home is under contract.

When listing your home, your agent should be able to give you a reasonable time frame for how long you can expect your home to be on the market before getting under contract. Now, this isn’t an exact time frame of course, but rather a best estimate based on what they are seeing in the current market with homes comparable to yours and in your geographic area.

Your agent will also be communicating with other agents who have interested buyers about what other parts of the offer (other than the sales price) are important to you - factors like the timeline for closing, the option for a lease back, or removing any contingencies from the offer. We want to make sure that we are maximizing your bottom line and also removing as many potential contingencies as possible that the buyer may have.

Getting Under Contract

In a seller’s market, a market in which there is more demand for homes than there are homes available to buy, you may find yourself with multiple offers on your home. In situations where you’re entertaining multiple offers, we really want to find the balance between waiting to see what offers will come in and being courteous to the offers that are received. It’s no small thing that someone is offering to buy your home, but we also want to allow enough time to get people through your house to see it and get competitive offers. More often than not, when multiple offers are coming in, your agent will set a deadline for all offers so that you as the seller can respond appropriately to the offers that are received.

Whether you have one offer or multiple, your agent is going to do their due diligence on any and all offers. We will first talk to the buyer’s lender and ensure that the buyer is qualified, that the timelines and deadlines set by the contract are ones that this lender is able to adhere to, and what the options are if the appraisal comes in low.

Your agent will look over the contract with a fine-tooth comb to make sure that it is properly completed and also recommend to you points that might be negotiated on your behalf. Most of the negotiating that your agent will do after the initial offer is received will be verbal, but, once a final agreement has been reached, both parties will sign a contract that reflects those final terms. Once you’ve both signed, you’re officially under contract!

The Option Period

A typical timeframe from getting under contract to closing is about 30 days. Once you are under contract, you move into the option period. This period is a negotiated time (agreed upon in the contract) but is typically about five to seven days. The most important thing to know during the option period is that this is the time in which a buyer can terminate the contract for any reason and only forfeit the option fee.

During this time, there are a few things that need to be done in which people will need to be in your home. During the option period, the buyers will schedule an inspection of your home. This is often the most nail-biting time for the seller as they wait and see if there are any major findings that come out during the inspection that might lead the buyer to terminate the contract.

The inspection will occur usually within one to three days of getting under contract and lasts on average about four hours. During the inspection, you and any pets will need to be out of the home so that the inspector can do all that they need to. You will also want to ensure that your crawl space, electrical panel, and attic are all accessible so that they do not have to come back another time in order to finish the inspection.

At the end of the inspection, the buyer usually comes out to the house and debriefs the findings of the inspection. You are not permitted to listen in on this conversation nor will you be given this inspection report afterward. The inspector is hired by the buyer and the report is for them. However, the buyer’s agent will usually notify your agent of any items they are particularly concerned about or would like the seller to address. If there are any items that they would like to have more information on, the buyer may opt to hire additional professionals to come to your home and investigate something further such as plumbing or the foundation.

All of these things happen very quickly so that the buyer can get as much information as they need before the option period ends. Depending on the findings, the buyer will most likely request either a repair that you as the seller will need to complete before closing or a credit for repair so they can do it themselves after closing. All of these things will be negotiated with the help of your agent. It is normal and expected for the buyer to make some request and your agent will help guide you through these negotiations to ensure that what we’re agreeing to is necessary to get you to the closing table.

The Appraisal

Another important milestone while under contract is the appraisal of your home. During the appraisal, your agent will coordinate a time with you to have an appraiser come out to your home. The appraisal generally takes about 30 minutes during which they will take measurements and some photos of your home. The appraisal report typically takes about two weeks to be completed and like the inspection report, the seller usually does not see the appraisal report.

If the appraisal comes in below the contracted sales price, we will reach out to the lender to see if there are options to restructure the loan. If that is not an option, then we will potentially need to renegotiate with the buyer. However, if the appraisal meets value, then we celebrate and move forward to closing.

As a seller, the remainder of the contract period is focused on making any necessary home repairs negotiated in the contract and packing up in preparation for closing day! Next, in the “What to Expect” series we will be walking through closing week. What to expect and how to keep the buyers as happy as possible until we get to the closing table.

Selling your home is an exciting time and it can also be a lot of work. But we are here to help you know what to expect and navigate even the unexpected. Thinking about buying or selling a home? Give us a call. We’re here to help you every step of the way when it comes to buying and selling your home.

What to Expect: On the Market as a Seller

The hardest (or most time-consuming) part of selling your home is preparing it to go to market. Everything we’ve done up to this point is to get people into the home to see it in person. Once a buyer has seen how great your home looks in photos, they’ll be ready to come see it in person. This is one of the most crucial parts of the agent/client partnership. We’ve got to market your home to get people in the door, and you’ve got to be ready to showcase your home. We’ll work together with the unified goal of positioning your home for the best offer. So, let’s talk through expectations once your home hits the market.

Marketing Your Home

First things first, your agent needs to market your property to get as many eyes on it as possible. One of our highest priorities is making sure your property has the best exposure we can give it. We take a multi-faceted marketing approach to do this. Marketing your property will include:

• Creating a personalized web page for your property with photos, a 3D tour of the home, we created when preparing your home for the market, and information about your home and property.

• Adding a QR code to the For Sale sign in the yard that links to your listing. This allows those passing by a quick way to access more information and see photos of the home. 

• A high-quality brochure of your home for private showings and the open house. Potential buyers can take these with them and continue to be reminded of how beautiful the home was through photos and information about the highlights and best parts of the home. These are especially advantageous when buyers are seeing multiple homes in a day.

• Social media posts of your property.

• Networking with other agents.

Our overall goal in marketing your home is to communicate and showcase quality, hard work, and professionalism, so that buyers know we aren’t cutting corners but rather that we see the value and worth of the home ourselves. 

Targeted Digital Advertising

A unique strategy that we at Haven Realty Group also utilize is targeted digital advertising. If a potential buyer comes to see your home and has their phone on them or if they have just scanned the QR code out front, we are going to serve them advertisements for your property. Your webpage that we created is going to begin popping up on Google or Facebook as advertisements reminding them of your home, reminding them of what made them want to see the property or scan the code, and eventually, hopefully, leading them to write an offer. 

Showings

Soon after your home is listed, agents will begin requesting showings for their clients. We will set you up on a showing service which will notify you when an agent is requesting a showing and allow you to accept or deny the showing. 

These will be private showings of about one hour in which a licensed realtor will show their clients your home. Showings typically occur anywhere from 8:00 am to 8:00 pm with a minimum one-hour notice provided to the sellers. If you need more than an hour’s notice because of small children or pets in the home, we can work with you to find a more realistic timeline. However, we want to make your home as available as possible for showings so that we can be opportunistic when a potential buyer wants to see the home. The goal is to be able to accept as many showings and therefore get as many potential buyers through your doors as possible. 

Preparing for Showings

As you are preparing for showings, we want you to keep in mind that we want buyers to envision themselves in your house, not you. In preparing the house for the market, we’ve probably already had to remove the large family portrait above the fireplace mantel and some other personal items. And for the showings, we are going to ask that you vacate the home for the full window of each showing. It’s really difficult for a buyer to envision themselves living in a home with the buyer peeking over their shoulder. 

Prior to vacating the home, do a little tidying up. We will provide you with a checklist for showings, but some basics are: opening up all the blinds, turning on all the lights, closing the toilets, hiding your toiletries, and putting away all dirty dishes. Remember, buyers don’t want to see your toothbrush, they want to see your beautiful countertops. 

Additionally, take or crate any pets with you and make sure the house smells good as well. We don’t want buyers to be distracted by odors of any kind. Listen to our full podcast on this topic to hear about Keelie’s personal experience with “The Hot Dog House” and what not to do when preparing for showings. 

Following Up With Agents

After these showings, your agent is going to follow up with the buyer’s agents for feedback on the showing. We will be asking them things like, what did the buyers think? What were the pros and cons? Is there anything that they saw that they would recommend we change? Are they planning to write an offer? 

Sometimes we receive feedback quickly from other agents and sometimes we receive none at all. However, any feedback we do receive will be passed along as it is usually really valuable especially when it comes to the condition of the property and their opinion of the asking price.

The Open House

We also want to make sure that we are opening your home to get as much traffic in a relatively short amount of time as possible. And one primary way we do this is with an open house. We typically aim to host an open house the first weekend that your home is on the market. We’ll need a two-hour window to give people enough of a timeframe to come through the home. Your agents will come early to help set everything up and make sure all of the lights are on, signs are out, and the home is ready when the open house begins. 

An open house is different from a private showing. You could have multiple parties coming through your home at one time and they could be with or without their agent. So, if picture day was priority one for your home looking like perfection, the open house is priority number two. You could potentially have a lot of eyes on your home, so we want it to look perfect. 

Once your home is on the market, we don’t take our foot off the gas. The small things you do to make sure that a buyer has a great experience while viewing your home are going to go a long way toward getting the right offer for you. Your agent is a critical part of this process and we’ll be doing significant work behind the scenes to market your property effectively. And together, we will get your home sold. 

Are you ready to get your home on the market? Give us a call today, if you are considering buying or selling a home. We’d love to help you and your family every step of the way. 

Until Next Time,

Brianna and Keelie

What to Expect: Preparing Your Home for Sale

When purchasing a home, the buyer devotes most of their time and energy from getting under contract to closing. For a seller, however, it’s quite the opposite. Most of the work you will do as a seller happens before your house even gets to market since the majority of your time and energy is spent prepping your home for sale. We have to make sure that your home looks great from the moment a potential buyer first sees the pictures online, to when they are physically touring your home. So let’s talk about what to expect when preparing your home for sale. 

The Honey-Do-List

Most sellers have an idea of the things that need to be done to their home before going to market. But before you start tearing down walls or even applying a fresh coat of paint, it’s best to give us a call first. Part of our role in the selling process will be to let you know where you should invest and what fixes or repairs we think will get you the best return on your investment. 

During your listing appointment, we are going to walk through your home with you and evaluate what we think needs to be done to get your house prepared for the market. There may be things in your home that bother you but we don’t notice, and there may be things that we notice that you have become completely blind to. So during this appointment, we will compare our lists and discuss where to invest prior to listing your home. 

Our primary focus will be the buyer's experience when they see the home. Can they picture themselves in it? Does the home look like it’s been cared for and invested in? We want to showcase the quality of your home. 

Whatever you are not able to do yourselves, we will reach out to a contractor for a quote on the project. Once we have that quote, we will discuss whether or not the update or repair will yield a return on the investment. 

The majority of items we recommend to sellers are decluttering, painting, and light landscaping. More than likely sellers will not have to do any major renovations, but regardless we will always weigh the cost versus the potential profit. And remember, you can choose not to do something or anything we recommend. We will provide recommendations on what we believe will help you get your home sold for the best price, but ultimately, you get to decide what to do or not do. 

Decluttering

99% of our sellers need to do some level of decluttering in their homes. Decluttering often involves things like cleaning off your refrigerator, cleaning off and removing some items from surfaces and countertops, and maybe even removing some furniture to make a space look and feel larger. Too much stuff can be a distraction from the buyer getting to see your home and themselves in it. Decluttering is free to you, so valuable for selling your home, and definitely worth your time. 

Some sellers will shove their stuff in closets when trying to declutter. While this typically works for picture day, remember that buyers will most likely be opening up your closets when they walk through the home. So, if closets are overstuffed, this sends a message to the buyer that there isn’t enough storage in your home. Rather than shoving your stuff in a closet, the garage is a great place to store things that you need to get out of the house. 

Staging

Once you’ve cleared out and decluttered your home, we are going to provide some finishing touches through staging. Staging can range anywhere from full-scale furniture, art, rugs, etc. to smaller touches like adding some fake plants or white towels for presentation. If you are going to live in the home while selling, we are going to work with you to make sure that your home is set up in a way that appeals to as many buyers as possible. We might bring in some pillows, plants, rugs, or additional artwork to put the finishing touches on the home and to ensure that your home is looking its best. Staging always pays off both in photos and showings.

Photo Day

The majority of buyers are searching for homes online before they come to see a home in person. The photos we take of your home can make or break your listing, so photo day is the highest priority for your home to look perfect. On the day we take photos, we are going to bring in a professional photographer who specializes in real estate. We are going to ask that you and your pets vacate the home for a couple of hours while we work with the photographer and micromanage the entire process to make sure everything looks perfect. We want to make sure that the photos are appealing to buyers searching online and then deliver when they come to see it in person. 

Another thing we will do on photo day is take a 3D tour of your home. 3D tours are one of our key marketing tools. These are a great way to save buyers time who just don’t like things that can’t be changed (like the floor plan), and it’s also allows for those that love the home to virtually walk through it a few more times without having to physically displace you each time for a showing. 

Once photo day is over, the pet bowls can come back out and the coffee maker we made you stow away can return to the counters as we get ready to start the showings!

Preparing your home for the market is a lot of work. But the hard work is worth it and will surely pay off. If you’re ready to start the homebuying or selling process, give us a call. We’d love to help you take that next best step for you and your family. 

Until next time,

Brianna and Keelie

What to Expect: First Steps When Selling Your Home

Thinking about selling your home can be a bit overwhelming. Most people who are selling a home have some experience with real estate because they purchased that home. However, selling a home is quite different than buying a home. And if any amount of time has passed since you purchased your home the market has likely changed. Wondering where to even begin? Never fear, we are here to help!

If the thought of selling your home has crossed your mind, we believe that it’s never too early to begin to have that discussion with your agent. Your agent can help you get a sense of what the current market looks like, what your home might sell for, how to prep your home for the market, and ultimately answer any questions that might be lingering in your mind.

First Step

The first step we take when working with sellers is to set up a listing appointment. This appointment is typically around an hour and a half and is at your home. The goal of this appointment is for us to better understand your goals and motivations for moving and also for you as the seller to learn more about your agent and strategies for getting your home on the market and ultimately sold. During the listing appointment, we tour your home and talk through the process of listing your house and the timeline you are hoping to achieve in getting your house sold.

One of the biggest differences between one agent to the next is their marketing expertise. As the seller, it’s important for you to know how your home is going to be marketed and also how the agent is going to help you prepare to get the most value out of the home.

How to Prep for the Listing Appointment

When preparing for the listing appointment, make a list of repairs or upgrades you’ve made since living in the home. Along with that, make a list of what you were already considering repairing if you continued living in the home.

What you don’t need to do is begin making repairs or upgrades in preparation for this appointment. When we meet at your home, we will walk the property and together talk through what is necessary to do prior to going to market, what might deter buyers, and what will get you a return on your investment. The most common things we recommend are painting or touching up paint, and light landscaping to help with curb appeal or decluttering. We will make some recommendations and walk you through the process.

It is also important that every who is a decision-maker in regard to selling your home is present at this listing appointment. Whether a spouse, a parent, or someone else, all should be present when we meet.

How We Will Prep for the Listing Appointment

Prior to the listing appointment, we as the agent will do our own research before coming to your home. We will be researching tax records, previous MLS listings, comps in the area, etc. This allows us to have a ballpark idea of what we believe your house would sell for prior to actually seeing the home. Keep in mind that we won’t be able to give you a firm number before we walk the property and know what you as the seller are willing to do to prep the house for market.

After the Listing Appointment

Once we walked the property, talked through repairs or upgrades that will be done prior to listing your home, and talked through your hopes and expectations for listing your home, we will conduct a full, in-depth analysis of the comps and current market.

Once we have our recommended price point for listing your home, we will provide the sellers with a detailed net sheet. The net sheet details what you as the seller can expect to profit once your home is sold. There are costs associated with selling a home and many sellers have a mortgage on their current home to pay off. This net sheet takes the expected selling price of the home and subtracts any associated costs and remaining loan amounts and shows you the final profit.

Other Key Players

If you are selling your home and also looking to purchase a new home at the same time, this is also when you will want to reach out to a lender. Once we have a general idea of a listing price and the net profit as well, your lender can take a look at your financial picture and provide options for purchasing your next home. For more information on what to look for in a lender, refer back to the beginning of this series, What to Expect: How to Start the Homebuying Process. The information your lender provides will help you and your agent strategize the buying process as well. Can you buy your new home before this home sells? Or do you need to sell this home first, so any new offer would be contingent upon this home selling? We discuss all this and more in our previous blog, How to Buy and Sell Simultaneously.

The more time we have to prepare, the better. That is why it is never too early to start having these discussions with your agent if you are considering selling your home. If you’re thinking about selling, give us a call. We’d love to start strategizing the right game plan for you.

Until Next Time,

Brianna and Keelie

What to Expect: Closing Week

The time has come. We are in the home stretch of the homebuying process and we enter into closing week! This final week of the homebuying process is always exciting but it can at times be stressful too. Sometimes it all comes down to your preparedness. We have a few last hoops to jump through and need everything to fall into place to cross that finish line. We hope that by walking through what you can expect during closing week, this process will be as smooth as possible for you.

Getting the Numbers Right

Your highest priority during closing week is to make sure all the numbers on the settlement statement are right so that you can officially fund your home when the time comes. The settlement statement will be an update to the loan estimate you originally received from your lender when you first applied for the loan. This statement will include all the final numbers that you will be responsible for on the day of closing. You and your agent will review the document in detail to ensure that everything looks correct and so that you know what you are responsible for at closing.

Once you know the official amount of cash you will need at closing, you need to then decide what method you are going to use in order to bring those funds to closing: wire transfer or cashier’s check. Check with the title company before making any final decision to ensure that they will accept payment in the way you are planning.

Plan Ahead

Waiting until the last minute to schedule a wire transfer or request a cashier’s check could end in a delay in being able to close. Some banks may move slowly on wire transfers and not be able to perform the transform until the following day. Some banks no longer have branches with storefronts and getting a cashier’s check may take a little bit of time. Also, consider how available your funds are. You may have the money but it doesn’t mean you have direct access to it. Do you need to sell investments or move money so that the cash is available? Thinking through these prior to closing day is vital in making sure your closing goes smoothly and you’re able to close without delay.

We always recommend to our homebuyers as a best practice to transfer funds to the title company the day before closing if they can. Money sent to a title company is secure. The title company is a third party that will only move and disperses funds the way the contract instructs them to. Transferring early ensures that you will be ready to fund the home when the final paperwork is signed at your closing appointment.

A Warning For Wire Fraud

Wire fraud is rampant in real estate. It can be easy for people to hack into emails and change instructions on where to wire money when buying a home. Therefore, you should always confirm wire instructions over the phone using a phone number that you are positive is correct per the title company. If funds are transferred into the wrong account, there is unfortunately no undoing this.

The Final Walk Through

Within a day or two before closing, you and your Realtor will do a quick and final walk-through of the home. This is a last chance to lay your eyes on the home and make sure that it is in the same condition it was in when you went under contract. During the walkthrough we are making sure there is no fire damage, no flooding, or storm damage, the hardwood floors didn’t get scratched up when moving out furniture, etc. If needed we will double-check repairs that the seller was liable for and also ensure that anything purchased from the seller (curtains, furniture, etc.) was left behind.

Closing Day

The day has finally arrived! Time to buy a home. We always attend closing day with our homebuyers and our most important job that day is to celebrate with you. Closing happens either at the title company or using a mobile notary. A mobile notary is simply a notary that can meet you at your home or out of state if you are not able to make it to the title company for closing day. Closing usually takes about an hour and occurs during normal business hours.

The majority of the documents you will be signing are for the lender. The seller will sign at another time before or after your appointment. Once all the documents are signed by both the buyers and the sellers, the mortgage company will review all of the documents and make sure that there are signatures everywhere they need them to be. Once this is confirmed, they will then issue a funding authorization which allows the title company to release the funds and distribute them as needed. When this occurs, the home is funded and we get to hand over the keys to your new home!

You’re officially a homeowner! Now time for a pizza party on the floor of your new home on night one to celebrate!

Are you ready to dive into the homebuying process? Becoming a homeowner is an incredible feeling and we would love to be the ones to hand you the keys to your new home. If you’re ready to get started, give us a call.

Until Next Time,

Brianna and Keelie

What to Expect: Under Contract

We are continuing our series on what to expect from start to finish in the homebuying process. You’ve got our team, found your dream home, got your offer accepted, and now, you’re officially under contract. The contract period is the period of time from when your offer is accepted all the way to being handed the keys for your new home. This is often the timeframe that homebuyers dread the most. But never fear, we are here to help guide you through the contract period to make it as smooth as possible. 

On average, the contract period is around 30 days if you are using a loan to finance your home. However, the time it takes to get to closing on your home will also depend on your responsiveness and how quickly you are able to get through all the paperwork and get everything signed. For cash buyers, this time frame can average about two weeks since underwriting for a loan is not required. 

Once you are under contract, two fees are due right away - earnest money and the option fee. The earnest money amount is usually about 1% of the purchase price. It’s essentially a portion of the down payment that you pay up front before closing. The earnest money is held in an escrow account until you close and then is applied towards your down payment. 

If you choose to walk away from the home for any reason covered in the contract, the earnest money will be returned to you. However, if you get cold feet after going under contract, back out and are in breach of the contract, then the seller will get to keep the earnest money.  

The option fee is paid to cover the option period of your contract - a negotiated time frame after executing the contract in which you as the homebuyer can back out of the contract for any reason and still get your earnest money back. The option fee is paid directly to the seller and can range anywhere from $200 to $1,000 and is put towards your down payment at closing. 

We see the option fee as a fairly inexpensive way to gain more time to get to know your property. You can only know so much about a home before getting under contract. During the option period we try to get as much information about the property as we can so that you feel as comfortable as possible to complete the terms of the contract. 

The option period is typically about 10 days or longer depending on what is negotiated in the contract. One of the most important things we will do during an option period is the general inspection. This is often one of the most intimidating parts of the transaction for homeowners. The inspection lasts anywhere from two to four hours depending on the size of the property. 

The inspector will look at the home from top to bottom. They will get on top of the house, under the house (if they can), heat things up, cool things down, and essentially test the home and everything in it. Once they are done, they will create a report of all of their findings. We always recommend that our homebuyers try to meet the inspector at the end of inspection so that the inspector can walk them through their findings in person. However, if you aren’t able to be there, inspectors will often schedule a phone call to debrief on their findings. 

Fair warning. These inspection reports are long. Many are at least 20 pages long. However, there are specific red flags, big ticket items, or safety hazards we are looking for in the inspection reports. Rarely do we come across deal breakers in the inspections. The majority of the findings will be “honey-do” items or things that are no longer up to code but have been grandfathered in because of the age of the home. The general inspector may also recommend other specialists (plumbers, electricians, etc.) to come and perform additional inspections on the home if something is concerning. These are also inspections we try to have done during the option period. 

Pro Tip: An inspection is a great time to get into the home and take measurements for ay furniture, appliances, or anything else you may need for the home.

If there are any bigger ticket items found, you will discuss with your agent who will be financially responsible for these repairs. Are you paying for these repairs? Is the seller going to have these repairs done before closing or provide concessions to cover the costs? These things will need to be negotiated and settled prior to the option period ending. 

The last thing you as the homebuyer will need to do during the option period is to get a home insurance quote for the new property. You don’t have to officially sign the policy, but you do need to have a good idea of what your monthly mortgage payment will be so that you have a better understanding of what you will be financially responsible for each month. 

Once you are out of the option period, the rest of the contract period is mostly for the lender to underwrite the loan. They need time to prove all of the information you provided up front so that you get approved for the loan and can close on the home. A key part of this will be the appraisal of the home. At some point, the appraiser will come out and assess the value of the home. They will take into consideration the most recent comps and the quality of the property before giving their opinion on the value of the property. 

If the home appraises for lower than what you are paying for the property and that is an issue, we can try to renegotiate with the seller on a lower price or see if the lender can restructure your mortgage to better fit your financial situation. 

Remember, do not change your financial picture while you are under contract! Some examples of things that may cause changes in your financial picture are buying a car, opening a new credit card, quitting your job, or buying a bunch of new furniture on your credit card. All of these could cause a delay in the underwriting process or even cause you to lose out on the home. 

We know that the contract period can be an intimidating and stressful time for homebuyers. This is one of the many reasons why it is so important to assemble a great team with a great agent. A great agent is going to make this contract period as easy and smoothly as possible for the homebuyers. The more prepared they are and the more prepared you are, the more stress free this process will be. 

If you’re ready to dive in and start the homebuying process, give us a call! We’d love to help guide you every step of the way.

Until next time,

Brianna and Keelie 

What to Expect: Finding Your Dream Home

Up to this point, we’ve assembled our team (Realtor and lender), met with our agent, and got pre-approved. Next up? House hunting - every buyer’s favorite part of the house-buying process! But what many buyers may not expect is that there are strategies and best practices when conducting the home search. Not as seen on HGTV. If you want to be successful and efficient in finding your dream home, you need to be set up for success. And good news, we can help you do that! Today, we’re guiding you through how to find your dream home and make an excellent offer. Let's dive in.  

Preparing for the Search. 

Before we ever begin going to look at houses, there are a few things you as the homebuyer need to think through and then communicate with your agent. 

Why are you moving? 

Are you looking for a shorter commute? More space for your family? The "why" behind your purchasing and moving into a home is the most important thing for us as the agent to know to help us narrow in on the best next house for you. Before you begin looking for homes, establish your “why” and communicate that with your agent. 

Is there a timeline? 

Your agent needs to know whether there is a hard deadline you need to meet of when you need to move or if it’s more open-ended and flexible. Most buyers tend to think of the timeline as “When do I need to be in a house?” However, we also like to consider “How soon is too soon to be in a house?” When is the earliest you would want to be under contract and moving forward on buying a house? This affects when we will begin looking for houses as well. 

Location, Location, Location. 

The most important factor in real estate. What’s important to you in terms of your location? Commute time? City life versus the suburbs? Lot size or size of the backyard? You can change many things about a home, but you can’t change its location.

Type of Property

What type of property are you thinking you want to live in? Are you hoping for a single-family home or maybe a townhouse or condo? A major determining factor here is what level of maintenance you want to do on your home. Do you want to take care of a yard or prefer that to be maintained by a property manager? 

Schools 

For some families, the school district that the house is in is a very significant factor. Does it matter to you what school district your house is in? If so, how much does it matter? Is it a must-have? Determining this early on could save you time and energy in the search. Keep in mind that homes in sought-after school districts will most likely have higher property values. 

Walkability and Safety 

As you begin to narrow down your search to a certain area or even neighborhood, it’s always recommended to determine your level of comfort in that area. One way to do this is to check crime maps that are available online. Be sure to compare the area you are considering to where you are currently living (because there is crime everywhere) and see what the difference is. Another thing we often suggest to our buyers is to go and take a walk in the neighborhood both during the day and at night. Say hi to the neighbors and ask them how they like living there. You might be surprised at what you are able to find out!

The Common Considerations

How many bedrooms or bathrooms are you needing? What type of parking situation are you looking for? What’s the desired layout of the home? What level of updating or renovations are you comfortable with? Do you want a pool? Does it matter if it’s one story or two? 

Once you’ve taken all of these things into consideration, it’s time to categorize them into “must haves” versus “nice to haves”. What criteria would be a deal breaker and what criteria would be a bonus? 

On the Hunt.

Now that we have our must-haves and nice-to-haves, it's time to begin looking. Many buyers begin by looking online or attending open houses well before they are going to tour homes with their agent. And that's ok! We actually recommend it. 

The Online Search

Many homebuyers begin house hunting with an online search. We like to call this “dating homes online.” This is a really helpful way to see if your house criteria in the location you want are realistic for the budget you have set. After you’ve spent a little time looking online, we may have to adjust your expectations of the timeline for finding this home or adjust your criteria. Don’t worry, we will help you tailor your search!

Open Houses

Open houses are a really easy way to go see something in person. And trust us, Realtors want you to come and check out the open house! These are especially great if you are not quite ready to seriously begin looking at homes, but still want to start determining what you like and don’t like.

Touring Homes.

Once you begin touring homes with your agent, it’s best to tour these homes with your end goal in mind. We don’t just want to know if you think it’s pretty. We want to know if it will function for you and your family on a daily basis. Can you truly envision yourself or your family living here day in and day out? Does it have everything on your must-have list? Does it accomplish the goal of making you move?

Making the Offer.

Finally, when you’ve found the home you’ve been dreaming of, it’s time to write up the offer. First, the agent will take some time to look at comps (comparable properties in the area that have recently sold) which will help determine the market value of the house and see if the asking price is appropriate. After that, the Realtor will call the listing agent and ask questions to help better know the seller’s motivations for selling, their timeline, and also see if there are any other present offers on the house. We’ll also review any paperwork like seller’s disclosures, permits, or warranties that will help us to determine an offer. We want to know as much about the house as we can before we go under contract and start paying for things. 

You and your agent will determine an offer price together but the reality is that what a house is worth to you will fall within a reasonable range. That price point will depend upon your motivation, timeline, and how badly you want this house. Only you can determine where you fall on that range. Once that’s determined, we will walk through the rest of the terms of the contract and together craft the best offer based on where you are and where the seller is.  

After we submit an offer, there will likely be some negotiations between the agents. Any negotiations the agents do will be specific to the situation. Once all the terms are agreed upon, then the contract gets signed and executed! You’re officially under contract and we’ve got our sights set on closing. 

But don’t get too carried away yet. We’ve got the dreaded inspection and all the paperwork to get through before then. But we’ll talk you through that next time. 

If you’re ready to dive into the house buying process, give us a call! We’d love to help you put these tips into practice and get started on finding your dream home. 

Until next time,

Brianna and Keelie

What to Expect: How to Start the Homebuying Process

We are kicking off a new series called “What to Expect'' where we will be talking through the homebuying process from start to finish. What to expect and how to prepare for every step in the home buying process. Today, we will be starting from the very beginning: how to start the homebuying process. Where do you even begin? What should your first step be? Let’s dive into our recommended process for where to start when buying a home.  

Step 1: Assemble Your Team

The very first action item in the homebuying process is assembling your team. Your team includes a great real estate agent and a great lender. Your lender is just as important as your realtor and like we’ve said before, lenders are our most important co-workers. We as the real estate agent will work hand in hand with your lender through the homebuying process. Your agent and the lender are going to connect you to other resources you may need and so you need to be able to trust their judgment and trust that they will not only do their job well but work together well as a team. And if you choose to work with a poor lender or a poor realtor for that matter, the cost could be getting the home you desire. 

Finding a realtor. 

Ultimately, it doesn’t matter which member of the team you find first. However, we personally recommend starting with an agent because they act as a quarterback of sorts throughout the homebuying process. If you are in the DFW and looking for a trusted real estate agent, we’d love to work with you. But if you aren’t in the metroplex, you can still reach out to us and we can help you find an agent in your area. We can reach out to local agents in your area, vet them, and then provide some recommendations to you.

There are a few essentials to look for in the realtor you choose to work with. While looking for an agent that has geographic competence in your area is important, it is not the most important thing. Other things to look for in your agent include their responsiveness and ability to communicate in a way you understand. Also, their ability to handle stressful situations, problem-solve through obstacles that may arise and negotiate on your behalf. Your agent’s ability to manage situations and troubleshoot any problems will be what you will value most in your agent. 

Once you find a realtor you want to work with, reach out to them to make initial contact and let them know you are interested in getting started. This is not an official commitment to working with them. This initial conversation is a way to share your goals, your timeline, and your budget for a home. When working with us at Haven Realty, this is also when we will set a follow-up meeting to review what we talked through in our initial contact and walk through our Homebuying 101 curriculum that we developed for our homebuyers. 

Finding a lender.

If you don’t already have a realtor that you want to work with, your real estate agent can recommend one to you. Typically a homebuyer will reach out to a lender between our initial contact and before we meet to review. You do not have to choose a lender before meeting with your realtor, but it does need to start before we can go look at houses together.

When choosing a lender, look for someone who is proactive, a problem solver, and someone who will stick to the timeline. A good lender can make the homebuying process incredibly smooth and a bad lender can make the process incredibly difficult by not following up or meeting deadlines. Because the working relationship between the lender and realtor is so vital as well, it can be helpful to get some recommendations from your realtor of lenders they may often work with. When contacting lenders, we would recommend contacting no more than three as this may cause more confusion and lead to more stress than necessary.

Your initial contact with your lender should look similar to the initial contact with your agent. It should be informative and give you a sense of whether or not they are easy to interact with, communicative, and easy to understand. Your real estate agent is not going to be in the nitty-gritty of getting qualified for your loan, so it’s important that your lender is able to communicate the financials in a way you understand. Find a lender that is a good fit for you. 

Step 2: Pre-Approval

When you begin working with a lender, they will ask for basic information to get you pre-approved. How much do you and your partner earn? What kind of debt do you have? What do you do for a living? It is vital that you be extremely honest with your lender. If you aren’t upfront, it will be found in the underwriting process and the cost could be not getting the house you’re under contract for. Be candid and they will direct you down the right path. 

Rather than just telling you what you are approved for based on income, a great lender is going to start with your monthly budget and discuss what you can afford according to your household monthly budget. Your monthly mortgage budget is broken into four parts: the principle, insurance, taxes, and interest. Your lender will look at how much of a mortgage payment you can afford and this number will determine the budget for your house.

Step 3: Homebuying 101 Curriculum

So, you’ve assembled your team and applied for a loan to get pre-approved. Now it’s time for Homebuying 101. This is specific to Haven Realty Group and something we’ve created for our clients. However, a good realtor should walk you through the process in some way. We review the entire process from start to finish with the goal being for you as the homebuyer to have as much understanding of the process as you can before we begin.

Once you’ve met with your realtor and agreed to move forward, you will sign an agreement with your agent. This binds the agent to act in your best interests, gives the agent the right to represent you, and outlines any agent fees. Once the agreements are signed, the fun part begins… time to start looking for a house! Which we will cover next in our series of What to Expect. 

If you’re ready to buy now, give us a call! We’d love to start the process of buying a home with you. 

Until next time, 

Brianna and Keelie

2023 Real Estate Market Predictions

New Year, New Market? The 2022 real estate market ended in a very different place than it started. Such a dramatic shift has led many of you to ask, “Are we headed for a market crash like in 2008?” “Is now a horrible time to buy or own a home?” Never fear, we are going to answer your most pressing questions and share our predictions for the 2023 real estate market.

Let’s start with a recap of the 2022 real estate market. We rang in the new year in one of the most competitive markets most have ever seen. A typical day in real estate looked like a home selling well over the asking price with multiple offers within hours of it hitting the market. As a buyer, you needed to see a house the second it hit the market and decide as quickly as possible if you wanted to move forward. No negotiations, no contingencies, and even still possibly being beaten out by a cash offer.

And then in May, the market seemed to just fall off a cliff. Feds began to raise rates quickly and mortgages began to increase. While rates started around 3.2%, we watched them rise to over 7% in just months. With mortgage rates increasing, homes became more expensive to purchase, and fewer homes were going under contract.

In October we saw our peak of interest rates and they leveled out to about 6.5% by the end of the year. And now, here we are in January of 2023, all eagerly awaiting to see what the real estate market will do next.

Our 2023 Predictions:

• The market will not collapse like it once did in 2008. In 2008, we saw a residential real estate collapse. Home prices collapsed, there were many foreclosures, and homes sitting on the market for over a year. There was significant job loss and subprime loans were prevalent.

Today’s market looks more like that of 2001 and 2002 when the events of 9/11 caused a stop in the market, followed by a bust, and then it began to improve. The difference between then and now is that we will probably see the market return to normal more slowly than it did back then. But unlike in 2008, we’re in a tight labor market with very low unemployment and subprime loans are virtually non-existent.

This is not another 2008 real estate market collapse. And for that, we are grateful!

• Mortgage rates are going to drop! Last year the feds were incredibly aggressive in increasing rates. As they have pulled back from future corrections, interest rates are dropping. Experts suggest that rates will stay at about 6% for the first few months of 2023 and then drop down to about 5% by the end of the year. We predict that more buyer activity and 5-6% interest rates will be the new normal.

• We’re seeing a new trend in the 2023 real estate market! Builders are buying down interest rates for their buyers. Some builders are even buying down as low as 4.9%. In other words, new construction is cheap! And builders are continuing to develop areas in North Texas.

• Lenders are likely going to ease point charges. In the latter half of 2022, it became more expensive to underwrite a loan. As interest rates skyrocketed, banks anticipated many buyers would refinance their loans when interest rates dropped. Therefore, banks charged more for the loan itself since they predicted that they wouldn’t see the full life of the loan with the higher interest rates. As interest rates level out, we see lenders easing on the point charges to buy down your loan.

• There will be more inventory, but not a lot more. Here in North Texas, we still have a strong buyer demand, so inventory is still really limited. On top of that, buyers who were able to get their interest rates at a much lower rate are reluctant to move unless they absolutely have to.

• The market will be more balanced. We don’t believe we will see a buyer’s market or a seller’s market. Rather, sellers will need to offer more incentives, do more marketing, and expect their home to be on the market for around 30-60 days. Buyers will be able to negotiate a little more than in previous years and not have to go so far above asking to have a competitive offer.

In conclusion, economists in North Texas predict that 2023 will be a good year in real estate. According to one study, Dallas is predicted to be #3 among the top 10 markets to boom this year. There is demand for those moving to the metroplex, homes are affordable, and there continue to be new homes in developing areas of North Texas.

2023 is going to be a great year. If you want to talk through how these real estate predictions affect your unique situation, give us a call. We are always here to help you make the best decision for buying or selling a home.

Happy New Year!

Until next time,

Brianna and Keelie