Selling a house in Houston

Everything in Texas is getting bigger all the time, but one thing is getting bigger: Houston home prices. According to the Houston Association of Realtors (HAR), the median sales price here rose nearly 15% from September 2021 to 2022.

That’s a great sign for anyone owning a property here, but selling in Houston is no longer a rocket dunk. Home sales have been falling across the country as buyers struggle to afford higher mortgage rates.

If you’re considering listing in Houston, be sure to read this guide to find out how long it takes, how much it costs, and what you can do to prepare for the smoothest sale.

If your goal is to sell your home quickly in Houston, the market isn’t looking as good as it was at the height of the pandemic. While homes typically stay on the market for 29 days in September 2021, in September 2022, that number jumps to 37 days. While it’s still a seller’s market, buyers are enjoying increased inventory, while some are putting their searches on hold due to higher borrowing costs.

However, if you need to find a quick-close route, you have plenty of options. iBuyers, an online company specializing in instant offers and closing deals in weeks, love Texas in general and Houston in particular. It has been one of iBuyers’ top 10 markets, accounting for 5% of sales from 2017 to 2021, according to CoreLogic, which analyzes real estate and real estate data. According to Zillow’s “Q1 2022 iBuyer Report,” Houston ranked fourth in the number of iBuyer deals in major metropolitan areas in the first quarter of 2022.

Also, there are plenty of local companies buying homes for cash, so you can explore offers from real estate investment companies. Keep in mind that these companies are looking for profit — not permanent homes — so you may be earning less than what you’d be selling to a family that wants to actually move in.

Before you start looking for the right buyer, there are some important questions you need to think about.

What is the shape of your home?

Selling a house is like selling a car; you need to be honest with yourself whether it’s in poor, fair or excellent condition – and that will affect how much you get out of it. Does your house require a lot of attention to fix plumbing issues, wiring and other issues? Maybe you should list it as-is: the price will be lower, but you won’t have to haggle with potential buyers. Or does your property just need some minor updates to boost its value? If so, you may ask for the highest dollar.

How fast do you need to sell?

If time isn’t on your side, the shift in Houston’s real estate market isn’t all good news. Since homes take longer to come into contract, it’s important to recognize that you may be waiting for your money for a while. If you’re trying to sell your house while buying another, that can present some huge challenges. Enter the process with a realistic timeline. Do you have to close by a certain date because you are moving? Or can you afford to move into a short-term rental to find the right buyer?

What is the cost of sales?

Home sales are fraught with hidden costs, and we don’t just mean keeping your home on display (see “Ready to sell” below). Whether you’re selling your home in Texas or anywhere else, the transaction comes with substantial fees, taxes, and commissions.

Keep these potential costs in mind as they affect your net benefit from any sale:

  • Agency commission: This represents the most cash eroding your profit potential. You will be responsible for paying your agent and buyer’s agent fees, which average 5% to 6% of the final purchase price of the home.
  • Title Insurance: In Texas, sellers typically pay for title insurance for the owner. Prices will vary, but based on Houston’s median home price, you can expect this to set you back at least $2,000.
  • Unpaid property tax: If you have unpaid property tax bills, you will need to hand over those funds before you can transfer ownership of the property.
  • lawyer fee: While you don’t have to hire a real estate attorney in Texas, you should. You will pay them at the end of the transaction, depending on how much time they spend on your transaction.
  • concession: If a buyer’s home inspection uncovers any red flags, be prepared to process a request to reimburse repairs or part of the buyer’s closing costs.

One fee you don’t have to worry about is real estate transfer tax. These do not exist in the Lone Star State.

What is the market situation in your area?

While the median price helps to know the pulse of buying activity, it’s important to remember that Houston is huge: In fact, the metro area is larger than the entire state of New Jersey.

The Houston Association of Realtors provides community-level data that can help you understand sales in different parts of town. For example, the average price in Spring Branch in September was over $534,000, while prices on the Eastside hovered around $385,000.

So before considering listing your home, be sure to check out homes near you. What a buyer pays for a home at the end of the block is far more important than what they pay for a home 10 miles from your front door.

The adage “It takes money to make money” applies especially in real estate. You will have to spend some cash to profit from the sale.

Your home needs to wow buyers as soon as you walk in the door. Real estate is all about first impressions, and one of the most popular ways to provide a must-buy look is to hire a professional home improvement service. The cost of furnishing a home varies. If you just need a professional to organize and organize your space, the bill will be quite small. However, if your house is empty and you need to rent furniture to make it look like a house instead of a blank, boring space, be prepared to spend more.

However, it’s not just about what the untrained eye can see. Since most buyers hire a home inspector, you may want to conduct a pre-home inspection to proactively spot any issues that may arise after signing.

You’ll also need to fill out a Texas seller’s disclosure notice for any defects in the home, from flood damage to roof issues.

Sell ​​your home with or without a real estate agent

You may be considering whether you can sell your home yourself to avoid a real estate agent’s commission. If you go the sale by owner (FSBO) route, be warned: you will have a lot of work to do. Selling a home has also become more challenging in the current chaotic market. You’ll need to create a compelling listing, advertise online, schedule open houses, and negotiate with buyer’s agents. Even if you don’t hire an agent, you are still the one paying the buyer’s agent fee (it comes from the purchase price).

Does all this work sound a little daunting? Time to find a local real estate agent. Also don’t be afraid to try to negotiate lower commissions. If your house is priced high, you’ll likely find an agent willing to take a small portion of their fee – maybe 0.5%.

Pricing your house for sale

After listing your home, the last thing you want to do is let it sit for too long. Homes without any buying activity tend to be candidates for price cuts — an unfortunate move that 34% of sellers in Houston had to make in August, according to Redfin.

In addition to taking steps to find out what your home is worth and looking at prices in the area, ask your agent what they think is the sweet spot for pricing your home. You don’t want to leave money on the table and pricing is too low, but you do want to motivate potential buyers to jump in and see the place for themselves.

After accepting the offer and signing the sale and purchase agreement, you still have some extra work to do. First, make sure you respond to emails, texts, and phone calls from attorneys and agents as quickly as possible to respond to contract amendments and franchise requests in a timely manner.

Next, you need to get the place ready for the new owner. Schedule a mover and use this as an opportunity to remove things you don’t want to haul elsewhere. Buyers may want to make their final inspection shortly before the close or on the day of the close, so make sure the home is in broom-clean condition by then.

Be sure to review the Checkout Statement – a list of all checkout costs and fees – which you will receive approximately three days before checkout. You can participate in closing on your own, or you can hand over a power of attorney and have your attorney handle all the final details of transferring funds to pay off your existing mortgage and pay all of your closing costs.

Now, the purchase agreement has been signed, the keys have been handed over, and the transaction has been completed. Congrats, and enjoy your next chapter—whether it unfolds at home in another cottage in Houston or elsewhere in the world.

Leave a Reply

Your email address will not be published. Required fields are marked *