Seller's Guide

E X C E E D I N G E X P E C TAT I O N S F O R B U Y E R S & S E L L E R S

From the time we started Triangle Realty in 2009, we have been instrumental in the transactions of millions of dollars of Texas, Oklahoma, New Mexico, and Colorado real estate.

By consistently exceeding the expectations of our clients, our hard work and dedication have led us to become one of the top brokerages in the Texas panhandle and the surrounding areas.

We are proud of our success and that we are able to give back to our community.

At Triangle Realty, we pledge to use all our resources, knowledge, and talents to do the best possible job in your real estate ventures.

T h e l a t e s t B u y e r Tr a ffi c Re p o r t f r o m t h e N a t i o n a l A s s o c i a t i o n o f Re a l t o r s (NAR) shows that buyer demand remains strong throughout the vast m a j o r i t y o f t h e c o u n t r y. T h e s e b u y e r s a r e r e a d y, w i l l i n g , a n d a b l e t o purchase... and are in the market right now! More often than not, in many a r e a s o f t h e c o u n t r y, m u l t i p l e

SELLER’S GUIDE

buyers are competing with each other t o p u r c h a s e t h e s a m e h o m e . Ta k e advantage of the buyer activity that is currently in the market! Housing inventory is still under the six month supply that is needed for a normal housing market . This means that , in t h e m a j o r i t y o f t h e c o u n t r y, t h e r e a r e not enough homes for sale to satisfy the number of buyers in the market .

H i s t o r i c a l l y, t h e a v e r a g e n u m b e r o f years a homeowner stayed in his or her home was six. That number has hovered between nine and ten years since 2011. There is a pent-up desire in many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

Many home-owners were reluctant to list their home over the last couple of y e a r s , f o r f e a r t h e y w o u l d n o t fi n d a new home to move into. That is all changing now as more homes come into the market at the higher end. The choices buyers have will continue to increase. Don’t wait until other inventory comes to market before you decide to sell.

To d a y ’s c o m p e t i t i v e e n v i r o n m e n t h a s forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their m o r t g a g e fi n a n c i n g . T h i s m a k e s t h e selling process much faster and much simpler as buyers know exactly what they are approved for before they begin the home shopping process.

According to Ellie M a e’s latest Origination Insights Re p o r t the amount of time needed to close a loan is forty-nine days.

SELLER’S GUIDE

If your next move will be into a premium or luxury home, now is the time to move. The inventory of homes for sale at these higher price r a n g e s h a s f o r c e d u s i n t o a b u y e r ’s market . This means that if you are planning on selling, your home will sell quickly AND you’ll be able to fi n d a p r e m i u m h o m e t o c a l l y o u r own.

Prices are projected to a p p r e c i a t e b y 4 . 6% o v e r t h e n e x t year according to CoreLogic.

Moving to a higher priced home will wind up costing you more with the initial down payment and monthly mortgage payments if you wait.

Look at the reason you decided to sell i n t h e fi r s t p l a c e a n d d e t e r m i n e whether it is worth it to wait. Is money m o r e i m p o r t a n t t h a n b e i n g w i t h f a m i l y?

Is money more imporant than your h e a l t h a n d w e l l n e s s? I s m o n e y m o r e important than having the freedom to go on whatever way you think you should? Only you know the answers to t h e q u e s t i o n s a b o v e . Yo u h a v e t h e power to control the situation by choosing to put your home on the m a r k e t . Pe r h a p s t h e t i m e h a s c o m e f o r you and your family to move on and start living the life you desire.

That is what is truly important.

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Home values are up, home sales have slowed, and distressed sales have fallen to their lowest points in years.

H o w e v e r, t h e r e i s o n e t h i n g t h a t i s causing the industry to tap the brakes: a l a c k o f h o u s i n g i n v e n t o r y. B u y e r demand has remained strong t h r o u g h o u t t h e y e a r, b u t s u p p l y h a s n o t kept up despite more listings coming to market .

Here are the thoughts of a few industry experts on the subject:

The bottom line is, if you are thinking of selling, now may be the time.

Demand for your house will be strong at a time when there is less competition. That could lead to a quick sale for a great price.

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L o w P r i c e s + L o w M o r t g a g e Ra t e s = H i g h A ff o r d a b i l i t y

We h a v e a l l s e e n t h e h e a d l i n e s r e p o r t i n g t h a t b u y i n g a h o m e i s l e s s a ff o r d a b l e today than it was at any other time in the last ten years, and those headlines are accurate. But, have you ever wondered why the headlines don’t say t h e l a s t 2 5 y e a r s , e v e n t h e l a s t 1 1 y e a r s?

The reason is because homes were less a ff o r d a b l e t h a n t h e y a r e t o d a y 2 5 , 2 0, o r e v e n 1 1 y e a r s a g o . O b v i o u s l y, b u y i n g a home is more expensive now than during the ten years immediately following one of the worst housing crashes in American h i s t o r y. O v e r t h e p a s t d e c a d e , t h e m a r k e t w a s fl o o d e d w i t h d i s t r e s s e d properties (forclosures and short sales) that were selling at 10-50% discounts.

There were so many distressed properties that the prices of non-distressed properties in the same neighborhoods were lowered and mortgage rates were kept low to help the e c o n o m y.

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Prices have since recovered and mortgage rates have increased as the economy has gained strength. This has and will contine to impact housing a ff o r d a b i l i t y moving forward.

H o w e v e r, l e t ’s g i v e a ff o r d a b i l i t y s o m e historical context .

The National A s s o c i a t i o n o f Re a l t o r s i s s u e s t h e i r A ff o r d a b i i t y Index each month.

According to NAR: “The Monthly H o u s i n g A ff o r d a b i l i t y I n d e x m e a s u r e s whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent monthly p r i c e a n d i n c o m e d a t a . ” N A R ’s c u r r e n t i n d e x s t a n d s a t 1 4 7. 6 . T h e i n d e x h a d been higher each of the last ten years, peaking at 197 in 2012. But , the average index between 1990 and 2 0 07 w a s j u s t 1 2 3 , a n d t h e r e w e r e n o years with an index above 133. That m e a n s h o m e s a r e m o r e a ff o r d a b l e today than at any time during the 18 y e a r s b e t w e e n 1 9 9 0 a n d 2 0 07.

Rising home prices have been in the news a lot lately and much of the focus has been on whether home prices are a c c e l e r a t i n g t o o q u i c k l y, a s w e l l a s how sustainable the growth in prices really is. One of the often-overlooked b e n e fi t s o f r i s i n g p r i c e s , h o w e v e r, i s the impact that they have on a h o m e o w n e r ’s e q u i t y p o s i t i o n . H o m e e q u i t y i s d e fi n e d a s t h e d i ff e r e n c e b e t w e e n a h o m e’s f a i r m a r k e t v a l u e and the outstanding balance of all l i e n s ( l o a n s ) o n t h e p r o p e r t y. W h i l e homeowners pay down their mortgages, the amount of equity they have in their homes climbs each time the value of their homes go up!

A c c o r d i n g t o t h e l a t e s t E q u i t y Re p o r t f r o m AT TO M D a t a S o l u t i o n s , “Over 14.5 million US properties were equity rich - where the combined estimated amount of loans secured

by the property was 50% or less of t h e p r o p e r t y ’s e s t i m a t e d m a r k e t v a l u e - u p b y m o r e t h a n 8 3 4 ,0 0 0 f r o m a year ago to a new high as far back as data is available, Q4 2013” This means that over a quarter of Americans who have a mortgage would be able to sell their homes and h a v e a s i g n i fi c a n t d o w n p a y m e n t toward their next home. Many who sell could also use their new-found e q u i t y t o p a y o ff h i g h - i n t e r e s t c r e d i t cards or help children with tuition costs.

If you are a homeowner looking to take advantage of your home equity by moving up to your dream home, l e t ’s g e t t o g e t h e r a n d d i s c u s s y o u r options!

The map below shows the share of properties with a mortgage in each state that were equity rich in Q4 2018.

The price of any item is determined by the supply of that i t e m , a s w e l l a s t h e m a r k e t ’s demand for that item.

The N a t i o n a l A s s o c i a t i o n o f Re a l t o r s ( N A R ) s u r v e y s “o v e r 5 0,0 0 0 r e a l estate practitioners about their expectations for home sales, p r i c e s a n d m a r k e t c o n d i t i o n s” f o r t h e i r Re a l t o r s C o n fi d e n c e I n d e x .

Their latest edition sheds some light on the relationship between s e l l e r t r a ffi c ( s u p p l y ) a n d b u y e r t r a ffi c ( d e m a n d ) .

Buyer Demand The map on the right was created after asking the question: “How w o u l d y o u r a t e b u y e r t r a ffi c i n y o u r a r e a? ” T h e d a r k e r t h e orange, the stronger the demand is for homes in that area. There were 34 states that came in with stable or strong demand levels

Seller Supply The index also asked: “How would you rate seller t r a ffi c i n y o u r a r e a? ”

As you can see from the map on the left, 46 states reported “ w e a k ” s e l l e r t r a ffi c , a n d o n l y f o u r s t a t e s r e p o r t e d “s t a b l e” s e l l e r t r a ffi c . T h i s m e a n s t h e r e are far fewer homes avaialable than what is needed to satisfy the buyers who are out looking for their dream homes. Looking at the maps above, it is not hard to see why prices are appreciating in many areas of t h e c o u n t r y. U n t i l t h e s u p p l y o f homes for sale starts to meet the buyer demand, prices will continue to increase.

SELLER’S GUIDE

I N T E R E S T R AT E S

When it comes to buying or selling a home there are many factors you s h o u l d c o n s i d e r. W h e r e y o u w a n t t o live, why you want to buy or sell, and who will help you along your journey are just some of those f a c t o r s . W h e n i t c o m e s t o t o d a y ’s real estate market though, the top t w o f a c t o r s t o c o n s i d e r a r e w h a t ’s happening with interest rates and i n v e n t o r y.

See chart below * With each quarter of a percent increase in interest rate, the value o f t h e h o m e y o u c a n a ff o r d decreases by 2.5% (in this e x a m p l e , $ 1 0,0 0 0 )

Mortgage rates were at an all time low through 2020 during the C OV I D -1 9 pandemic.

The uncertainty surrounding interest rate changes can either encourage buyers to purchase before an expected spike or discourage before an expected drop in rates. The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also i m p a c t s y o u r p u r c h a s i n g p o w e r.

P u r c h a s i n g p o w e r, s i m p l y p u t , i s t h e a m o u n t o f h o m e y o u c a n a ff o r d t o buy for the budget you have available to spend.

As rates increase, the price of the house you c a n a ff o r d t o b u y w i l l d e c r e a s e i f y o u plan to stay within a certain monthly housing budget.

The chart below demonstrates the impact rising interest rates would have on the maximum sales price you c o u l d a ff o r d w h i l e s t a y i n g w i t h i n your monthly budget of about $ 1 , 3 0 0.

4.25

1,525

1 , 4 78

1,427

1,377

1,341

4 .0 0

1,480

1,432

1,385

1,339

1,301

3.75

1,436

1, 389

1,343

1,297

1 , 2 62

3.50

1,392

1,347

1,302

1, 257

1,224

3.25

1, 349

1,306

1 , 2 62

1,219

1 ,1 8 6

3 .0 0

1, 307

1,265

1,223

1 ,1 8 0

1 ,1 4 9

$310,000

$300,000

$290,000

$280,000

$272,500

-3.3%

-6.5%

-9.6%

-13.7%

10.5

9.5 8.5

7.5

6.5

5.5

4.5

3.5 2.5

1.5 JAN 2011

JAN 2012

JAN 2013

JAN 2014

JAN 2015

JAN 2016

JAN 2017

JAN 2018

JAN 2019

JAN 2020

JAN 2021

S U P P LY & D E M A N D I N R E A L E S TAT E Re a l e s t a t e p r i c e s d e p e n d o n t h e l a w of supply and demand. When the demand for property is high but property is scarce, prices skyrocket and it becomes a seller's market .

When the number of available properties increases to glut the market , prices typically drop.

A 'normal' real estate market r e q u i r e s t h e r e t o b e a s i x- m o n t h supply of homes for sale for prices to i n c r e a s e o n l y w i t h i n fl a t i o n . A h o u s i n g s u p p l y a b o v e a s i x- m o n t h supply is considered a Buyer's Market a n d b e l o w s i x- m o n t h s i s a S e l l e r ' s Market .

SELLER’S GUIDE

The chart above shows the change in housing supply since 2011. As you can see, the housing level has steadily decreased over the last decade.

If you are planning to enter the housing market , either as a buyer or s e l l e r, l e t ' s g e t t o g e t h e r t o d i s c u s s what changes in mortgage interest rates and inventory could mean for you.

Home prices are on the top of everyones minds. Can they maintain t h e i r c u r r e n t p a c e o f a p p r e c i a t i o n?

Will mortgage rates impact home v a l u e s?

Will the next economic s l o w d o w n c a u s e p r i c e s t o c r a s h? L e t ’s try to answer these questions based on what has happened in the past as well as what we know about the current real estate market .

T H E I M PAC T O F I N T E R E S T R AT E S We e x p l a i n e d e a r l i e r t h i s y e a r t h a t rising mortgage rates have not negatively impacted home prices in the past and probably wouldn’t this t i m e e i t h e r. F r e d d i e M a c ’s c o m m e n t s were very direct: “In the current housing market , the driving force behind the increase in prices is a low supply of both new and existing homes combined with historically low rates. As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

T h e y w e r e c o r r e c t . S o f a r t h i s y e a r, home values have continued to appreciate above normal historic percentages and it appears the gradual increase has had little impact on prices.

T H E I M PAC T S LO W D O W N

OF

AN

ECONOMIC

Many people fear that when the economy turns, we may see the same depreciation in home values as we d i d a d e c a d e a g o . H o w e v e r, w e reported that the same group of economists, real estate experts, and investment and market strategists who predicted the next recession w i l l o c c u r i n t h e n e x t 1 -2 y e a r s h a v e also projected that home prices will continue to appreciate for the next fi v e years, albeit at smaller percentages.

SELLER’S GUIDE

This is the transfer of funds and ownership.

Depending on when the buyer moves into the home you will need to be all packed up and ready to move.

While under contract, the buyer will work with their morgage provider to finalize the loan and perform other due diligence.

At this point, you and the buyer have agreed to all of the terms of the offer and both parties have signed agreements.

13

SELLER’S GUIDE

Your agent will provide a market analysis, which will help you set an asking price.

View your home through the eyes of the buyer and ask yourself what you’d expect. Your agent will offer some useful suggestions.

If everything goes well, a buyer (and most often the agent who represents them) will present your agent with an offer.

As difficult as it may be, it’s important to review the market analysis and consider your home price objectively.

There’s no commitment required on your part for the initial meeting. It will be educational and help you identify your next steps.

Potential buyers may ask to see your home on short notice. It’s best if you can accommodate these requests.

When everything is in place your agent will put your home on the open market. It’s critical you make it as easy as possible for potential buyers to view your home.

Your agent will present the benefits and risks of each offer. You will have the opportunity to either accept or counter any offer based on its merits.

The buyer will usually perform a physical inspection of the home.

They may even ask you to make certain repairs.

Your agent will explain all of your options regarding the inspection.

So you’ve decided to sell your house.

Yo u ’ v e h i r e d a r e a l e s t a t e p r o f e s s i o n a l to help you with the entire process and t h e y h a v e a s ke d y o u w h a t l e v e l o f access you want to provide potential buyers. There are four elements to a q u a l i t y l i s t i n g . At t h e t o p o f t h e l i s t i s AC C E S S , f o l l o w e d b y C O N D I T I O N , F I N A N C I N G, a n d P R I C E . T h e r e a r e many levels of access that you could provide to your agent so that they are able to show your home.

H e r e a r e fi v e l e v e l s o f a c c e s s t h a t y o u could provide to a buyer with a brief description: LO C K B OX O N T H E D O O R This allows buyers the ability to see the home as soon as they are aware of the listing, or at their convenience.

P R OV I D I N G A K E Y TO T H E H O M E A l t h o u g h t h e b u y e r ’s a g e n t m a y n e e d t o s t o p b y a n o ffi c e t o p i c k u p t h e ke y, there is little delay in being able to show the home.

B Y A P P O I N T M E N T O N LY ( E X A M P L E : 4 8 H R . N OT I C E )

M a n y o u t - o f - t o w n /s t a t e b u y e r s and relocation buyers visit an area they would like to move to and only have the weekend to view homes. They may not be able to plan that far in advance, or may be unable to wait the 48 hours to be shown the house.

L I M I T E D AC C E S S ( E X A M P L E : AVA I L A B L E F O R V I E W I N G M O N D AY & T U E S D AY S AT 2 P M - 4 P M )

T h i s i s t h e m o s t d i ffi c u l t w a y t o b e able to show your house to potential buyers.

In a competitive marketplace, access can make or break your ability to get the price you are l o o k i n g f o r, o r e v e n s e l l y o u r house at all.

O P E N AC C E S S W I T H A C A L L The seller allows showing with just a p h o n e c a l l ’s n o t i c e .

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When you subjectively look at all of your belongings, you can sort through the ones that mean the most to you.

Not only will you increase space for more joy-bringing items in your new home, but you will also have a much easier time packing remaining belongings!

One of the biggest challenges sellers face when listing their house is decluttering. Cleaning out some of the more personal decorating choices allows buyers to imagine themselves living in the house. Those planning to s e l l s o o n a r e i n l u c k ! Ma r i e Ko n d o, t h e i n ve n t o r o f T h e Ko n Ma r i Me t h o d o f Tidying Up, has gained popularity w i t h h e r n e w N e t fl i x s e r i e s . S h e g i v e s some great tips for sorting through years of accumulated possessions that we all collect in our homes. “ T h e Ko n Ma r i Me t h o d e n c o u r a g e s tidying by category - not by location, beginning with clothes, then moving on to books, papers, komono ( m i s c e l l a n e o u s i t e m s ) a n d fi n a l l y, s e n t i m e n t a l i t e m s . Ke e p o n l y t h o s e things that speak to the heart, and discard items that no longer spark j o y. T h a n k t h e m f o r t h e i r s e r v i c e then let them go.”

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“ R e m e m b e r, t i d y i n g u p i s n t a b o u t g e t t i n g r i d o f s t u ff, i t i s a b o u t creating an enviornment that sparks joy and improves your quality of life.”

When selling your house, fi r s t impressions matter! Before you or your agent schedule a photographer to take photos for your listing, make sure to tour your home with fresh eyes. Look for any imperfections that a buyer might notice. When you sort through your more sentimental items, consider packing them away to ensure that you know where they all are. That w a y, t h e y a r e s a f e d u r i n g o p e n h o u s e s and showing appointments. This will also cut down on the amount of packing you need to do right before you move!

Whether you are selling your house to move up to a larger one, downsizing, o r m o v i n g i n w i t h f a m i l y, o n l y b r i n g the items that truly spark joy for you.

This will not only help cut down on the items you move, but also ensures that y o u ’ r e o ff t o a g r e a t s t a r t i n y o u r n e w home!

If you’ve ever watched “The Price is Right,” you know that the only way to win is to be the one to correctly guess the price of the item you want without going over! That means your guess must be just slightly under the retail p r i c e . I n t o d a y ’s s h i f t i n g r e a l e s t a t e market, where more inventory is coming to market and home values are projected to appreciate at lower rates, homeowners will not be able to price their homes as aggressively as t h e y w e r e a b l e t o j u s t l a s t y e a r. T h e y will have to employ the same strategy: Be the closest without going over!

As we have explained before, pricing your home at or slightly below market value actually increases the number of buyers who will see your home in their search!

Over the last six months, more inventory has come to market while t h e m o nt h s’ su p p l y of i nve nto r y

available has dropped. This means that the demand for homes to buy is still very strong throughout the country!

Homeowners who make the mistake of overpricing their homes will eventually have to drop the price.

This leaves buyers wondering if the price drop was caused by something wrong with the house when in reality nothing was wrong, the price was just too high!

If you are thinking about listing your h o m e f o r s a l e t h i s y e a r, l e t ’s g e t together to properly price your home from the start!

SELLER’S GUIDE

I n t o d a y ’s m a r k e t , w i t h h o m e prices rising and a lack of i n v e n t o r y, s o m e h o m e o w n e r s m a y consider trying to sell their home on their own, known in the industry as a For Sale By Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

H e r e a r e t h e t o p fi v e r e a s o n s :

EXPOSURE TO PURCHASERS

PROSPECTIVE

Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 13% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home.

Do yo u?

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R E S U LT S INTERNET

COME

FROM

THE

W h e r e d i d b u y e r s fi n d t h e h o m e they actually purchased?

50% on the internet 28% from a Real Estate Agent 7% from a yard sign 1% from newspapers The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale

By Owner:

Re a l i z e t h a t t h e m a i n r e a s o n b u y e r s look at FSBOs is because they also believe they can save the real estate a g e n t ’s c o m m i s s i o n . T h e s e l l e r a n d buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent. One of the main r e a s o n s f o r t h e p r i c e d i ff e r e n c e a t t h e time of sale is: “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally o ff e r compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become m a n d a t o r y. T h i s i s o n e o f t h e reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.

If more buyers see a home, the greater chances are that there could b e a b i d d i n g w a r f o r t h e p r o p e r t y. T h e s t u d y s h o w e d t h a t t h e d i ff e r e n c e i n price between comparable homes of size and location is currently at an a v e r a g e o f 6% . W h y w o u l d y o u c h o o s e to list on your own and manage the entire transaction when you can hire an agent and not have to pay a n y t h i n g m o r e? B e f o r e y o u d e c i d e d t o take on the challenges of selling your h o u s e o n y o u r o w n , l e t ’s g e t t o g e t h e r and discuss your needs.

Many homeowners believe that they will save the real estate commission by selling on their own.

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They help with all disclosures and contracts necessary in t o d a y ’s heavily regulated environment.

They are well educated in and experienced with the entire sales process.

They act as a “ b u ff e r ” in negotiations with all parties throughout the entire transaction.

SELLER’S GUIDE

T h e y h e l p y o u u n d e r s t a n d t o d a y ’s r e a l estate values when setting the price o f a l i s t i n g o r a n o ff e r t o p u r c h a s e .

T h e y s i m p l y a n d e ff e c t i v e l y e x p l a i n t o d a y ’s r e a l e s t a t e h e a d l i n e s a n d decipher what they mean to you.

We ’ r e s u r e y o u h a v e q u e s t i o n s and concerns about selling your house.

We w o u l d l o v e t o t a l k w i t h y o u about what you read here, as well as help you on the path to selling your house. Our contact i n f o r m a t i o n i s b e l o w . We l o o k forward to hearing from you!

J T & J A M I E H AY N E S T E A M T R I A N G L E R E A LT Y A M A R I L LO, T E X A S T R I A N G L E R E A LT Y L LC .C O M 806 . 513. 5055