Buying a home in Fort Worth is tough these days. How to make your bid successful.
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Buying a home in Fort Worth is tough these days. How to make your bid successful.
Putting your home on the market? Here’s how to go about it
As Fort Worth rents soar nearly 20%, here’s where you’ll pay the most in Tarrant County
New in town? These tips might save you money when apartment hunting in Fort Worth
Nothing about buying or selling a home these days in Fort Worth’s real estate market is easy.
Buyers are scrambling to find homes in the region at a time when there’s not enough listings to meet demand. When they find a house they love, they often face intense competition with multiple bidders — and can end up paying well over list price.
Sellers have the advantage, to be sure, but it’s not easy for them, either. If you list, you should be prepared to move quickly. And even in this competitive market, you can still make mistakes that cost you time and money.
Renters, on the other hand, are seeing plenty of new options with apartment complexes being built across the region. But with equally high demand for apartments and single-family homes, they’re paying much more these days. Average apartment rents have soared nearly 20% in Fort Worth in just two years.
Here are some important things to know going into what will be yet another record-setting real estate season.
How hot is Fort Worth’s real estate market?
Very.
It’s a matter of supply and demand. The supply of available single-family homes in Tarrant and surrounding counties isn’t high enough to meet demand.
A common measure of demand is by months of inventory. At the current pace of sales, how long would it take to sell all the homes now on the market. About 6.5 months of inventory is considered a stable, balanced market.
Tarrant County’s is far from that. In January, there was less than one month’s inventory — 0.6 of a month to be exact, according to the Greater Fort Worth Association of Realtors. That means sales are so brisk, and supply so low, that it would take only weeks theoretically to sell through all available housing stock. A year ago, it was 0.9 of a month.
Such a lopsided market means prices have been surging, in what’s considered a strong seller’s market (favoring the seller). The median home price in January in Tarrant County was $327,000, up 23% from a year earlier.
To the west in Parker County, the median price is $405,000, up 29% from early 2021. To the south in Johnson County, it is nearly $305,000, up 27%.
For the Fort Worth market as a whole, listings are averaging only 30 days. Total volume of sales last month was 15% higher than January 2021.
Is Fort Worth’s market unique?
Not really, in terms of rising prices, but Fort Worth still is more affordable than many other markets, including the Austin metro where median prices for single-family homes are closer to $500,000.
In the fourth quarter of 2021, two-thirds of U.S. markets saw double-digit price increases compared with the third quarter. Nationally, the median price was nearly $362,000.
What to know before you start making offers
Step 1: Get some expert advice.
Consult with both a Realtor and a mortgage broker. Realtors know the local real estate market and can help you navigate the process.
“Between the first time you see a house and the time you get the keys, there’s probably about 250 different steps and things that have to be done in there to make sure that everything goes smoothly,” said Shannon Ashkinos, the president of the Greater Fort Worth Association of Realtors.
Talk to a local Realtor first. They can direct you to a reliable mortgage broker that they’ve worked with before.
Mortgage rates are on the rise. In January, the 30-year fixed-rate mortgage was averaging 3.22%, according to Freddie Mac.
“Mortgage rates increased during the first week of 2022 to the highest level since May 2020 and are more than half a percent higher than January 2021,” says Sam Khater, Freddie Mac’s chief economist, in a report. “With higher inflation, promising economic growth, and a tight labor market, we expect rates will continue to rise.”
It’s a good idea to shop around and talk to a couple brokers and Realtors first, says Shelby Kimball, a Realtor and 2020 president of the Greater Fort Worth Association of Realtors. Choose the experts you feel most comfortable working with.
Determine what type of mortgage you qualify for
Your lender will check your credit score to approve a specific loan amount. You’ll get a prequalification or preapproval letter, a document stating that the lender is tentatively willing to lend to you. It’s a way for a lender to help you estimate what you can afford and what type of mortgage loan you qualify for.
You can get an appraisal waiver, which lets you skip the in-person appraisal process when buying a home and instead uses comparable sales data.
Get first-time homebuyer assistance
If you’re a first-time homebuyer, explore first-time homebuyer programs. They can provide down-payment assistance.
The city of Fort Worth’s Homebuyer Assistance Program can provide up to $20,000 in mortgage assistance for income-eligible, first-time buyers within the city. For one person, the income limit is $45,300. For a family of four, the limit is $64,605.
The state of Texas Homebuyer Program offers several resources, including flexible down payment assistance, mortgage tax credits and live support. The site, thetexashomebuyerprogram.com, also has a quiz to see whether you’re ready to purchase a home.
Know which Fort Worth-area neighborhoods are most competitive
All of Tarrant County is experiencing high demand for homes, particularly in more affordable price ranges. Houses priced below $600,000 have the highest demand, Ashkinos said.
But the most competitive listings are in historic neighborhoods like Berkeley Place, Mistletoe Heights and Fairmount, because they’re in such limited supply and have a high demand.
Other competitive neighborhoods are those with popular elementary schools.
How to bid competitively
Because of the high demand and low supply of homes, sellers will get a slew of offers within the first few days that the house is on the market.
Know how much the house is worth
Your Realtor will analyze how much the house is worth and how much you should bid, based on the age, size, location, neighborhood price bracket and length of time on the market.
“If somebody found the house that they really want, they have to be prepared to do the very best that they can on that house right then,” Ashkinos said. “Because it is not a market where people are finding deals. Mainly, what you’re finding is, you’re going to have some serious competition on the house.”
With multiple offers likely, you should expect to go above the asking price.
“It’s anyone’s guess how high that might go,” Kimball said. “But the most important thing, of course is, are you going to be comfortable with that price that you’re paying? We don’t want our buyers to have buyer regrets, but we want you to get comfortably in a house you can afford.”
In some areas, it’s still possible to get a house at or under the asking price.
“If you’re real patient, you can still find houses that go for under their asking price,” Kimball said. “But they may need you to do some updating, it might be a little dated or a little rough.”
Don’t wait too long, or real estate prices might go up. If you’re too picky, you can end up paying more later, Kimball said.
How to get the home you want
“Because we don’t have a lot of houses for sale, but you have a lot of people looking to buy, you have to be more competitive,” Ashkinos said. Expect that you’ll be up against other prospective buyers.
Set up notifications so you’ll know immediately when houses comes on the market.
If you find a home you want, act fast. Make an offer within the first 24 hours. Houses often sell within two to three days. Most houses won’t stay on the market for more than two weeks, Kimball says. If you can’t see the house in-person, ask for a virtual walkthrough.
Aside from offering extra cash, there are other incentives you can offer to stand out to sellers.
“Realtors can advise you in lots of different ways to try to make your offer more competitive and it’s not always just about price,” Kimball said. “It’s finding out as much as you can about what does that seller want.”
There are several incentives to make your offer more competitive. You can pay for the seller’s title policy. You can allow the sellers to stay at the house for a few weeks longer, rent-free, after you close while they look for a new place. You can shorten the option period, during which you can back out of a deal, or not have an option period at all. And buy your own home warranty, which is typically paid for by the seller.
If another offer gets accepted, don’t lose hope. The house can come back on the market.
If the seller accepts your offer, you’ll want to get a home inspection. Experts say you shouldn’t waive a home inspection, unless the seller had very recently done an inspection report on the house.
“You want to know everything you can possibly know about that home when you’re moving in, because you don’t want to move into a money pit,” Ashkinos said.
With the market moving so rapidly, the house you buy will likely be worth more in six months than what you purchased it for, even if that was over list price.
This story was originally published February 18, 2022 at 5:00 AM.
