Let’s call the buyer “Ted.” Our first meeting was Friday, December 30, at noon. It was an informational lunch in Bedford, Texas—close to his job and where he’d love to live.
“I’m a programmer and work not too far from here,” explained Ted. “Currently, I live in Richardson. With my long and bizarre work hours, I really want to find a home in this area.”
“Piece of cake,” I thought to myself. After all, I’ve been helping people buy homes in the area for over a decade; this would not take long at all.
Ducks in a Row
Ted told me his budget was “up to $200,000,” and his local lender confirmed. He could go higher, but he was a single, young professional and didn’t want to put too much into a home that he’d live in for less than five years, most likely.
The loan would be conventional, with 20 percent as a down payment. His credit was good, he had money in the bank, and his desires weren’t too outlandish. He wanted a three-bedroom, two-bath home. He didn’t care if it was completely updated. Being an engineer, he didn’t want a home with major structural or foundation issues.
His apartment lease expires in three months, so he’d like to get started.
We talked about the weather (it was cold that day) and what he was going to do for New Year’s Eve, when he’d like to start looking, and what his schedule was like most weekends.
Once again, I thought to myself, “Three weekends tops, and I’ll have Ted in a great place.”
So how’s the market these days?
Boy, was I wrong? Welcome to the Dallas-Fort Worth crazy real estate market. Eleven contract offers (and growing), 43 showings, and a ton of rejections later… Ted and I are still searching for his future home.
“I had no idea it would be this difficult,” he says. “I prepared myself to not get my first or second choice… but to lose on 11 homes! It’s comical.”
Since January, we have looked at: Irving, Keller, North Richland Hills, Watagua, Hurst, Euless, Bedford, Saginaw, and Fort Worth.
We have looked on Saturdays, Sundays, and even odd times during the week with hopes of not having to 1) stand in line with other agents and clients outside the homes and 2) not be one of many in the multiple offer situation.
The Art of the Deal
Initially, Ted wanted to see if he could “get a deal.” I chuckled and told him that a “deal” would be offering only a few thousand above the asking price. It took him two rejected offers to understand that I am a real estate sales professional who knows what I’m talking about. (Rookie mistake).
Offers three through 11 were all over the asking price. Still no luck.
Ted and I would talk about value, what a house is worth, and what would happen if he offered over asking, but it didn’t appraise.
Those are all tricky and sticky situations that agents, buyers, and sellers all have to deal with in this whirlwind of a market. What is a home worth? Who knows what will increase in value? Appraisals—whew, that’s a tough one.
A real estate lawyer will tell you that promising to pay the difference from the appraised price to the price offered is not legal or binding. Currently, there is no promulgated Texas Real Estate Commission form that can be legally attached and binding for a buyer to be forced to bring money to the table. Most agents don’t know that fact.
That still doesn’t stop some agents from trying to get buyers to sign homemade forms, pledging to make up any difference from the appraisal to the offered price. I’m not sure who the uneducated one is—the agent who demands that or the agent who allows their client to agree to that.
Cash is King
Looking through MLS data on the homes we made offers, four homes were purchased with cash: two on conventional loans, two on FHA loans, and shockingly, one on VA loans. One home hasn’t closed yet, and one home was taken off the market.
It doesn’t matter what kind of offer, letter, or amount a buyer makes; if cash is on the table, then game over. Quick close, no appraisal, and no lender hoops to jump through—can’t beat it.
Now What?
Ted is still in his Richardson apartment. He is paying extra on a month-to-month lease. He has slowed his searches as he’s pretty much lost interest and got tired of the rejection.
We toured one home during his lunch break a few weeks ago. The home was in okay shape. The foundation looked good, and there weren’t any major defects that we could see. The asking price was $150,000, and we both anticipated over-asking offers.
Ted decided to pass on making an offer. I think he’s getting a little gun shy about making offers and not getting home. We talked about an offer of $5,000 or $10,000 with him paying the homeowner’s title policy and a higher option fee for a very brief option period. He understands how the game is played now and doesn’t even think about getting “a deal.”
That house that was listed for $150,000, which he passed on, sold for $150,000. I don’t know if there were multiple offers (the agent said there were) or if other buyers just got tired of the game as well. Dang, he could’ve had that home.
To be continued…
Well, that’s all from Tarrant County this week, Dirty Readers. Remember, if you have comments, questions, or ideas for future stories, I’m always here to listen! Bring it.
Seth Fowler is a licensed real estate sales professional with Williams Trew Real Estate in Fort Worth. Statements and opinions are his own. Seth has been involved in the home sales and real estate business in DFW since 2004. He and his family have lived in the Fort Worth area for over 14 years. Also, Seth loves bow ties. You can reach Seth at 817.980.6636 or [email protected].
