Homebuyers Find Unique Ways To Bypass Housing Market Frenzy – NBC 5 Dallas-Fort Worth
The housing market is just too hot to handle right now.
Interest rates are low. The supply is still low. Demand is still high. And the prices are going up.
Even people who are trying to build a house are having trouble with soaring wood costs.
This is especially difficult for people who buy and sell at the same time. Going from the old to the new can be difficult when it comes to timing. If you’re not careful, your home could sell too quickly before you can even close the new home – and buyers are often at the mercy of the seller in this current seller’s market.
But some families are finding unique ways to avoid the frenzy of the market altogether while still finding their dream home.
In 2020, Vanessa Sutton and her husband were ready for an upgrade to their home. Their house at The Colony was a bit too small and they were hoping for something bigger.
She was trying to sell her old home and buy a new home, but doing so during a pandemic and a competitive housing market left her fearful of the in-between.
“There were a few moments I thought, what if we can’t find a place to live?” Or don’t we get the money that everything else commands? ” she said.
His real estate agent, Gisella “Gigi” Olivo with JP and Associates Realtors, stepped in with an idea.
“It’s our job to be the calm in the storm,” she said. “We’re trying to make it as smooth and stress-free as possible.”
She suggested using a growing trend across the country – the Hit the house swap.
“It offers this end-to-end solution that allows you to buy your home first, then sell your home then,” Olivo said. “We had to find ways to be a little competitive in this market.”
Here’s how Knock works: Consumers are allowed to finance a new home even though they still have equity and a mortgage on the old one. The owners are essentially swapping one house for another.
“Selling your house right now is not difficult, being homeless in the process is difficult,” said Knock CEO Sean Black. really hard for me to deal with all this uncertainty in six months and i don’t know if it’s going to pass.
Black – who shares a wealth of knowledge about the housing market as a founding member of real estate site Trulia – said homeowners basically have access to all the money they’ve locked up in their old home so they can make a down payment on the new house. and close this mortgage, before registering the old one.
Olivo, who happens to be a certified Knock real estate agent, said the funding helped the Suttons win their dream home.
“We were able to come up with an unconditional, very strong, pre-approved offer from the start, which gives us a huge advantage in this market,” she said.
Once buyers move into their new home and start paying off their new mortgage, they can also make repairs to the old home or make changes to the new home with an interest-free Knock Home Swap loan.
“We could make changes ahead of time and do all the painting and change the floors – change whatever we wanted to change before we moved,” Sutton said.
Once the family has moved into the new home, the old home is listed and sold at maximum price using computer data.
“We use a lot of technology and data science to figure out how much their home is worth, how long it will take to sell it, and what it needs to bring it to market to be at its best,” said Black. “There are much better ways to buy a home now than when our parents did. “
People qualify for the home exchange program just like they would any other lender. Consumers need a certified Knock real estate agent to walk them through the process, but any real estate agent can get this certification at no cost to them.
Knock began before the pandemic, but has since reached 40 markets across the country as housing demand continues to soar. Sutton was among the very first in North Texas to use the program in August 2020.
They plan to expand to 100 markets over the next year and a half.
“We started five years ago and in general people are frustrated with the experience of having to close two houses at the same time,” Black said. “Most people have to sell their existing home before they can buy a new one. And in a market like this post-COVID, that’s pretty impossible.”
How long will this last?
Real estate experts say the frenzy of the market has caused a shift in the way people like the Suttons buy and sell homes now.
“The pandemic has just changed the world,” said Mark Johnson, CEO of Texas JPAR Brokerage. “I think we’re going to have inventory constraints over the next three years. It’s all coming from economists I’ve spoken to from the National Association of Realtors to the California Association of Realtors and everywhere in between.
In order to compete to close a home, Johnson said some buyers pay hard cash, sometimes above asking price. Others have resorted to letter writing or even free leases to give the seller time.
But there is some promising news. Johnson said in May that the DFW market saw a slight increase in the number of resale homes for sale.
“Resale is where we’ve seen a huge drop in inventory and we’ve seen back to back, just a small increase over the last couple of weeks. I think this could be the market starting to balance.” He said, “The prices keep going up and that’s going to put pressure on people. Sooner or later the consumer will just block.”
He said that if demand were to decline slightly, it could improve inventories in a modest way.
“I think we’re starting to see a continued increase in inventory over the next few months, which would be a good thing in this market,” he said.
While Black doesn’t have a crystal ball, he expects home buying to slow down a bit after the summer. Your best bet for buying a home more easily might be while on vacation.
“I think the summer is going to be scorching, with vaccines and people blowing up out of their homes and trying to move before school starts,” he said. “I always tell people every year, if you can afford to look for homes, on Thanksgiving or Christmas, you’re probably one of the few.”