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Everything’s always been bigger in Texas, but one thing has been getting even bigger: The price of Houston homes. Between September 2021 and 2022, median sales prices here increased by nearly 15 percent, according to the Houston Association of Realtors (HAR).
That’s a great signal for anyone who owns property here, but selling a house in Houston is no longer a Rockets-style slam dunk. Home sales have been dropping all around the country as buyers struggle to afford higher mortgage rates.
If you’re thinking about listing your home in Houston, make sure you read this guide to understand how long it will take, how much it will cost and what you can do to prepare for the smoothest possible sale.
Sell a house fast in Houston
If you’re aiming to sell your house fast in Houston, the market isn’t looking quite as good as it was during the peak of the pandemic. While homes typically spent 29 days on the market in September of 2021, that figure jumped to 37 days in September of 2022. While it is still a seller’s market here, buyers are enjoying an increase in inventory, and at the same time, some are pressing pause on their searches due to higher borrowing costs.
You have plenty of options, though, if you need to find a fast route to closing. iBuyers, online firms that specialize in making immediate offers and closing in just a couple of weeks, love Texas in general and Houston in particular. It’s been one of the top 10 markets for iBuyers, representing 5 percent of sales from 2017-2021, according to CoreLogic, which analyzes property and real estate data. According to the Zillow “Q1 2022 iBuyer Report,” Houston ranked fourth for the highest number of iBuyer transactions among major metro areas in the first quarter of 2022.
Additionally, there are plenty of local companies that buy houses for cash, so you can explore offers from real estate investment firms. Keep in mind that these companies are looking for a profit – not a permanent home – so you’re likely to earn less than selling to a family who wants to actually move in.
Things to consider when selling your Houston home
Before you start looking for the right buyer, you’ll need to ponder some important questions.
What kind of shape is your home in?
Selling a house is like selling a car; you need to be honest with yourself about whether it’s in poor, fair or excellent condition — which will affect how much you can get for it. Does your house need a ton of attention to fix plumbing issues, electrical wiring and other problems? Perhaps you should list it as-is: The price will be lower, but you won’t have to haggle over repairs with prospective buyers. Or is your property just in need of some minor updates to boost its value? If so, you can probably demand top dollar.
How quickly do you need to sell?
If time isn’t on your side, the shift in the housing market in Houston is not great news. As homes take longer to go to contract, it’s important to recognize that you could be waiting for your money for a while. If you’re trying to sell your house while buying another, that can present some big challenges. Go into the process with a realistic timeline. Do you absolutely have to close by a certain date because you’re relocating? Or can you afford to move into a short-term rental to find the right buyer?
How much will selling cost?
Home-selling is full of hidden costs, and we don’t just mean getting your house in show-ready shape (see “Preparing your home for sale” below). Plenty of fees, taxes and commissions accompany the transaction, whether you’re selling a house in Texas or anyplace else.
Keep these potential costs in mind, as they’ll affect your net proceeds from any sale:
- Agent commissions: This represents the biggest chunk of cash that eats into your profit potential. You’ll be responsible for paying on your agent’s fee and the buyer’s agent’s fee, which collectively run on average 5 to 6 percent of the home’s final purchase price.
- Title insurance: In Texas, sellers usually cover the cost of a title insurance policy for the owner. Rates will vary, but you can expect this to set you back at least $2,000 based on median home prices in Houston.
- Unpaid property taxes: If you have an outstanding bill for property taxes, you’ll need to hand over these funds before you can transfer ownership of the property.
- Attorney fees: While you don’t have to hire a real estate attorney in Texas, you should. You’ll pay their fee at closing, depending on how much time they spent on your transaction.
- Concessions: If the buyer’s home inspection identifies any red flags, be ready to deal with a request to cover either the repairs or part of the buyer’s closing costs in compensation.
One expense you won’t have to worry about is real estate transfer taxes. These don’t exist in the Lone Star State.
What’s the market like in your specific area?
While median prices can be helpful in understanding the pulse of buying activity, it’s important to remember that Houston is huge: In fact, the metro area is bigger than the entire state of New Jersey.
The Houston Association of Realtors offers neighborhood-level data that can help you understand how sales look in different parts of town. For example, while the average price in Spring Branch was more than $534,000 in September, prices in the East End hovered around $385,000.
So be sure to look at comps in your neighborhood before you think about listing your home. What buyers paid for a home at the end of the block is much more important than what they paid for a home 10 miles from your front door.
Preparing your home for sale in Houston
The adage “it takes money to make money” rings especially true in real estate. You’re going to have to spend some cash in order to make cash from your sale.
Your house needs to wow buyers as soon as they walk in the door. Real estate is all about first impressions, and one of the most popular ways to deliver that must-buy appearance is to hire a professional home staging service. The cost of staging your home varies. If you simply need a professional to declutter and organize your space, the bill will be fairly 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 ready to shell out some bigger bucks.
It’s not just about what the untrained eye can see, though. Since most buyers will hire a home inspector, you might want to conduct a pre-listing inspection to proactively spot any issues that may come up after you go to contract.
You’ll also need to fill out the Texas seller’s disclosure notice with all your knowledge about any defects in the home, ranging from flood damage to problems with the roof.
Selling your house with or without a real estate agent
You might be considering whether you can sell your house on your own to avoid a real estate agent’s commissions. If you go the for sale by owner (FSBO) route, be warned: You’re going to have a lot of work on your plate. Selling a home is getting more challenging in the current confusing market, too. You’ll need to craft a compelling listing, advertise it online, schedule open houses and negotiate with a buyer’s agent. And even if you don’t hire an agent, you’ll still be the one to pay the buyer’s agent’s fee (it comes out of the purchase price).
Does all that work sound a bit daunting? It’s time to find a local real estate agent. Don’t be afraid to try to negotiate a lower commission, either. If your home will go for a high price, you’ll likely have a decent chance of finding an agent willing to slice a small amount – 0.5 percent, perhaps — from their fee.
Pricing your home to sell
After listing your home, the last thing you want to do is let it sit for too long. A home that doesn’t have any buying activity tends to be a candidate for a price drop – an unfortunate move that 34 percent of sellers in Houston had to make in August, according to data from Redfin.
In addition to taking steps to find out what your house is worth and looking at comps in the area, ask your agent for what they feel is the pricing sweet spot for your residence. You don’t want to leave money on the table and price it too low, but you do want to inspire prospective buyers to hop in the car and come see the place for themselves.
Getting to closing day
Once you accept an offer and sign the purchase and sale agreement, you’ll still have some additional work to do. First, make sure you’re answering emails, texts and phone calls from your attorney and your agent as quickly as possible to respond to contract revisions and concession requests in a timely manner.
Next, you need to get the place ready for a new owner. Schedule movers, and use it as an opportunity to purge the stuff you don’t feel like hauling somewhere else. The buyer will likely want to take a final walk-through shortly before or on the day of the closing, so make sure the home is in broom-clean condition by then.
Be sure to review the closing statement — a list of all the closing costs and expenses — that you’ll receive about three days prior to the closing. You can attend the closing yourself, or you can hand over power of attorney to let your lawyer take care of all the final details of transferring funds to pay off your existing mortgage and covering all your closing costs.
Now, the purchase agreement is signed, the keys are handed over and deal is done. Congratulations, and enjoy your next chapter – whether it unfolds in a home in another Houston ‘hood or somewhere else in the world.