DALLAS, Texas — On Friday, D-FW realtor Todd Tramonte closed a deal on a North Texas home for one of his clients. And frankly, he couldn't believe what he had to do to get the job done.
Speaking with WFAA about the red hot real estate market in D-FW, Tramonte said that he and his team offered exactly $100,000 more on a home with an asking price of $325,000.
For any realtor, that's fairly eye-opening for a home with that asking price.
"It's 10 out of 10 shocking," Tramonte said. "In the last 12 months, we've seen home values go up in some areas more than 50%. That's 10 to 15 times more than normal."
"This is the most extreme and unrecognizable seller's market that we've ever seen in D-FW."
Sadly, Tramonte is right, and you won't believe what you're about to read.
He and his agency are getting creative to sweeten bids on homes for sale by offering sellers a fully paid vacation cruise.
"We're offering them a 5-day, 4-night cruise for two adults prepaid to help us get our offers accepted," said Tramonte.
"So we're offering a cruise on top of a super-aggressive offer...that's the world we're living in."
That's. Wild. But it makes sense considering how competitive things are getting on the front lines of the market.
Most recently, this story about a buyer forking more than $300,000 over the asking price of a $1 million home in Southlake has been a top story on WFAA's website.
If you're a realtor, it's not a great time to be one.
"Buyers are competing with 10 to 50 offers sometimes," Tramonte said. "And there's not one legitimate or reliable piece of data that says it's going to stop anytime soon."
Joe Atkins, the owner of Joe Atkins Realty, told WFAA this week that appraisals are often not keeping up with price surges. If the appraisal comes in lower than the agreed-upon price, the buyer must come up with the extra money -- or lose the deal.
And just the threat of that complication is leading some sellers to go the easier route and select buyers who can pay immediately in all-cash purchases.
Even if you’re already pre-approved for financing, buyer beware: You’ll probably have stiff competition from those cash buyers.
So why is this happening?
Well, there are lots of people moving to Texas right now. No state taxes and a business-friendly approach to the pandemic are both attractive angles.
The Texas A&M Texas Real Estate Research Center notes that median prices for homes in Dallas-Fort Worth have been setting new records this year and then breaking them, going from $310,500 in February to $321,500 in March.
But there's also a housing shortage, and materials to build are also going up in price.
Here's the good news: Tramonte said that buying right now is also positive because housing values go up almost the minute after you close a deal.
"By the time you move in, your home is going to be worth around 5% more," Tramonte said. "Some people are using that rationale to make these unbelievably aggressive offers."
Tramonte also said that more and more people are investing in real estate rather than investing in the stock market.
"People have done that historically in California and Florida, and that's also now happening in Texas," said Tramonte.
Like it or not, it's a reality for the market... one many buyers simply can't compete with.