2015 Dallas housing market is tough for sellers too

The hot Dallas housing market is certainly a challenge for home buyers right now. But sellers are facing a few challenges as well.

The Dallas Morning News reports that demand and prices for homes are continuing to soar. Plenty of homes are receiving multiple offers the day they hit the market. Great news for sellers.

But also reason for a seller to be cautious about which offer they accept. The highest price is not always the best deal. The terms of the contract are crucial. And just how ready, willing and able is your potential buyer?

Standard Texas real estate contracts contain a negotiable option period that usually ranges from 5-15 days. During that time, a potential buyer may have the home inspected, perform their due diligence, ... and may opt out of the contract for any reason or for no reason.

In years past, a buyer typically didn't opt out of a contract unless there were issues that came up during the inspection that were unacceptable and not negotiable. Most properties that went under contract, ended up with a sale.

That's not necessarily the case in today's hot market. Agents are seeing more and more contracts being terminated by anxious buyers who are competing for Dallas homes. In order to win a contract on a property, they need to make a strong, quick offer.

But too many of them are putting a home under contract (and taking it off the active market) and THEN taking a step back to decide if they want it. When they opt to walk away and terminate the contract, the property then goes back on the market but has missed out on some potential buyers and lost the momentum of becoming a 'new' listing.

To reduce this risk, many agents (myself included) are encouraging their sellers to reduce the option period and increase the option fee. If a potential buyer puts up a non-refundable option fee of $1,000 instead of $200, they're less likely to walk away from a transaction. We are tightening up (or eliminating) the financing contingencies and other opportunities for a buyer to withdraw.

I hope this becomes the norm for Texas real estate transactions. In some states a buyer may terminate a contract only because of needed repairs, financing issues or some other legitimate reason. Right now, a Texas contract doesn't call for the buyer to beware but for the seller to beware.

Check out the news story about the Dallas July 2015 market here:
http://www.dallasnews.com/business/residential-real-estate/20150723-scorching-dallas-area-home-prices-mean-tough-summer-market-for-buyers.ece
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