Austin real estate agents warn sellers to be wary of predatory offers

Realtors give tips on navigating Austin market

More than half of all homes have declined in value in the past year, a study found. Here are some expert tips on how to navigate the current market.

AUSTIN, Texas - Nationwide, more than half of all homes have declined in value over the past year per recent data from Zillow. But here in Austin, that's the case for almost 89% of homes. 

With properties sitting on the market longer, local realtors are warning sellers to be wary of predatory offers. 

What they're saying:

"When homes are not selling as quickly and inventory is sitting on the market, people become a bit more desperate to sell their homes, so they are willing to look at offers that they normally would not look at," said Tanya Kerr, a local real estate agent and the founder of T. Kerr Property Group. 

Kerr says red flags that sellers should be on the lookout for include:

• A contract that waives the seller's rights to be represented by a licensed real estate agent or attorney. 
• Subject to offers that shift ownership to a buyer who promises to take over existing mortgage payments while that mortgage is kept in the seller's name. 
• Contracts that allow buyers to advertise a property as for sale before they own it, or contracts that the buyer is allowed to resell or reassign. 
• Unusually long or extendable option periods that leave the seller in limbo and prevent them from receiving other offers. 
• One-sided contract termination or closing date extension rights, and any offer that would give the buyer the ability to record the agreement, cloud the title, or make them attorney in fact. 

In today's market, Kerr says sellers are increasingly receiving offers with a number of these risky terms. 

"This offer (it) said that they would be attorneys, in fact, and have those privileges, which means they could act on behalf of this seller, and they could put a cloud on title for as long as they wanted to, which means they could not sell the property to somebody else," said Kerr, describing one such offer. "In our opinion, it was an extremely predatory situation that this seller got into without ever knowing it."

Bottom line: Kerr says if an offer seems too good to be true it probably is, and she stresses the importance of always reading and understanding the fine print or having a trusted representative look it over. 

And she says there are still ways for sellers to win, even in a buyer's market — emphasizing the importance of making sure properties look great, are move-in ready, and are properly advertised when they hit the market. 

Realtors with T. Kerr Property Group also stress the importance of analyzing current market data in order to price homes to sell. 

"It all comes down to pricing and really being in tune with what the data is showing," said Micaela Remmert, a local real estate agent with T. Kerr Property Group. "So, really honing in on what the current market value is where we're seeing success."

Mortgage rates in Texas are slightly lower than a couple of years ago, currently hovering around 6 - 7%, though still significantly higher than pandemic-era rates. And realtors say to bring more buyers to the table and alleviate some of that pressure for sellers, those rates will need to fall into the 5% range.