BUYERS ARE REGAINING SOME OF THEIR NEGOTIATION POWER IN TODAY’S HOUSING MARKET
There is good news if you're considering buying a house right now. It's still a sellers' market, but it's less intense than it was the previous year. And the times when you believed that you might need to waive contingencies or significantly overpay the asking price in order for your offer to be evaluated may be coming to an end.
As a buyer today, you ought to have less competition and more negotiation power. This is due to the fact that buyer demand and bidding battles are less intense this year. Therefore, if bidding wars were the main reason keeping you away from the market, the following two trends might be precisely what you need to get back into it.
1. The Reemergence of Variables
In order to win a bidding war, more buyers during the past two years have been prepared to forego crucial phases in the home-buying process, such as the appraisal or inspection. Less people are now deciding to forego the examination and appraisal, nevertheless.
According to the National Association of Realtors' (NAR) most recent statistics, fewer purchasers are choosing to forego a home inspection and appraisal. More sellers are now accepting offers with these stipulations, according to a recent realtor.com poll. Their research from August found:
95 percent of sellers said that buyers wanted a house inspection.
Due to inspection results, 67% of sellers bargained with buyers on repairs.
This proves that purchasers are better equipped now to include these requirements in their bids and to engage in necessary negotiations based on the findings of the inspection.
2. More willing are sellers to cover closing costs
Closing costs typically represent 2% to 5% of the home's buying price. Prior to the pandemic, it was a standard negotiation strategy for sellers to pay for a portion of the buyer's closing fees in order to improve the terms of the purchase. During the two-year period's peak buyer's frenzy, this didn't occur as frequently.
Today, according to statistics from realtor.com, this is resurfacing as the market changes and demand decreases. According to a recent research, 32% of sellers covered all or part of the closing fees for their buyers. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.
Despite the past few years' intense competition in the home market, data from today suggests that discussions are beginning to return to the table. If you intend to enter the home market, this is fantastic news. To find out how the market is shifting in your area, connect with your local real estate advisor today.
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