You May Have More Negotiation Power
When You Buy A Home Today
Did the frequency and intensity of bidding wars over the past two years make you put your
home search on hold? If so, you should know the hyper competitive market has cooled this
year as buyer demand has moderated and housing supply has grown. Those two factors
combined mean you may see less competition from other buyers.
And with less competition comes more opportunity. Here are two trends that may be the news
you need to reenter the market.
1. The Return of Contingencies
Over the last two years, more buyers were willing to skip important steps in the homebuying
process, like the appraisal or the inspection, in hopes of gaining an advantage in a bidding
war. But now, things are different.
The latest data from the National Association of Realtors (NAR) shows the percentage of buyers
waiving their home inspection or appraisal is down. And a recent article from realtor.com
points out more sellers are accepting contingencies:
“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars,
waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and
92% of home sellers are accepting some buyer-friendly terms (frequently related to home
inspections, financing, or appraisals), . . .”
This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more
leverage when it comes time to negotiate with a seller. The days of feeling like you may need
to waive contingencies or pay drastically over asking price to get your offer considered may be
coming to a close.
2. Sellers Are More Willing To Help with Closing Costs
Before the pandemic, it was a common negotiation tactic for sellers to cover some of the
buyer’s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer
frenzy over the past two years.
Today, data suggests this is making a comeback. A realtor.com survey shows 32% of sellers
paid some or all of their buyer’s closing costs. 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.
Bottom Line
Despite the extremely competitive housing market of the past several years, today’s data
suggests negotiations are starting to come back to the table. To find out how the market is
shifting in our area, let’s connect today. Call Afrouz at 847-791-1264