You May Have More Negotiation Power When You Buy a Home Today

Did you put off looking for a property for the past two years due to the frequency and ferocity of bidding wars? If so, you should be aware that this year’s very competitive property market has mellowed as buyer demand has softened and house supply has increased. You might have reduced competition from other buyers as a result of those two elements together.

More opportunities also arise when there is less competition. These two trends could give you the information you need to reenter the market.

1. The Return of Contingencies

In order to gain an advantage in a bidding war, more purchasers during the past two years have been prepared to forego crucial phases in the home-buying process, such as the appraisal or the inspection. But today, everything has changed.

According to the most recent National Association of Realtors (NAR) data, fewer buyers are forgoing a home inspection or appraisal. Additionally, more sellers are taking contingencies, according to a recent report from realtor.com:

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 does not imply that we are currently in a buyers’ market, but it does provide you a little more negotiating power with sellers. The days of thinking that you might need to forego contingencies or significantly overpay the asking price in order to have your offer accepted might be coming to an end.

2. Sellers Are More Willing To Help with Closing Costs

Prior to the pandemic, it was common for sellers to cover some of the buyer’s closing costs to sweeten the deal. This was less common during the peak buyer frenzy of the last two years.

Data suggests that this is making a comeback today. According to a realtor.com survey, 32% of sellers paid some or all of their buyer’s closing costs. This could be a negotiating tool when you go to buy a house. Keep in mind that closing cost credit limits are set by your lender and may vary by state and loan type. Work closely with your loan advisor to determine how much a seller in your area can contribute to closing costs.

Bottom Line

Despite the extremely competitive housing market of recent years, today’s data suggests that negotiations are beginning to return to the table. Let’s talk about how the market is changing in our area today.

If you are a Veteran, currently serving, or the surviving spouse of a Veteran, you may qualify for the VA Home Loan program, the best loan program available to anyone. Thank you for your service!