Purchasing a home today may give you more negotiating power
There are many people thinking about buying a home, but with everything affecting the economy, some are wondering if it’s a smart decision to buy now or if it makes more sense to wait it out. If you’re in that position, remember that it’s important to consider not just what’s happening today but also what benefits you may gain in the long run.
You should be aware that the hyper-competitive market has cooled this year as buyer demand has slowed and housing supply has increased. Because of these two factors, you may face less competition from other buyers.Less competition means more opportunities.
Here are two trends that may be just what you need to get back into the market.
1. Contingencies have returned
Over the last two years, more buyers have been willing to forego critical steps in the homebuying process, such as appraisals and inspections, in order to gain an advantage in a bidding war. Things are different now.
This doesn't mean we're in a buyer's market, but it does mean you have a little more negotiating power with a seller. The days of thinking your offer might not be accepted unless you waive contingencies or offer a significant premium over the asking price might be coming to an end.
2. Sellers are more willing to assist 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 buyers' 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.
Despite the extremely competitive housing market of recent years, today's data suggests that negotiations are beginning to return to the table. Connect with your local real estate advisor today to learn more about how the market is changing in your area.