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

Have you ever put your apartment search on hold because of the frequency and intensity of the bidding wars over the past two years? If so, the competitive market has cooled this year as buyer demand has weakened and housing supply has increased. You should be aware that these two factors combined may result in less competition from other buyers.

And less competition means more opportunities. Here are two trends that could be the news you need to get back into the market.

1. The Return of Contingencies

Over the past two years, more and more buyers have willingly skipped critical steps in the home buying process, such as appraisals and viewings, in hopes of gaining an edge in the bidding war. But now things are different.

The latest data from the National Association of Realtors (NAR) shows that the percentage of buyers who do not inspect or appraise their homes is declining. And a recent article on realtor.com points out that more and more sellers are open to the unexpected.

“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 buyer’s market right now, but it does mean that you have a little more power when it comes to negotiating with sellers. The days when you felt you had to pay significantly more than the asking price for your purchase may be coming to an end.

2. Sellers Are More Willing To Help with Closing Costs

Before the pandemic, a common bargaining tactic for sellers was to sweeten the deal by paying a portion of the buyer’s closing costs. During the last two years of wastage, it didn’t happen all that often.

Today, data show this is making a comeback. According to a realtor.com survey, he 32% of sellers pay some or all of a buyer’s closing costs. This could be the bargaining tool you see when buying a home. Keep in mind that graduation loan limits are set by the lender and may vary by state and loan type. Work closely with your credit advisor to understand how much the seller can contribute to your local closing costs.