If you’re thinking about buying a home today, there’s welcoming news. Even though it’s still a sellers’ market, it’s a more moderate sellers’ market than last year. And 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. Today, you’re likely to have less competition and more negotiating power as a buyer. That’s because the intensity of buyer demand and bidding wars is somewhat easing. So, if bidding wars were the biggest factor that had you sitting on the sidelines, here are two trends that may be just what you need to enter the market.
- The Return of Contingencies Over the last two years, more buyers wre willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But now, fewer people are waiving the inspection and appraisal. The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And a recent survey confirms more sellers are accepting offers that include these conditions today. According to the August study: 95% of sellers reported buyers requested a home inspection and 67% of sellers negotiated with buyers on repairs as a result of the inspection findings. This goes to show buyers are more able to include these conditions in their offers today and negotiate as needed based on the outcome of the inspection.
- Sellers Are More Willing To Help with Closing Costs Generally, closing costs range between 2% and 5% of the purchase price for the home. 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, as the market shifts and demand slows, data suggests this is making a comeback. A recent article 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: Regardless of the extremely competitive housing market of the past several years, today’s data suggest negotiations are starting to come back to the table. This is good news if you’re planning to enter the housing market. To find out how the market is shifting in our area, contact an agent at Falvey Real Estate Group @ 518.452.3912