If you need assistance, please call 703-743-4410

Homebuyers Have More Negotiating Power in Today's Market

Friday, December 16, 2022   /   by Laura Larson

Homebuyers Have More Negotiating Power in Today's Market

b3.jpg
Did you put off your search for a home over the past two years due to the frequency, intensity, 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 slightly. You might observe a reduction in 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 re-enter the market.
1. The Re-emergence 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 aspects of the home-buying process, such as inspections and appraisals. But just a few months after the peak of the seller's market, everything changed. According to the most recent National Association of Realtors (NAR) data, fewer buyers are forgoing a home inspection or appraisal. More sellers are also accepting conditions, with so much as 92% of home sellers amenable to buyer-friendly terms such as inspections, financing, or appraisals. 
This does not mean that we are currently in a buyers' market, but it does provide homebuyers with a little more negotiating power. 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 a standard negotiation strategy for sellers to pay for a portion of the buyer's closing fees in order to improve the terms of the purchase. During the two-year period's peak buyer frenzy, this didn't occur as frequently.

According to current data, the seller's closing costs subsidy may be making a comeback. According to a poll, 32% of sellers covered all or part of the closing costs for their buyers. You might use this as a negotiating strategy while buying a house. Just keep in mind that your lender may have restrictions on closing cost credits, which might differ by state and loan type. To learn how much a seller can contribute to closing costs in your location, consult with your loan advisor.
Bottom Line
Despite the past few years' intense competition, current data suggests that negotiations are beginning to resume. Get in touch with Laura Larson right now to learn more about how the market is changing in your region.