Friday, September 16, 2022 / by Laura Larson
As a buyer today, you ought to have less competition and more negotiation power. This is due to the fact that buyer demand and bidding battles are less intense this year. Therefore, if bidding wars were the main reason keeping you away from the market, the following two trends might be precisely what you need to get back into it.
1. The Reemergence of Contingencies
In order to win a bidding war, more buyers during the past two years have been prepared to forego crucial phases in the home-buying process, such as the appraisal or inspection. Now, fewer people are deciding to forego home inspection and appraisal.
According to the National Association of Realtors (NAR) most recent statistics, fewer purchasers are choosing to forego a home inspection and appraisal. More sellers are now accepting offers with these stipulations, according to a recent poll. Their research from August found that:
95% of sellers reported buyers requested a home inspection
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.
2. Sellers are more willing to cover closing costs
Closing costs typically represent 2% to 5% of the home's buying price. 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.
Today, according to statistics, this is resurfacing as the market changes and demand decreases. According to recent research, 32% of sellers covered all or part of the closing fees for their buyers. You might use this as a negotiating tactic 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.
Despite the past few years' intense competition in the home market, the most recent data suggests that covering at least part of covering the closing costs discussions are beginning to return to the table. If you intend to enter the home market, this is fantastic news. Contact Laura Larson right away to learn more about how the market is changing and how it can benefit you as a buyer.