If you’re thinking about buying a home today, there’s
welcome 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 should have less competition and more negotiating
power as a buyer. That’s because the intensity of buyer demand and bidding wars
is easing this year. 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
re-enter the market.
1. The Return of Contingencies
Over the last two years, more buyers were 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
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 from realtor.com confirms more
sellers are accepting offers that include these conditions today. According to
their August study:
95% of sellers reported buyers requested a home
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 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
Today, as the market shifts and demand slows, data from
realtor.com 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.
Regardless of the extremely competitive housing market of
the past several years, today’s data suggests negotiations are starting to come
back on 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, let’s connect.