If you’re thinking about buying a home today, there’s welcome news. 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, at least for the time being.
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 you weren’t comfortable making an offer with no contingencies in place or didn’t want to compete against multiple offers, now may be your chance. 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 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 their August study:
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. This is a big departure from what we have seen the past few years.
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 during the peak buyer frenzy over the past two years.
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. Remember, these negotiation tactics won’t work for every transaction but may be a great way to bridge a price gap to get the deal done. To find out how the market is shifting in your area, connect with Arrive Real Estate Group today.