Did the frequency and intensity of bidding wars over the past two years make you put your home search on hold? If so, you should know the hyper-competitive market has cooled this year as buyer demand has moderated and housing supply has grown. Those two factors combined mean you may see less competition from other buyers.
And with less competition comes more opportunity. Here are two trends that may be the news you need to reenter the market.
1. The Return of Contingencies
Over the last two years, more buyers were willing to skip essential steps in the homebuying process, like the appraisal or the inspection, to gain an advantage in a bidding war. But now, things are different.
The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection or appraisal is down. And a recent article from realtor.com points out more sellers are accepting contingencies:
“A year ago, sellers were calling all the shots and buyers were launching legendary bidding wars, waiving contingencies, and paying for homes in cash. But now, the shoe is on the other foot, and 92% of home sellers are accepting some buyer-friendly terms (frequently related to home inspections, financing, or appraisals). . .”
This doesn’t mean we’re in a buyers’ market now, but it does mean you have a bit more leverage when it comes time to negotiate with a seller. The days of feeling like you may need to waive contingencies or pay drastically over the asking price to get your offer considered may be coming to a close.
2. Sellers Are More Willing To Help with Closing Costs
Before the pandemic, sellers used a common negotiation tactic 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, data suggests this is making a comeback. A realtor.com survey 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 purchase a home. Just keep in mind that limits on closing cost credits are set by your lender and can vary by state and loan type.
Despite the highly competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. If you work with us and our friends at Richmond County Mortgage, we can help you navigate these negotiations.