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.
The Return of Contingencies
Over the last two years, more buyers were willing to skip important steps in the home buying process, like the appraisal or the inspection, in hopes of gaining 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 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.
Sellers Are More Willing to Help With Closing Costs
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 years.
Today, data suggests this is making a comeback. A REALTOR 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 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.
Despite the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back to the table. To find out how the market is shifting in our area, let’s connect today.