Buyers Are Regaining Some of Their Negotiation Power in Today’s Housing Market

<article class="post-456233 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-456233"><span class="entry-date">September 15, 2022</span><div class="entry-header center-block text-center"><h1 class="entry-title">Buyers Are Regaining Some of Their Negotiation Power in Today’s Housing Market</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Buyers+Are+Regaining+Some+of+Their+Negotiation+Power+in+Today%E2%80%99s+Housing+Market&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fbuyers-are-regaining-some-of-their-negotiation-power-in-todays-housing-market%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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<p>If you’re thinking about buying a home today, there’s welcome news. Even though it’s still a <a href="https://www.simplifyingthemarket.com/2022/08/04/why-its-still-a-sellers-market/?a=712984-fa409495d5d70154d03a25e81e9540e2">sellers’ market</a>, 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.<span id="more-47157"></span></p>
<p>Today, you should have less competition and more negotiating power as a buyer. That’s because the intensity of buyer demand and <a href="https://www.simplifyingthemarket.com/2022/08/31/buyers-you-may-face-less-competition-as-bidding-wars-ease/?a=712984-fa409495d5d70154d03a25e81e9540e2">bidding wars</a> 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.</p>
<h4><strong>1. The Return of Contingencies</strong></h4>
<p>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 <a href="https://www.simplifyingthemarket.com/2022/08/19/why-a-home-inspection-is-important-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2">inspection</a> and appraisal.</p>
<p>The <a href="https://cdn.nar.realtor/sites/default/files/documents/2022-07-realtors-confidence-index-08-18-2022.pdf">latest data</a> from the <em>National Association of Realtors</em> (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And a <a href="https://www.realtor.com/research/2022-summer-sellers-survey/">recent survey</a> from<em> realtor.com</em> confirms more sellers are accepting offers that include these conditions today. <strong>According to their August study:</strong></p>
<ul>
<li><strong>95% </strong>of sellers reported buyers requested a home inspection</li>
<li><strong>67% </strong>of sellers negotiated with buyers on repairs as a result of the inspection findings</li>
</ul>
<p>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.</p>
<h4><strong>2. Sellers Are More Willing To Help with Closing Costs</strong></h4>
<p>Generally, closing costs range between <a href="https://www.simplifyingthemarket.com/2022/03/15/dont-get-caught-off-guard-by-closing-costs/?a=712984-fa409495d5d70154d03a25e81e9540e2">2% and 5%</a> 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 years.</p>
<p>Today, as the market shifts and demand slows, data from <em>realtor.com </em>suggests this is making a comeback. A <a href="https://news.move.com/2022-08-30-Realtor-com-R-Survey-Bargaining-Power-is-Back-92-of-Recent-Sellers-Accepted-Buyer-Friendly-Terms">recent article</a> shows<strong> 32% of sellers paid some or all of their buyer’s closing costs</strong>. 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.</p>
<h3><strong>Bottom Line</strong></h3>
<p>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.</p>
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