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

Posted by Jay Singh on Monday, September 26, 2022 at 10:21 AM By Jay Singh / September 26, 2022 Comment

According to a recent report from the National Association of Realtors, the number of buyers who are willing to waive contingencies has decreased, while the number of buyers who are willing to pay over asking price has also decreased. This is welcome news for anyone who has been waiting to buy a home.In a sellers’ market, it can be difficult to get your offer accepted if you include contingencies or if you are not willing to pay over asking price. However, with the intensity of buyer demand easing this year, you may have more negotiating power as a buyer. This means that you may be able to get your offer accepted without waiving contingencies or paying over asking price.

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

According to recent data from the National Association of Realtors (NAR), the percentage of buyers waiving their home inspection and appraisal is declining. A survey from realtor.com confirms that more sellers are accepting offers that include these conditions today. The August study found that 95% of sellers reported buyers requested a home inspection and 67% of sellers negotiated with buyers on repairs as a result of the inspection findings. This goes to show that buyers are more able to include these conditions in their offers today and negotiate as needed based on the findings. As the housing market continues to recover, it's likely that we'll see even fewer buyers willing to waive these important steps in the homebuying process. At Jay Singh Realty we assist our buyer's in negotiating and understanding all the contingencies along with negotiating home repairs afer the home inspection.

2. Sellers Are More Willing To Help with Closing Costs

When you're buying a home, you're not just paying the purchase price – there are also a number of other costs that are rolled into what's called the closing costs. These can include things like the loan origination fee, the appraisal fee, the Title search fee, and so on. In total, these closing costs can add up to anywhere from 2% to 5% of the purchase price of the home.

In a competitive market, sellers are sometimes willing to cover some of the buyer's closing costs to sweeten the deal. However, this has been less common in recent years, as demand for homes has been high and buyers have been willing to pay whatever it takes to get their dream home.

Now that the market is shifting and demand is slowing down, we're seeing a return to seller-paid closing costs. According to data from realtor.com, 32% of sellers are now paying some or all of their buyer's closing costs. So if you're looking to purchase a home in the near future, this may be a negotiation tactic you can use. Just keep in mind that there are limits on how much a seller can contribute to closing costs, and these vary by state and loan type. Your best bet is to work closely with your loan advisor to understand the rules in your area.

Bottom Line

Regardless of the extremely competitive housing market of the past several years, today’s data suggests negotiations for home buyers 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. Jay Singh's knowledge and expertise of local Dallas/Fort Worth housing market can help you navigate these changes and find the perfect home for your family. Contact Jay Singh Realty today to get started!