If you have been looking for a home for the past few months, you may have noticed a shift in the market. Compared to just a few months ago, homes are staying on the market longer and there are more listings available. This is good news for buyers — especially those who have previously been shut out of homeownership by bidding wars.
So how can first-time buyers take advantage of the current real estate market trends?
First: When submitting a bid, do not feel pressured to do so at the asking price. During the pandemic, it became the norm for buyers to submit offers that came in at (or well over) asking price to be competitive in the real estate market. But with homes remaining on the market for longer periods of time, buyers now have an opportunity to negotiate a lower offer. Be sure to discuss strategies of making a lower offer with your Realtor to ensure the best case scenario.
There is also no need to waive contingencies. For the past couple of years, some buyers have waived contingencies in an effort to make their bids seem more compelling. Unfortunately, they did this at their own risk. Today’s buyers can be more cautious and add contingencies to protect themselves financially.
Just like contingencies, inspections were frequently waved during the pandemic. This means many buyers purchased homes without understanding whether there were any issues with them. Waiving a home inspection also diminishes your bargaining power. If an inspection shows that the roof needs to be replaced, for example, a buyer can negotiate the selling price, even after the bid has been accepted. Without a home inspection, a buyer could end up purchasing a home they need to spend thousands of dollars on to fix.
With fewer offers and more housing inventory, sellers are now more willing to assist with closing costs to help sell their homes. Of course, not all sellers are doing this. According to Realtor.com, about one third of sellers are helping cover buyer’s closing costs. Ask your Realtor whether it is worth your while to ask.
If you are looking to purchase new construction, builders may be more amenable to offering incentives. New construction prices have skyrocketed, and now with high mortgage interest rates, sales have slowed. Use this to your advantage and score a prime lot or luxury features for less.If you are looking to buy right now and need help navigating the waters, contact me. I can help you find the right home and create a bid that works in your favor.