The housing market is beginning to slow, restoring an equilibrium between buyer and seller.
Whether you’re looking to move homes or add another property to your portfolio, it’s important to know your negotiating power in today’s market. This negotiation gives you greater control over both price and contract terms.
Consider these three ways you can make the most of a seller’s market.
1. The Contingency Comeback
During the scramble of the past two years, buyers did anything they could to win bidding wars. In some cases, buyers skipped important homebuying steps such as inspections and appraisals.
This trend is shifting back to pre-pandemic norms. According to recent data from the National Association of Realtors, 95% of buyers requested a home inspection. And 67% of buyers negotiated with sellers based on the inspection reports.
Firstly, inspections are important because they prevent you from purchasing a property with severe issues like subsidence or ancient plumbing.
But inspection findings also serve as a valuable negotiating tool, allowing you (the buyer) to bring down the total cost to reflect needed repairs or updates.
2. Closing Costs
Closing costs can account for 2%-5% of the total purchase price. When you’re looking at luxury real estate, this percentage is not an insignificant sum of money.
Prior to the pandemic, sellers would often entice buyers by covering part of these closing costs. The buying frenzy of the past few years put a damper on this practice.
But it’s coming back into use. In fact, a recent survey revealed that 32% of sellers paid for some or all of the buyer’s closing cost.
Let’s face it. Even though the market is cooling down, it’s still a seller’s market. But here is a chance for you to flex your purchasing power.
You can either use this returning trend to shave off a chunk of change from your next purchase. Or you can outprice other buyers by covering the costs yourself.
3. Cash Remains King
Mortgage rates climbed during the first half of 2022. But most people still need a loan to buy a new house.
Let’s take a look at the Realtors® Confidence Index Survey. July 2022 saw the percentage of cash sales stay steady at 24% – down one percent from June 2022 and up one percent from July 2021.
So if you’re in a position to purchase outright, you’ll outpace 75% of other buyers. It’s an easy way to instill confidence in your seller – letting them know you’re serious about the deal and you have the means to close it.
An Offer They Can’t Refuse
The easiest way to harness your powers of negotiation is to work with a trusted real estate agent.
If you’re moving to a new area, a real estate agent will provide crucial insight to local buying and selling trends. This advantage is especially important when you’re shopping for Big Island property while located on the mainland.
Contact me to start shopping. I’ll help you find your dream property and create a strategy to secure the best deal possible.
Aloha, and welcome to Hawaii.