Here's Why Buyers Have More Power Now Than They Think. (Part 2)
Sellers are concerned because homes are vacant.
Waivers for appraisals and inspections are no longer thought to be necessary in order to accept an offer.
In its place, addendums requiring a professional cleaning before closing, seller-paid closing expenses, or seller-paid warranties are starting to appear.
Lowballing due to a lack of competition
A home's price is directly influenced by the number of days it is on the market. Therefore the fact that the average days on the market have increased to 51 is excellent information for buyers' negotiating power.
If there are no offers after 30 days, many sellers become concerned and make cuts and compromises that ultimately help a buyer.
The buyer now has access to a long variety of benefits and techniques that weren't available to them a few months ago.
There is less competition from other businesses, which creates opportunities for the price reduction, anxious sellers who are amenable to negotiation, the ability to undercut the asking price, and more.
There are mortgage rate buydown options.
Housing costs have skyrocketed, but many housebuilders and sellers are offering mortgage rate buydown programs so buyers can get property immediately in order to tackle the affordability issue.
The 2-1 buydown and the 3-2-1 buydown are two of the most well-known buydown programs, in which the seller or home builder makes a down payment to lower the interest rate.
After that, during the subsequent years of repayment, that rate increases until it reaches the initial rate. For example, your seller can buy down your 7% rate to 4% at the start of the payment period. Then, after a year, that rate goes up to 5%, the following year 6%, and then 7%.
It's a smart method to buy a house at a start rate lower than where rates are now, both psychologically and economically, because many believe that rates will be lower in two years. Together, buyers and sellers can employ a seller credit approach to help a buyer receive a big rate reduction.