More Room for Negotiations for Buyers

As of this writing, the days of the crazy hot seller’s market are behind us. For the first time in two years, we are now seeing buyers regain the ability to negotiate. While the market still does favor sellers, a Realtor.com® survey actually found that 92% of sellers accepted buyer terms in the past year. This is a breath of fresh air compared to the ultra-competitive market during the pandemic when buyers were opting to waive home inspections, offering free rent backs, and going way above the asking price just to make their offer stand out.

 NEGOTIATIONS ARE NOW MORE COMMON 

By now, we already know the market is cooling off. Sellers can no longer expect over-asking bids, all-cash offers and having all contingencies waived. Homeowners are also starting to rethink their listing prices and terms as price reductions have risen over the summer. People who sold below-asking prices increased to 31% in the last month, compared to just 18% in February and March 2022.

 Due to the market slowdown, 92% of recent sellers accepted some buyer-friendly terms and contingencies. These included:

 – 41% accepted some contingencies in the contract (appraisal, home inspection, home sale, financing, etc.)

– 32% dropped the price because the home didn’t meet the appraisal

– 32% paid for some or all of the buyer’s closing costs

– 30% had to be flexible on the ideal timeline for closing

– 29% paid for repairs to the home after the appraisal

– 28% were not able to rent the home back after closing despite asking to

(Source: Realtor.com)

 CHANGING TRENDS IN NEGOTIATIONS AND REPAIRS

Over the last two years, waiving home inspections was a key tactic to make an offer stand out. But according to the survey:

– 95% of buyers requested a home inspection in the past month.

– 67% of buyers requested repairs after home inspections, compared to 31% for homes that sold 6-12 months ago. 

– 95% of sellers in the last month made some updates prior to listing, compared to 71% 6-12 months ago. 

(Source: Realtor.com)

 A MORE BUYER-FRIENDLY MARKET

The housing market may be regaining a sense of normalcy however, it’s good to note that we are still in a seller’s market. 

Even though inventory has been growing this year, there’s still a big shortage of homes.

Remember that inventory levels of homes for sale help determine if buyers or sellers are in the driver’s seat. For a market to be considered balanced, it should have at least 5-7 months of inventory. Right now, the average months supply for Denver and the Foothills are averaging only 1-2 months. 

Share this information with somebody you know if you found this helpful. Reach out anytime if you have any questions about this market, 720-899-6394.