Negotiate to Win as a Homebuyer!

Headlines are swirling around real estate about how difficult the market is for homebuyers due to the increased interest rates and home prices. Both increased dramatically in the 2-3 years during the pandemic. First with prices rising due to a home supply shortage and then with soaring interest rates designed by the Federal Reserve to cool off inflation.? Stories of a changed market have merit, so how can a homebuyer win today and overcome home prices and interest rates.

While home prices and interest rates have risen, it is also true that homebuyers today are in a better position to choose the home they want, and they can also drive the negotiation during a home purchase. ?There is a much greater inventory of homes for buyers to see, which presents a fantastic opportunity to shop around to find the home that is in the right spot and has more of the important features that a buyer wants. Homes are also staying on the market longer, which is changing the stance of sellers who are now ready to negotiate on price and other terms.

According to CNBC, 72% of homebuyers from the housing boom in 2020-2022, even though they received an extremely low interest rate on the loan, “have regrets about their home purchase”. In retrospect, homebuyers from this period felt like they were rushed to decide, did not get many of the features or location they wanted in a home, and often felt like they overpaid for the house. Negotiating with sellers was limited and homebuyers, often simply agreed to whatever was on offer.

Negotiations are a critical piece of today’s real estate market, so as a home buyer, being represented by a professional Realtor will make a difference in what you pay for the house, the types of concessions you receive from the seller, the number of repairs completed by the seller, and even the interest rate you end up paying on the loan.

Purchase price, closing costs, repairs, and interest rate buydowns that were not necessarily on the table during the housing boom, could be concessions offered by sellers if they are asked to provide them. ?Of course, in Nashville, each neighborhood is different and things can change dramatically from one to the next. Homes that are well priced, and in a desirable location, can still attract multiple buyers and not have the need to offer a slew of concessions. Make sure to understand the location, market conditions, and what comparable properties are on the market or under contract, and which ones have sold in the last several months.

By following certain negotiation strategies, understanding current market conditions, and knowing situationally what concessions are available, homebuyers can gain leverage in a negotiation, and put themselves in a better position to purchase a home.