The days of total seller domination are behind us. For the first time in over two years, buyers are regaining the ability to negotiate.
While the market still favors sellers, a new Realtor.com® survey found that 92% of sellers accepted buyer terms in the past year. This is a change from the ultra-competitive market during the pandemic when buyers opted to waive home inspections, rent back to sellers, and go high above the asking price just to make their offer stand out.
Of over 3,000 homeowners who responded to the nationwide survey, 20% sold their homes in the past 12 months. Within the pool of seller respondents:
- 34% sold between June – August 2022.
- 23% sold between February – May 2022.
- Remainder sold in the six months prior to February.
Seller responses show a return to normalcy in the market through negotiations, inspections, and repairs.
Negotiations Taking Place
By now, we know the market is cooling.
Sellers can no longer expect several all-cash, over-asking bids with no contingencies and no negotiations.
Homeowners are rethinking their listing prices as well as their terms, as price reductions have risen over the summer. In addition, people who sold below-asking price increased to 31% in the last month, compared to just 18% in February and March 2022.
Over the past year, 92% of all 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 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 close despite asking to
Shifts in Negotiations and Repairs
During the height of the competitive market, waiving home inspections seemed to be a key tactic in making an offer stand out. But according to the survey, 95% of buyers requested a home inspection in the past month.
These inspections aren’t just for informational purposes either. Here are some numbers from recent sales, compared to 6-12 months ago
- 67% of buyers requested repairs after home inspections, compared to 31% for homes that sold 6-12 months ago.
- The number of sellers who refused to pay for repairs dropped from 8% to zero.
In addition to following through with inspection negotiations, many homeowners opted to make some updates before listing.
- 95% of sellers in the last month made some updates prior to listing, compared to 71% 6-12 months ago.
- The average amount sellers spent on repairs before listing in the past month was $14,163.
Still a Strong Market for Sellers
Homes continue to sell quickly, and 92% of sellers who sold in the past month stated they were satisfied with the overall outcome of their home sale. This is a slight drop from 98% who sold 6-12 months ago.
Our survey shows that the overheated housing market of the past two years, which predominantly favored sellers, is beginning to regain a sense of normalcy, which is welcome news for home buyers….At the same time, even as we are seeing a shift toward a more buyer-friendly market, it’s worth noting that the majority of recent sellers are still satisfied with the outcome of their home sale.
More Negotiating on the Horizon
Have you brushed up on your negotiating skills?
As the market returns to a more balanced state, buyers and sellers expect you to negotiate more on their behalf. Make sure you are ready to get your client the best deal possible.