Mortgage rates are high, but buyers can still secure favorable terms. See our top 3 tips below.
Excerpt via WSJ
In the current real estate landscape, prospective home buyers grapple with formidable challenges, including soaring mortgage rates and a constrained housing supply, resulting in escalated costs and limited options. However, this challenging market presents an unexpected silver lining—home buyers possess more negotiating power than they might initially perceive. Despite the intimidating financial landscape, lenders are compelled to vie for prospective buyers, exploring avenues to mitigate costs by potentially reducing associated fees. Beyond the pursuit of optimal mortgage rates, buyers have newfound opportunities to engage in negotiation dialogues with sellers, seeking relief from burdensome closing costs and monthly financial commitments. Remarkably, sellers are displaying increased openness to fulfilling buyer requests, driven by the desire to secure transactions amidst heightened competition within the housing market.
Specific Negotiation Aspects:
Help with Closing Costs
Buyers can request a credit from the seller to offset closing costs, aiding those with financial constraints.
Rate Buy-Down on Mortgage:
More lenders, sellers, and home builders offer rate buy-down options to lower a buyer’s mortgage interest rate for a specified duration.
This involves purchasing mortgage discount points at closing, which can substantially reduce the interest rate and monthly payments.
Home Repairs and Improvements:
Sellers are more amenable to making necessary repairs or improvements to the property, a change from conditions in the recent past.
Buyers can politely negotiate with sellers for repairs or improvements, potentially leading to a reduced sale price or better overall deal.
Key Considerations for Buyers:
- Buyer Negotiation Power:
- The extent of a buyer’s negotiation power depends on the level of competition for the desired property.
- In a competitive market, buyers have an advantage in negotiating favorable terms and concessions from sellers.
By strategically leveraging negotiation opportunities, buyers can potentially navigate the current challenging housing market more effectively, leading to a mutually beneficial deal.