In a seller’s market, demand and competition for properties is high. This gives seller’s a clear advantage—and because of that advantage, they’re typically not willing to budge on the price of their home. And if you ask them to come down on price? They’ll often go with another buyer.
But just because it’s not advantageous to ask sellers to bring down their home price doesn’t mean you can’t ask them for anything. A recent video from realtor.com outlined concessions sellers may be more agreeable to during the home purchase process—even when the market is on their side—including:
- Home repairs. If, during the home inspection process, you discover the property needs some sprucing up, it’s typically appropriate to ask the sellers to either tackle the repairs themselves before closing or, if they’d rather you manage repairs, to offer a discount to cover the costs.
- Closing costs. Sellers may not be willing to come down on price. But they’re sometimes willing to help cover closing costs, which can range between 2 percent and 7 percent of the home’s purchase price.
- Home decor and furnishings. Are you in love with the stainless steel refrigerator in the kitchen? The sofa in the living room? The painting in the upstairs hallway? If so, you can ask the seller if they’d be willing to leave those items behind—and include them in the home purchase. (Just make sure to talk to your lender, as including furnishings and decor in the home sale may change the terms of your loan.)
So, what does this mean for you? If you want to successfully buy a home in today’s seller’s market, it’s probably not in your best interest to ask the seller to bring down the price. But that doesn’t mean you can’t ask them to work with you on anything—and even if they won’t budge on price, understanding which concessions sellers may be agreeable to (and asking for them!) can ultimately help you save money on your home purchase.
We all know that this sellers market would not last too much longer and it seems to be coming to an end sooner than later. The turn towards a more favorable buyers market seems to be taking place with 14% of all listings taking a price reduction in June of this year which is up from just 11% in 2016. Everywhere you turned you heard nothing but, It’s a sellers market and a great time to sell! which was true and still is in some areas of Oakland County Michigan like Farmington Hills, West Bloomfield and others, but are the sellers realizing that things are changing in the opposite direction now that we are approaching fall of 2018?
In my business here in Oakland County Michigan, things seem to have been in a stalemate between home sellers and home buyers resulting in many homes staying on the market for longer periods of time then expected, even surprising us professional Realtors. The potential home buyers seem to know that the buyers market will soon be upon them, with the home sellers still bent on getting top dollar or even more. In Farmington Hills where I have several listings that get many showings, but no one is presenting or moving on them which leaves the sellers thinking “why isn’t my home selling” which leaves us to have to try and explain what is happening when we know the market trends seem to be pointing to a buyers market in many areas.
Part of this can be explained by rising interest rates, builders not meeting demand and foreclosed homes being bought in the past and are now rentals. The simple explanation is supply and demand in which was never reached that housing demand when prices were rising upward. The trend now seems to be on the downward swing especially on the high end housing communities in which rising housing prices benefitted those areas more favorably (which lately have seen close to 20% in their inventory price reductions). A buyers market is not a bad market but getting home sellers to realize and be more realistic in pricing their home may keep us in the black for the meantime while the housing market adjust to the coming changes.
The market changes will happen and it will correct itself as I feel this is exactly what this shift means. The supply and demand aspect of this years upswing left the market unable to respond to the needs of the home buyers, so a slight buyers market may correct the voids that this years home buying and home selling season missed out on. The market will shift back and forth but this home selling and buying season seemed to have ended with a slighter advantage headed toward a buyers market.
Buying a home for sale in Novi, Michigan is no walk in the park. It is not entirely a seller’s market. The sellers market keeps popping one out and if you are right on time, with the right offer, you might get lucky. This is why it is important to let a realtor handle this job because not only do they have up-to-date knowledge about the real estate market but they have some savvy skills to tip the offer in your favor.
When entering the bidding war, remember one thing: sellers are fickle. When they see a better offer coming their way, they abandon the buyer they are dealing with. This is why you need to be on your A-game when purchasing a house.
Understanding the Sellers Market
When the demand for the house is higher than what is available in the market, it means you are dealing in a sellers market. This type of market strives on one thing and one thing alone: competition. To prevent your offer from drowning in this competition, follow these five tips to get your offer at the forefront:
1. Have the Mortgage Pre-Approval Letter Ready
The mortgage pre-approval letter shows the seller that you are a serious buyer. The moment the final asking price is settled, get in touch with your lender and get the mortgage ball rolling. Show the seller the mortgage papers, so that he doesn’t pursue other buyers.
2. Hire a Realtor
As mentioned earlier, the realtor will make sure that the offer you are receiving is in your benefit. In case you feel that certain clauses mentioned in the contract don’t look good, the realtor will be at the negotiations table again, to make sure that you are happy.
3. Learn to Compromise in a Seller’s Market
There’s a high possibility that you might not find some of the amenities you were looking for in your home for sale in Novi, Michigan. This doesn’t mean that you should walk away from a good offer. Remember, never go for houses that are listed at a high price because the seller might not lower the price and then you will be left disappointed.
4. Higher the Down Payment, Higher the Chance of You Getting the House
20% is the ideal down payment that every buyer loves. This will give you an edge in the competition and the seller will be more inclined towards selling you the house.
5. Speed Up the Home Inspection Process
When you have put down the earnest deposit, you cannot back out of the deal or you will lose this money… unless the seller lied about something on the home inspection report. You are given a time period of 2 weeks, where you need to conduct all your investigations about the house. Get the home inspection done in the first week and spend the second week in calculating repairs to see whether the house is worth it or not. Will the house bring your profit when you will sell it in the future? These two weeks are crucial because after they have passed, you won’t get your money back even if you back out of the deal thinking you don’t like the house.
Ready to dive into the seller’s market with your realtor? Follow these five tips and you will find your home for sale in Novi, Michigan in no time. If you want to buy a house that falls under your budget and has all the features you need, then visit Homes2MoveYou. Get in touch with a real estate agent and start seeing houses in areas of your liking.