Quck answer
In the current real estate market, houses are being sold for less than their asking prices. To get the best deal, follow these tips:
1. Do your research: Research the local market and comparable sales to understand the fair value of the property you’re interested in.
2. Be patient: Don’t rush into buying a house. Wait for the right opportunity when sellers may be more willing to negotiate.
3. Negotiate effectively: Make a reasonable offer based on your research and the condition of the property. Be prepared to negotiate with the seller to reach a mutually beneficial agreement.
4. Consider contingencies: Include contingencies in your offer, such as inspections and financing, to protect yourself and give you options to renegotiate if necessary.
5. Work with a real estate agent: An experienced agent can provide valuable insights and guidance throughout the negotiation process.
By following these steps, you can increase your chances of getting the best deal on a house in this buyer-friendly market.
Prospective homeowners who have been unable to enter the market due to high prices and bidding wars received some positive news when Redfin, a major real estate company, announced that the majority of homes sold in August were sold for less than the asking price.
While not all areas are experiencing this much-needed correction in the market, there are certain locations in the United States where homebuyers can find a good deal. We spoke with several real estate professionals to learn how buyers can secure a bargain on their new home.
What caused the sudden change in the real estate market?
Anyone who has been monitoring home prices in recent years has likely witnessed a drastic shift, with prices skyrocketing in early 2020 and then suddenly declining due to rising interest rates and a slowdown in demand for housing. Lindsay McLean, CEO and co-founder of HomeLister, explains, “The payment for the same house has almost doubled compared to a year ago, due to rising home prices and interest rates. The housing market has been growing at an unsustainable rate, and the high prices were bound to correct or level off. However, rising interest rates combined with inflation made the current prices unaffordable for many.”
Now that the buyer pool has decreased, there is less competition for the same properties. Unfortunately for sellers, they have been slower to adjust to the changing market than buyers, resulting in properties selling for less than their initial asking price.
Although it may seem like buyers are making lowball offers to take advantage of the changing market, McLean states that homes are still selling for higher prices than a year ago, making context crucial for Redfin’s recent findings.
Consider the comparables
Even if the reason homes are selling for less than the asking price is due to the struggling market, Vanessa Grisalez, a broker associate with Miami Residential Group, suggests some strategies to ensure a good deal. “Start by comparing the listed price with the most recent sales of similar properties,” she advises. “If you are looking at lower-priced homes, around $500,000 or less, and the listed price is close to the recent sales prices, it’s best to offer at or above the asking price.”
However, if the listed price is significantly higher than the recent sales prices, Grisalez recommends negotiating a lower price. “For higher-priced listings, the dynamic is the same, but more often than not, you will be offering less than the asking price. This is where most negotiations occur.”
Tip
To find out the most recent sales prices of comparable properties, consult with your real estate agent or use platforms like Zillow or REALTOR.com to look at recently sold homes of similar size, condition, and location.
Consider Houses That Are Priced Slightly Above Your Preapproval Amount (Within Reason)
Prior to starting your search for a house, it is important to have a mortgage preapproval that will determine how much you can afford to spend. Normally, it would not be advisable to look at homes that are priced higher than your preapproval amount. However, given the current state of home prices, Grisalez suggests that there are still situations where it is acceptable to consider homes that slightly exceed your budget.
If a home is priced only slightly above what a client can afford, Grisalez explains that she would be more willing to show the property to her clients. She suggests that it is helpful for the listing agent to be transparent about the client’s preapproval amount and whether they believe the home can be shown. If the negotiation range allows for it, the listing agent will be willing to show the property and provide access.
Have Realistic Expectations
The real estate market has been a popular topic in the finance world, leading some to believe that the recent market shift may indicate that it is the right time to make a move. While this may be true for certain individuals, such as those who have outgrown their current home or tenants who have realized that buying a home is more cost-effective than paying high rents, McLean advises others to prepare themselves for the possibility that we have not fully transitioned into a buyer’s market. She explains that buyers and sellers will always have their own expectations about the market, and she encourages sellers to focus on the actual market conditions rather than their ideal scenario.
“Sellers should be aware that as affordability decreases and interest rates rise, they may receive lower offers,” she says. “At the same time, buyers should understand that many sellers may be willing to wait another cycle or two before selling if they are not in a hurry to move and want to maintain their current low interest rates.”
You Can Still Make a Good Deal Even if You Pay the Asking Price
Despite the changes in the market, McLean explains that it is still a somewhat unpredictable market where some buyers may act more quickly than others, and some sellers may be more motivated than others. This is why she advises people to make offers based on market comparisons, their affordability, and their level of desire for a particular home. If a home is their dream home or the one that will bring the most happiness to their family or bank account, then simply having their offer accepted is already a good deal.
