You are likely hearing a lot of people talk about a shifting real estate market, price reductions, higher rates, inflations, etc. All of these terms relating to what is happening economically and in the real estate market. Many experts giving the advice that it is still a great time to buy and also still a great time to sell. It's true, this current climate is the perfect opportunity for creating a win win for both the buyer and the seller.Verify my mortgage eligibility (Feb 29th, 2024)
The National Association of Real Estate (NAR) is still reporting many areas in the US experiencing double digit appreciation on housing values. It has also been expected that this appreciation would slow down as the year continues. Many of the price reductions, or "improvements" we are seeing with homes for sale are a result of a slow down in projected appreciation and more available homes for sale which is normal this time of year. Often a Real Estate Agent will use appreciation data to price ahead of the market when listing a home, when appreciation has quickly slowed down, or there is an increase in supply it may becomes necessary to reduce the projected price. It does not actually mean the value of the home has changed from an appraisal standpoint, just the estimate of the value when it was brought to market. It can also mean that from a supply and demand standpoint, there is not as much demand for that particular home for some reason and reducing the price makes it more attractive to a potential buyer compared to another like property.
This is where the perfect win/win can be created. You see, a local Real Estate expert is the local professional in their market that understands more about the micro market they are in than anyone else. They know the trend on value, the demand for type and location, etc. A true local expert knows how to estimate the value of a listing, so just because the price is reduced does not mean it would not have appraised at the higher value. So how does that help a buyer and a seller?
Right now buyers are facing higher interest rates. There are also many first-time buyers without a large amount of money saved trying to find something in their budget. Having a seller who is willing to negotiate on the original list price provides the ideal opportunity for both parties to come out ahead.
If a seller reduces their purchase price by $20,000, obviously they make $20,000 less on the home. Although this may seem like a great deal for a buyer purchasing with financing, on average, this may only change their payment as little as $120 per month. However, if instead of reducing the purchase price by $20,000- a seller could offer a seller credit to the buyer of $10,000 or more. * The buyer could use that to buy down their interest rate and still potentially save on a monthly basis, or they could apply it to closing costs in order to use their personal funds for a higher down payment, or potential needs the house may have. They seller benefits by $10,000 and the buyer benefits with potential savings still creating a fantastic win-win for both parties!