December 15th, 2020 12:42 PM by Jackie A. Graves
When COVID-19 first hit the US, home sales dropped, and most experts thought it would bring about a buyer's market. Fast forward to end of 2020 and prices are rising, homes for sale are flying off the market, and inventory is low and continuing to drop. The real estate market is a seller's market, with no indication that will change going into 2021.
Anyone in the market to buy a new home has witnessed this firsthand. Home sellers may have 10 competing bids by close of the first day it’s on the market. This means that price is harder to negotiate for buyers, as the seller can just go to the next in line if your offer isn’t high enough. Additionally, sellers are in the position where they can ask for more commitment upfront. “We’re seeing more full cash buys now. If the transaction isn’t in cash, more sellers are now asking buyers to waive the mortgage contingency in the contract,” says Bryan Parkhurst, a NY-based real estate investor.
Although buyers may not have much wiggle room in terms of the upfront financials, there are ways they can make up for some of this during the negotiation process. Ryan Dibble, COO of Flyhomes, advises homebuyers to think beyond list price when it comes to the purchase of a new home.
No matter the market conditions, Dibble believes the key in the negotiation process is to not focus solely on ‘winning’. Try to be fair, reasonable and keep everyone happy. “Home buying is a human transaction and trust needs to be established between the buyer and seller, because this is such a significant and important transaction,” Dibble says. “If everyone is happy throughout the process, then the process will be much easier for all involved.”
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