Seller concessions are back in real estate. Here are 3 things to know.
We don’t have to tell our fellow real estate professionals this, but the market has certainly changed quickly during the past 18 months. Now can still be a perfect time to buy or sell, depending on your situation, but we wanted to emphasize one reality for both buyers and sellers.
The seller’s concession has returned – and it’s important for everyone involved to realize what this means. Back just a short time ago, buyers were conceding the need for a home inspection (Don’t do that, especially now) or offering way above the asking price.
Here are three things to know about seller concessions right now:
About 45 percent of sellers nationwide reported offering at least one concession. This data is from a Redfin survey earlier this year and does not include price reductions. This is the highest figure since at least June 2020. Home repairs, including roofing allowances, paying a higher share of closing costs or helping reduce a buyer’s mortgage rate are all examples of popular concessions being made right now.
Buyers can afford to wait for something better. As we continue to shift from the hot sellers’ market, buyers are more willing to keep searching for their dream home or at least the perfect deal. Consider these words from a Florida REALTOR® quoted in the article, “Now, a home that’s not perfect may stay on the market for three to four months if the seller doesn’t throw in something to sweeten the deal.” She expanded further and said roofs that are older than eight years are a huge drawback in her market.
This new reality may require an honest conversation or two with your clients. No matter which side of the offer they’re on, your buyer or seller may not realize just how much things have changed. We often talk about the importance of communication in this business, and now is the time to put those skills to work. Encourage your sellers to make repairs, increase curb appeal, or adjust the price to be competitive. You know what’s selling and what’s not right now. Apply that expertise. On the flip side, make sure your buyers understand what could be negotiated for each property they like.
All of us know that real estate ebbs and flows, but it’s always important to understand, and talk about the changes that are happening with our customers and partners. We thank you for continuing to choose our teams for your title and escrow services and are always here for you!