Becoming a more sophisticated buyer is going to be an increasingly essential skill as you navigate the American real estate scene against the backdrop of falling mortgage costs.
The recent decision by the Federal Reserve to cut its cash rate target by 0.5% will likely have a profound impact on the attitude of buyers and sellers after two tough years of high mortgage costs.
For buyers, there will be two visible impacts.
Firstly, you’re going to see more competition as others enter the market with greater spending power.
Secondly, you’ll experience a wider choice of properties whether you’re looking for a house, apartment or condo. More properties will start to come onto the market as sellers feel increasingly confident they’ll receive a good sales price.
Seller confidence will be a challenge for buyers in the coming months. It’s possible your abilities to negotiate will be tested. Which is why having a great agent on your team is so important.
Below, there are some helpful tips for buyers as the market dynamics change in our neighborhood.
Don’t be Afraid to Negotiate
- A seller will be as keen to strike a deal as you. By asking lots of questions about why the property is for sale, you’ll likely uncover the prime motivation for the sale. This will give you leverage in a negotiation.
- It’s crucial to understand the market value of the property you’re targeting. Without this information, you’ll not know whether you’re paying too much, getting a bargain or striking a win-win deal with the seller.
- Seeking concessions to get you over the line is a legitimate strategy. You might ask the seller to pay your legal fees. Or you can ask for a fast or slow settlement, depending on your needs. Requesting problems be fixed or a discount offered to remediate the issues is another reasonable approach.
Importance of a good agent
- Picking a good agent is essential to a successful purchase. While you’ll have the ultimate say in what happens, you want an agent with deep market knowledge to ensure you explore every option and leverage your position fully.
- Every market has its own dynamics. The number of buyers in your area compared with the number and quality of available homes will affect how you approach your negotiation. Your agent must be able to read the local scene and adapt your approach accordingly.
Falling in Love
- Buyers should buy with their heart but negotiate with their heads. Falling in love with a property is a wonderful experience, but keep your financial feet on the ground. A great agent will delight in your enthusiasm but protect you from paying over market value.
Be Ready To Strike
- With the market warming up thanks to the Fed’s rate cut, you’ll need to move quickly when you find your dream home. Have your finances organized. It will help you understand your budget limitations and put you in a position to make an offer early.