Our real estate market has been changing for some time now due to rising interest rates, shifting home values, and buyer demand. As a result, many sellers have been asking how these changes, especially higher interest rates, are affecting negotiations and real estate deals.
Back in 2022, the Federal Reserve started raising interest rates to stabilize inflation and decrease the amount of borrowing and loans. As a result, we’ve seen rising interest rates for over a year, which has cooled buyer demand in many markets. This was the desired and expected result from an economical standpoint, but it’s also changed how buyers and sellers are approaching real estate deals
Because buying a home has gotten more expensive due to higher interest rates, we’re seeing buyers becoming more cautious about going into real estate deals and paying higher prices. Today’s buyers have to be much more careful about what goes into their mortgage payments as opposed to 2020’s buyers, who had record low-interest rates.
For some sellers, this caution and concern on the buyer’s part has resulted in more negotiation and, in some cases, lower offers initially. While we were seeing buyers in 2020 and 2021 enter crazy bidding wars or waive inspections in the hopes of snagging a home off the market, today’s sellers should not expect the same behavior.
What does this mean for today’s sellers? First, you need a great real estate agent to get you through the selling process. We are still in a strong seller’s market, and an experienced real estate agent will help you make the most of that fact. With the right real estate agent, you’ll be able to attract the best potential buyers and make a strong deal.
You also need to prepare for more intensive negotiations when it comes time to close the deal. Buyers are much more likely to negotiate on things like closing costs, repairs, and of course, the purchase price. Plan for these negotiations to happen before you accept an initial buyer offer. It can also be smart to prepare for any concessions that you’re willing to make to the buyer.
Remember, your real estate agent will guide you through every step of the home selling process and provide strategic advice before listing, while marketing, and at the negotiating table so you can make the most money possible while selling your home.