2 Ways to Adjust your Homebuying Strategy to Score a Better Deal

When the market shifts, so should your homebuying strategy.

The market has continued to cool off as interest rates have continued to rise. With the interest rates hovering over 7%, more buyers are putting their home search on pause. However, it actually could be the best time to get a great deal! The reason for this is a simple case of supply and demand.

With less buyers (demand), and more houses for sale (supply), it gives buyers more negotiation power! Buyers can ask for more, because the sellers are getting more desperate to sell.

Days on Market

One way to find a good deal is to go after houses that have been on the market for a few weeks, rather than a few days. Right now, houses are sitting on the market for a lot longer compared to earlier this year. The average DOM, or "days on market", for NE Florida in April of this year was 12. Today, it is 36 days. When you, as a buyer, go after a house that has been sitting on the market longer, you have more power to ask for a better deal. That seller is most likely getting anxious to sell, that they might be willing to do whatever it takes to sell the house.

Seller Paid Discount Points

You might be inclined to ask the seller to lower the price of the home for you. However, a $10k to $20k price reduction won't make a huge difference for you. Remember, you'll probably be paying the loan off over the course of a 30 year period, so this price difference won't make a dent on your monthly payments. Instead, ask for a credit from the seller to use towards discount points!

Discount points are a way to "buy down" your interest rate. That's right...you can choose what interest rate you want, if you have the cash to buy it! And if you don't have the cash to buy it, you can ask the seller for a "seller credit" to pay for it!

Each "point" that you buy will reduce your interest rate by 0.25%, so if you buy 4 points, you can reduce your rate by 1%. Each point costs 1% of your loan amount. So if your loan is for $100,000, one point will cost you $1000. As you can see, it can get expensive, so asking for a seller credit to pay for discount points could save you a lot of money, both upfront, and in the long run.

Even though these interest rates seem scary, you don't have to go into hiding! There are ways to still be able to afford your house, you just have to get creative, and ensure you have a trusted realtor on your side who can negotiate your needs.

If you're ready to start your home search, text/call me, and I'd be happy to get you started!