Want a Better Deal on a Home? Look for These 7 Signs

Want a Better Deal on a Home? Look for These 7 Signs

In July, the number of U.S. homebuyers hit a new low at 966,752, according to Redfin. 

Meanwhile, nearly 1.46 million sellers were in the market. That means sellers outnumbered buyers by nearly half a million people.

Which means buyers still in the market are facing less competition for available homes, creating real negotiating power with motivated sellers. 

In fact, nearly 80% of the largest U.S. metros (39 out of 49) are buyer’s markets. 

But real estate is local, and not every seller will be willing to make a deal. So how can you tell when you may have leverage on a particular home?

National trends provide context, but the clearest clues are often hiding inside the listing itself. Here are seven signs that a seller may be ready to negotiate, and how you can use that opportunity.

#1: The Home Has Been on the Market Longer Than Similar Properties

The longer a home sits on the market, the more motivated a seller may become.

A seller who expected to receive an offer within the first few weeks may become more flexible after watching nearby homes sell while their listing remains available.

That doesn’t automatically mean something is wrong with the property. The home may have been overpriced, poorly marketed or listed at an inconvenient time.

Compare its days on market with similar homes in the area. If the typical home sells in 20 days and this one has been available for 60, the seller may be more open to discussing the price or terms.

#2: The Seller Recently Reduced the Price

A price reduction is one of the clearest signs that a seller’s original expectations have changed.

One reduction may simply be a market correction. Multiple reductions can indicate that the seller is becoming increasingly motivated to attract an offer.

Pay attention to:

• How much the price was reduced

• How long the home was listed before the reduction

• Whether there have been multiple reductions

• How the current price compares with recent nearby sales

A price reduction doesn’t guarantee the seller will accept a low ball offer. However, it can create an opening to make an offer supported by local sales data.

#3: The Listing Fell Out of Contract

When a pending sale falls apart and the home returns to the market, the seller may be especially ready to negotiate.

They have already gone through the process of accepting an offer, completing paperwork and preparing for a move. Starting over can be frustrating and may disrupt their timeline.

Before making an offer, ask your agent if they are able to find out why the previous contract ended. It could have been caused by the buyer’s financing, an inspection issue, an appraisal problem or another complication.

If the issue was unrelated to the property—or is something you are prepared to address—you may be in a stronger negotiating position.

#4: The Home Needs Repairs or Updates

A home that needs work can create more negotiating opportunities, especially when nearby move-in-ready homes are available.

Outdated kitchens, aging systems, worn flooring or obvious repairs may discourage buyers who don’t want to take on a project. That smaller buyer pool can give you more room to negotiate.

Depending on the home and your financing, you could ask the seller to:

• Lower the purchase price

• Complete certain repairs

• Provide a credit at closing

• Contribute toward your closing costs

Before deciding what to request, get estimates for any significant work. A cosmetic project may be manageable, while an expensive structural or mechanical issue could change whether the home makes financial sense.

#5: Several Similar Homes Are for Sale Nearby

More choices generally give buyers more leverage.

If several comparable homes are available in the same neighborhood or price range, sellers have to compete for your offer. That can make them more willing to adjust the price or offer better terms.

Compare each home’s:

• Asking price

• Condition and updates

• Days on market

• Recent price changes

• Property taxes and fees

• Included features

Letting a seller know that you are considering other comparable properties can strengthen your position, especially if their home has been available longer than the alternatives.

#6: The Seller Has Already Moved

A vacant home may indicate that the seller is carrying costs for a property they no longer use.

Mortgage payments, insurance, taxes, utilities and maintenance can add up. If the seller has also purchased another home, they may be managing two sets of housing expenses.

This doesn’t mean you should assume the seller is desperate. But their timeline and carrying costs may matter as much as the final purchase price.

A clean offer with reliable financing and a convenient closing date could be especially attractive, even if it isn’t at the full asking price.

#7: The Listing Has Received Little Buyer Interest

Limited activity can be another sign that you may have room to negotiate.

Your agent may be able to determine whether the home has received offers, how busy its open houses have been and whether other buyers are actively considering it.

Signs of limited interest can include:

• Few showings

• Repeated open houses

• No offers after several weeks

• Frequent listing updates

• New incentives or concessions

• Language suggesting the seller is motivated

If there are no competing offers, you may have more time to complete inspections, evaluate the property and negotiate without the pressure of a bidding war.

What Can You Negotiate When Buying a Home?

A lower purchase price may be the first thing that comes to mind, but it isn’t your only option.

Depending on the property, seller and local market, you may be able to negotiate:

• Closing costs

• A mortgage rate buydown

• Your preferred closing date

• Additional time to complete inspections

• The inclusion of appliances or furnishings

• More flexibility with contingencies

• Credits for repairs or improvements

Use Your Leverage Without Losing the Home

Having leverage doesn’t mean submitting an extremely low offer or making unreasonable demands.

A seller may be willing to negotiate, but they still want to feel that the offer reflects the value of their home. Push too aggressively and they may reject the offer or become less willing to work with you.

The goal is to use market data and the seller’s circumstances to build a strong, reasonable offer.

Before deciding what to negotiate, consider:

1. How the asking price compares with recent sales

2. How long the home has been available

3. Whether the seller has already reduced the price

4. The property’s condition

5. Whether other buyers are interested

6. Which terms appear most important to the seller

7. Which concessions would provide the most financial value to you

Sometimes, a closing-cost credit or mortgage rate buydown will help you more than a small price reduction. Your agent and lender can help you compare the numbers.

Is This a Good Time to Buy?

Redfin Senior Economist Asad Khan says the current market may create an opportunity for buyers and sellers to meet in the middle:

"Buyers are dropping out faster than sellers, giving the buyers who remain more options and more negotiating power. At the same time, uncertainty around whether the Fed will hike rates–and this summer's rising mortgage rates–are keeping many would-be buyers on the sidelines. That makes the stretch between now and Labor Day a potential sweet spot for people who need to move: Buyers have leverage, while motivated sellers may be willing to negotiate before the early-fall rush brings some buyers back to the market. This could be the best chance for buyers and sellers to meet in the middle."

That doesn’t mean every home is a bargain or that every local market favors buyers. A well-priced home in a popular neighborhood can still receive multiple offers.

If you are financially prepared to buy, today’s slower demand may give you something valuable: choices.

Rather than trying to perfectly time home prices or mortgage rates, focus on whether you can find the right home, afford the monthly payment and negotiate terms that make the purchase work for you.