Here's some good information about the housing market.
There's a great selection of homes for sale. Just a few years ago, the number of homes for sale was very low and buyers had to settle for what they could find. It is now a "buyer's market."
The inventory of unsold properties is growing. Listings are taking longer to sell. Buyers not only have more choices than ever before, but they can negotiate a lot more for their money during a buyer's market. Sellers are more eager and flexible.
The bidding wars are over. The "buying frenzy" days of quick home sales, multiple offers
and pricing wars are gone. No more competitive bidding!
Today, you can make an offer and expect to be able to negotiate a better price with a seller. A few years ago when you made an offer, the only question was how high above list price would a buyer have to bid in hopes of making the best offer.
Sellers are paying buyer's closing costs. Sellers are more willing to pay lender-approved closing costs for a buyer. Some will buy down the interest rate on a buyer's loan. On a "3-2-1 interest rate buy-down," sellers may be willing to buy down the interest rate for the first three years of your loan.
For example, if the fixed interest rate on a 30-year mortgage is 6.125 percent, the first year's payment would be based on a 3.125 percent interest rate. The second year, the payment would be based on 4.125 percent interest rate. The third year, the payment would be based on 5.125 percent interest rate. In the fourth year, the interest rate and payment would adjust and remain at the original 6.125 percent.
The seller would pay the difference in the interest to the lender (up front in escrow) between what the buyer should have paid with the market-rate loan in the first three years and the lower "buy-down" interest rates.
