Residz Team 3 min read
Home sellers are competing to win over choosier buyers, and a new survey out of the U.S. shows the extent they’ll go to.
The survey by Realtor.com and HarrisX found 100% of sellers offered to make at least some repairs when asked. Home buyers may not realise they can ask for repairs to be made by the seller before they purchase the property, but the survey shows the majority of buyers do this. It found a little over two-thirds (67%) of buyers asked for repairs, double the number who asked for repairs six to 12 months ago.
Tens of thousands of dollars to repair before listing
Many sellers will make repairs before they list their home in anticipation of such requests. The average amount that recent sellers spent on repairs prior to listing was $14,163 US ($21,450 AUD), according to the survey. Like the U.S., sellers in Australia are leaving no stone unturned to ensure they have a better than 50-50 chance of success at auction.
Inspections pick up issues
When buyers made requests for repairs it usually followed an inspection report, which may have picked up an issue, the report found.
Only 5% of sellers reported that their buyer did not request an inspection prior to purchase. 95% of sellers said their buyer did request one, and that’s up from 82% of sellers who sold six to 12 months ago. With fewer bidding wars, buyers know they have more power at the negotiation table.
“That shows that buyers are growing bolder, and they wouldn’t ask if they didn't have some expectation of a seller accepting their requests,” says George Ratiu, manager of economic research at Realtor.com.
Change from last two years
It’s a big change from the real estate market conditions of the last two years, when buyers watched the market boom and despaired of ever being able to buy a home. Back then they struggled with affordability but also with frenzied competition, with the real risk of losing out to other buyers if they organised home inspections or asked for concessions from the sellers.
“That’s just not happening anymore,” said George Ratiu.
Buyers paying below asking price
The survey also showed 31% of buyers in July paid below the asking price, and a similar percentage of sellers dropped their prices below asking.
“Rising inventory is motivating more of them to resort to price cuts in order to successfully close transactions,” said Ratiu.
In Australia, CoreLogic reports vendor discounting has also increased from the recent low of -2.8% recorded in the three months to April last year. In the three months to August, the median vendor discount at the national level was -4.0%.
Most sellers accepting terms that help the buyer
The survey found 92% of sellers accepted some buyer-friendly terms. These include:
“At the same time, it’s worth noting that the majority of recent sellers are still satisfied with the outcome of their home sale,” Ratiu added.
While 88% of Gen Z sellers indicated they were satisfied with the sale, 94% of millennials and 100% of Gen X and Baby Boomer sellers indicated satisfaction.
Experts say homes must be safe before sale
Jim’s Inspections says technically, no home repairs are mandatory following an inspection. However, it says, many states and mortgage companies have safety requirements your home must meet in order to be eligible for the completion of sale. They include the structural stability or liveability of the house.
Walking away an option if seller refuses to repair
Jim’s Inspections says buyers have the right to ask that the seller make specified non-mandatory repairs, as long as they have not agreed to an “as is” arrangement. The purchaser can freely choose to walk away from a sale if a buyer demands certain repairs and the seller refuses. This can be difficult to do once you've become heavily involved in a home, but it may be the best option if you can reach no other deal.
Make offer contingent on house inspection says expert
Making an offer contingent on the house inspection is one way to avoid making this difficult decision, says Jim’s Inspections.
“That makes it clear from the start that the buyer may want to make changes, and both the buyer and the seller know that, as long as the requests are fair, the sale will be contingent on at least some of them being met.”
Residz can help buyers and sellers reduce the stress:
References:
Realtor.com Summer 2022 Sellers Survey
CoreLogic Monthly Housing Chart Pack - September 2022
Photo by Erik Mclean on Unsplash