Real estate experts explain how to navigate the market
Mortgage rates topped 7% for the first time in 2 decades
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Prospective homeowners who need to move now are not completely out of luck, even with elevated home prices and soaring mortgage rates, which recently topped 7% for the first time in two decades.
Real estate experts told FOX Business that there are still some benefits to jumping into the market right now.
For one, with competition waning, "buyers don’t have to make a decision quite so swiftly," according to Clare Trapasso, executive news editor of Realtor.com.
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"There is also much less competition now that fewer buyers can qualify for mortgages and can afford the homes they want," Trapasso said. "So, buyers are less likely to get entangled in costly, emotionally draining bidding wars."
A reduced price sign sits in front of a house Nov. 27, 2007 in Glendale, California. (David McNew/Getty Images / Getty Images)
During the red-hot housing market, competition was getting so stiff that homeowners were offering over-asking prices, dropping contingencies for inspections and appraisals, and closing on the home within a month, FOX Business previously reported.
Now, it is a buyer's market, according to Lauren Cangiano, an associate broker with New York City-based Brown Harris Stevens.
"They don't have to jump through hoops in five seconds anymore," said Cangiano. "They can make an informed, intelligent decision because things are staying on the market longer."
Ultimately, buyers now have an "opportunity to do more research," which was not the case in 2021, when homes were "flying off the shelf," according to Cangiano.
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Trapasso said she is also encouraging buyers to negotiate as much as possible and add appraisal and home inspection contingencies to their offers.
A "Home for Sale" sign points to an existing single-family residence for sale Oct. 4, 2006 in Park Ridge, Illinois. (Photo by Tim Boyle/Getty Images)
This gives buyers the ability to renegotiate in the event that a home does not appraise for as much as the buyer offered, Trapasso said.
"If a professional home inspection uncovers some pricey problems, they can also go back to the bargaining table," she added.
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Trapasso also noted that buyers can even try to submit bids under the asking price if a home has been sitting on the market for a while.
Contractors work on a home under construction in Antioch, California, on Tuesday, June 14, 2022. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
Similarly, Cangiano said sellers understand what is going on in the world and will be more negotiable in price because of it.
"In my opinion, this is when you should be… deep diving into a buy and getting yourself the best deal," she said.
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If it is a new construction, buyers can even ask the seller or the builder to contribute to their closing costs or even make some improvements to the property, which in turn "can save them a pretty penny," Trapasso said.