Home buyers gained negotiating power in many markets during the second quarter of the year, finding greater room to haggle on list price. Just 15% of homes in the largest metro areas during this time sold for the seller’s original asking price, according to CoreLogic data, a sign that sellers should be willing to field lower offers.
Sixty-one percent of homes sold in the second quarter were discounted, up from 57% a year ago, according to the data. Discounted sales were most common in Miami (where 80% of homes sold below list price), Chicago (70%), and Houston (70%). Still, many homeowners in these areas have seen their property appreciate since purchasing. Further, low appraisals are becoming less of a transaction hang-up.
In a separate study by Quicken Loans, homeowner expectations about list price lag behind appraisal opinions by about one-half of apercent. In October, appraisals were an average of 0.45% lower than what homeowners expected, according to Quicken’s National Home Price Perception Index. The gap between the average owner estimate and appraiser opinion has been narrowing over the last three months. “With such a small difference between appraised values and estimated values, homeowners are less likely to run into snags in the mortgage process when refinancing or buying a new home,” says Bill Banfield, executive vice president of Capital Market for Quicken Loans.
Source: “Fewer Homebuyers Stuck Paying Above the Asking Price,” Chicago Tribune (Dec. 29, 2019) and Quicken Loans
