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Is Homebuyers’ Negotiation Power on the Rise?

Discounts on listings = negotiation power?

Arm Wrestling negotiatingZillow Real Estate Market Reports for homes bought in January show that buyers paid 2.8% below the listing price- that’s a median of $5,823. Zillow notes that December was “the first time in 11 months that buyers gained back negotiating power; for much of 2009, buyer discounts shrank as real estate markets across the country improved.”

January performed nearly the same as December which saw an average 2.7% discount on purchased homes. Zillow reports that nearly one in five homes for sale on their site had at least one price cut in January, so these reports could indicate that homebuyers’ negotiation power is on the rise.

It’s not so cut & dry

Ted Mackel with Keller Williams Realty in Simi Valley, CA said, “In my trade area negotiations are all over the place. Certain homes in certain price ranges favor the sellers while others favor the buyers. All entry-level homes here in the Simi Valley area have the advantage to the selling side as there is more competition for the available inventory. Also since the short sale and REO sales comprise 40% to 50% of the closings, buyers pretty much have to agree to the terms of corporate influence.” He said, “There is a much different situation going on in the higher price ranges as the market times are longer and there are fewer buyers.”

Mackel continued, “Just to throw a wrench in the whole process, list to sell ratios as reported by MLS systems are inaccurate. In my area, that ratio is being calculated off the list price at the time the offer is accepted. This completely skews the data as the original list price should be the number calculated against the final sales price. I’m not sure exactly who’s responsible for tweaking that statistic but it paints a poor picture for sellers getting ready to put their home on the market.”

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Nashville Grant

    March 10, 2010 at 12:51 am

    The power lies with the money. Sellers need it and buyers have it. Buyers have the ability to rip a seller’s heart out by their wallet right now. Only, some sellers have a really thick chain.

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