Source: Yahoo! News — 

The share of home sellers offering concessions to close a deal jumped in the final three months of 2022, a new report found. That was before sellers resorted to cutting their listing price to attract buyers.

Approximately 42% of homes sold in the fourth quarter offered buyer incentives, Redfin data found, up from just over 30% in both the previous quarter and the fourth quarter of 2021. Those concessions included mortgage rate buy-downs, cash for repairs or closings costs, and warranties on household appliances. The inducements were more common in pandemic boomtown markets.

For homebuyers, those concessions partially helped to offset higher borrowing costs and experts expect these incentives to continue into 2023.

“Concessions have made a comeback as rising mortgage rates, inflation, and economic uncertainty have dampened homebuying demand,” the report said, “giving the buyers who remain in the market increased negotiating power.”

Buyers gain negotiating power

Last year as mortgage rates climbed at the fastest clip in 50 years, buyers fled to the sidelines, sending pending sales and closed sales down by more than 30% year over year. However, the buyers who remained gained newfound negotiation power on their side. Some even got a lower price and a concession, Redfin found.

A record 22% of homes sold by Redfin agents in the fourth quarter included both a concession and a final price below the listing price. Another record 19% included both a concession and price cut that occurred when the home was still on the market. A record 11% included all three, the report found.