By Kerry Smith
Nationally, it’s 45.5%, though slightly less in the two Florida metros noted: 41.7% in Miami (up from 31.8%) and 41.3% in Orlando (up from 33.3%).
SEATTLE – Home sellers gave concessions to buyers in 45.5% of home sales recorded by Redfin agents during the three months ending Feb. 28, 2023, in a year-to-year comparison, according to a report from Redfin – the highest share of any three-month period in Redfin’s records, which date back to June 2020. One year earlier, 31.1% of sellers gave concessions.
In two Florida metros cited by the study, slightly fewer sellers gave concessions:
- Miami: 41.7% of sellers, up from 31.8%. Overcall change: 9.9 percentage points
- Orlando: 41.3% of sellers, up from 33.3%. Overall change: 8.0 percentage points
Concessions have become more common as rising mortgage rates and higher home prices have caused many buyers to put their plans on hold, which motivates sellers to throw in freebies to attract the buyers who remain. The concessions often include things like an offer to fund repairs, cover closing costs and/or pay to buy down buyers’ mortgage rates.
The housing market has reversed itself over the past two years. In 2021, a surge in homebuyer competition fueled by rock-bottom mortgage rates forced buyers to offer everything but the kitchen sink to win a listing. Today the market is more balanced with buyers in some areas often in the driver’s seat.
“Buyers today are way more demanding and selective. They’re willing to wait to find the perfect house, which wasn’t the case during the pandemic homebuying boom,” says Elena Fleck, a Redfin real estate agent in Palm Beach, Fla. “During the peak of Covid, it took two to three days to sell anything regardless of the condition, location or square footage. Now, a home that’s not perfect may stay on the market for three to four months if the seller doesn’t throw in something to sweeten the deal.”
Fleck says buyers are ignoring some homes.
“Any home with a roof that’s over eight years old is just sitting – buyers don’t want to put any additional funds into repairs. I had a few sellers offer credits for new roofs to close the deal. We’re also seeing more buyers ask for credits toward their closing costs.”
Sellers also lowering prices to lure buyers
In addition to concessions, sellers are increasingly likely to sell their home for less money than they hoped for, either by lowering the listing price or accepting an offer that’s less.
In the study, one out of four sellers (25.2%) did both, lowering their offer and also agreeing to a buyer’s bid that was less than the newly lower asking price. One out of five (20.6%) cut the listing price and also offered a concession. And more than one out of 10 sellers (13%) cut the listing price, accepted an offer that was even lower while also offering the buyer some type of concession.
Nationally, Seattle sellers gave the most concessions (51.6%) during the three months ending Feb. 28, up from 20.1% a year earlier. Only two metros had few concessions year-to-year, Austin, Texas ( down 3 percentage points) and Chicago (down 2.1 percentage points).
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