How Inflation Is Helping Your Negotiations
Raise your hand if you have personally been victimized by inflation. Everyone raises their hands.
Inflation is the direct result of government pumping money into the economy. It occurs when spending on goods and services outstrips production. There are several different strategies to keep us in the healthy range of economic growth without stifling the purchase power of our currency. However, the one that everyone is talking about, of course, is the rise in interest rate.
SO, how does inflation help your negotiations? I could list numerous reasons why none of us should panic, but in reality, people will panic nonetheless. Take advantage of it. For the first time in nearly 10 years houses are not listed on the MLS and then under contract within 24 hours with 72 offers fighting for them. This may sound crazy, but now is the time we may be able to get a property at list price, OR EVEN LOWER! Since both sellers and agents are not used to this pattern of selling, it creates a sense of fear of re-listing a property if both parties are in a disagreement at inspection. Our team is starting to see an astronomical amount of credits being given to our buyers during the inspection period, because agents and sellers now fear going back to market. Sellers are conditioned and expect to be instantly gratified. Buyers are conditioned to waive the right to ask for anything at inspection, appraisal gaps, and so much more. If you are on the buy side, be bold by not selling your soul right out of the gate. Take your time and be strategic.
We are now entering a time wherein buyers can ask for massive inspection credits or for sellers to repair items before closing because sellers are WORRIED. This is a massive shift that will play heavily in the buyer’s favor.
Eventually the government will get inflation under control and interest rates will go back down. There is still a huge demand with very little supply, but demand will temporarily drop for a bit. Buy now while the opportunity to get seller concessions and a good purchase price is still an option. You can always refinance an interest rate, but you cannot refinance a purchase price.