Buyer and Seller Expectations, Is it a Good Deal?

Rates had a rough week. CPI came in at 0.3% for the month, only a bit above expectations, but the market reacted as if the report were much hotter. The 10-year Treasury is back above 5% (5.15%), and mortgage rates rose about a quarter point in two days.

One silver lining: the spread between the 10-year and the average 30-year fixed is running around 2.3–2.4%, which is wider than normal. Treasuries usually move first, and mortgage-backed securities follow. If things settle down, we could get some of that quarter point back as the spread tightens. My advice to buyers: don’t drive yourself crazy watching every eighth of a point.

The bigger topic on this week’s Beyond the Rate is how buyers and sellers judge value in this market.

Buyers: You’re negotiating against the seller’s bottom line, not the list price.
If a seller owes $300K on a house listed at $330K, there isn’t room for a 15% discount. Some sellers literally can’t bring money to closing. Getting $40K off a home that was overpriced isn’t a better deal than paying asking price on one that was priced right from the start. Have your agent show you the comps, decide whether you’ll stay long-term, and ask whether the house fits your life. A home that has already had a couple of price cuts may be at its floor, and that can still be a good buy.

Sellers: Decide on your number before you list.
Your agent’s pricing advice matters more now than it has in years. If you want to test a higher price, set the plan up front: if the market doesn’t respond within about a week, you reduce. Pricing it right from day one usually beats sitting on the market and chasing the price down. And if it goes under contract quickly, that doesn’t mean you left money on the table. The price is the same either way.

Both sides: Expectations need to be set clearly and kept realistic. Many buyers are still negotiating as if it’s six months ago, and many deals fall apart because neither side’s numbers were ever realistic.

🎧 Full episode: jcharleslending.com/podcast

Realtors, if you have a negotiation you’d like a second opinion on, reach out. We love strategizing.