Six Home Buying Rules You Should Break

The real estate market has been very active over the past several years but it seems that it is currently taking a bit of a slow turn. The COVID-19 pandemic that turned the housing market into a bidding war frenzy is a thing of the past. The industry is showing signs of a more stable and balanced market between sellers and buyers. According to a survey done by Lower, a fintech mortgage lender, six in ten potential homebuyers felt now is the time to purchase a home. That makes up only a little over half of the buying market.

This shift is due to the higher interest rates and less negotiating power on the buyer’s side. There are more options now for you to choose from but sellers are having to negotiate once again with buyers. This means in many housing markets across the country the market is shifting in the buyer’s favor. The new shift means out with the old pandemic rules so here are six rules that are okay to break when purchasing a home.

1. If you love a house, you have to make an offer immediately

During the pandemic, buyers were frantically trying to win the bidding war. Buyers had no time to hesitate or think about it overnight. Currently the market is cooling off and buyers have a little time to think before making an offer.

“In the past couple of years, you’d need to put an offer in within hours of seeing a home. And while inventory is still low, there are a lot more homes available on the market than throughout the pandemic since 2020. This has provided buyers an opportunity to actually shop around,” says Elizabeth Sugar Boese, a real estate agent with Coldwell Banker Realty in Boulder, CO.

Chief Economist at, Danielle Hale agrees that homes are taking longer to sell this year than they did the same time last year. “In general, you likely have more time to make an offer, although that’s certainly not a guarantee. If you’re on the fence about a home or its asking price doesn’t quite fit your budget, you might want to keep an eye on it, and if it doesn’t sell right away, you may have some room to negotiate with the seller,” says Hale.

2. Prepare to pay way over the asking price

Again, during the pandemic buyers were willing to pay way over asking price. Today, buyers have a little more leeway. Boese explained that she had a client that loved a home that was listed for $1,100,000 but could only offer $1,000,000. This time last year she said she would not suggest making that offer, but this year it’s a different story.

“We explained that the market had shifted, the home needed a lot of updates, and we were willing to do the renovations but also had an eye on several other properties. The sellers accepted without any counteroffer, and it appraised for the list price,” exclaims Boese.

“With the housing market shifting, it’s really not necessary to go all in on a home in an effort to win the bid, unless it’s in an area that is still hot. In fact, currently I have more buyers offering less than the asking price because there aren’t many buyers,” comments Jason Gelios, real estate agent with Community Choice Realty in Southeast Michigan.

3. Once you’re pre-approved for a mortgage, you’ll know what you can afford

For the past couple of years, the interest rates have been at historic lows. Pre-approvals more than likely held. The market is up and down a lot more these days and because of this the rates vary from week to week making it harder for a pre-approval letter to hold up.

“Recent mortgage rates have been moving up and down enough to impact home shopping budgets in a big way,” says Hale.

Pre-approval is not much of a guarantee nowadays

4. Waiving contingencies is worth the risk to get the house

This was definitely true during the pandemic. Buyers just wanted to stand out over all the other buyers that were bidding on the same property. In order to be chosen, buyers would waive all contingencies if need be. Home inspections and appraisals are a big safety net for a buyer and by waiving them, a buyer is putting themselves in a risky position.

“At the height of the pandemic, one of our buyers-an older single lady-was in fierce competition with other buyers for a small cottage that was over 100 years old, and we advised her she would have to waive all inspections and contingencies in order for her offer to be competitive. She did exactly that and ended up with a winning contract,” says Colleen Gustavson Brownell, a real estate agent with Hunt Country Sotheby’s International Realty in Virginia.

“For more than two years, we’ve seen no home sale contingencies. Now, my team has six loans in process with this contingency,” says Tan Tunador with Atlantic Coast Mortgage.

5. Don’t date ask a seller for concessions

Again, during the pandemic it was all for the seller in the housing market. During that market, asking for concessions from the seller would mean you would lose the deal. Now that the mortgage rates are higher, asking for a little from the seller is okay.

“The pandemic rule was ‘do what the seller wants.’ But now, more and more buyers are asking for price concessions, closing cost assistance., and scenarios buying the interest rate down. In the DC metro area, we are seeing homes sit on the market longer and buyers not being afraid to ask for concessions or price discounts,” replies Tunador.

6. You’ll need 20% down on a conventional loan

A higher down payment was a tool that many buyers used during the crazy bidding wars. During that time, many conservative buyers were looked over because they did not want to put down a huge down payment. To jump over this hurdle, lenders started to also write an additional approval letter stating that buyers were qualified for a 20% down conventional mortgage. Nowadays buyers can come in with just a 5% down payment and still go under contract.

“During the pandemic, sellers were not even considering lower down payment conventional loans, let alone FHA or VA. Now, we are having much more success getting our VA and FHA buyers under contract,” says Brian Kwilosz, a Chicago top agent.

If you are looking to purchase a home, contact a local real estate agent who can help you navigate the current market. Don’t let past rules fool you into thinking you cannot own a home.

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