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Home buyers' negotiating power gains: Zillow Tuesday, February 02, 2010
NEW YORK (Reuters) – Home buyers in much of the United States paid thousands of dollars below asking prices in December and for the first time in 11 months gained negotiating power, real estate website Zillow.com said on Tuesday
According to December Zillow Real Estate Market Reports, buyers paid 2.7 percent less, or a median of $5,618 below the listing price on homes bought in December, up from $5,538, or 2.6 percent, for homes bought in November.
The gain, however, was still far less than December 2008 when buyers bargained a median 4.5 percent, or $10,018, off the last listing price, Zillow said.
The data is calculated by comparing the last listing price of individual homes and the final sale price.
November had marked the 10th consecutive month discounts shrunk, meaning buyers were negotiating less and less off the final asking price each month.
More buyer negotiating power tends to put downward pressure on overall home prices and may push more mortgages "underwater." This negative equity has been one of the biggest banes of homeowners, making many unqualified for home loan refinancing and preventing some from selling.
Borrowers in negative equity, meaning they owe more on their mortgage than their home is currently worth, are more prone to defaults and foreclosures.
Buyers' negotiating power peaked in January of 2009 when buyers were paying 4.5 percent off the asking price, a median of $10,178, Zillow said.
In December, 20.5 percent of the listings on Zillow had a price cut, unchanged versus November. In December 2008, 32.3 percent of listings had a price cut.
In some markets, buyers continued to negotiate large discounts
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