With mortgage rates above 7% for much of the year, many would-be buyers in Rochester, MN, are asking whether it makes sense to buy now or wait. The answer depends on the buyer, but the local market has shifted in ways that give prepared buyers more room to negotiate than they have had in years.
Alex Mayer of Rochester Area Homes by Alex Mayer is working with a steady flow of buyers right now, including first-time buyers, relocating buyers, buyers putting 20% down, and cash buyers. “They know that this is a market where they can get a deal,” he said. In one recent week, he was onboarding four new buyers, and two more reached out the same morning he shared that number.
Buyers Face Far Less Competition Than In 2020 And 2021
During the pandemic boom, Rochester buyers often offered $20,000 to $30,000 over asking, waived contingencies, and paid their own closing costs to win a home. Alex estimates that buyers in that period spent four to five times as much out of pocket as buyers need to today.
That has changed. Inventory has grown, and for the past 12 weeks, local market data has shown more price reductions than new listings. “Nowadays you’re not really competing with a lot of buyers,” Alex said.
Every situation still depends on how long a home has been on the market and whether other offers are in play. But in many cases, sellers are now open to conversations they would not have entertained a few years ago.
What Buyers Can Negotiate Right Now
Because Alex talks with sellers every day, he sees where the flexibility is. Depending on the home, buyers may be able to negotiate a lower purchase price, ask the seller to contribute concessions toward closing costs, and keep the inspection and other contingencies that protect them.
“We can negotiate, we can get concessions, we can possibly get a better purchase price,” Alex said. “Conversations that were not happening in 2020 and 2021.”
The buyers doing best, he says, are the ones who are comfortable with today’s monthly payment and understand that owning can still make more sense than renting over time. “The ones who have figured it out are doing really well right now,” he said.
You May Need Less Cash Than You Think
One of the most common misconceptions Alex hears is that buyers need 20% down. Many of his clients buy with 3% down, and some use state assistance to cover much of the rest.
He often points buyers to a Minnesota Housing program that offers a $14,000 interest-free loan to help with down payment and closing costs. Paired with the right loan, Alex says some buyers are purchasing homes in Rochester for about $1,000 out of pocket. “There are very real programs that are available to people, and I see people do it every single month,” he said.
Eligibility rules and program terms vary, so buyers should confirm the details with a lender before they start shopping. Alex covers more of these options on his page for first-time home buyers.
Don’t Base Your Purchase On A Rate Prediction
Alex avoids the popular advice to “marry the house, date the rate.” It suggests buyers can count on refinancing later, and no one can promise that. Buyers who heard that advice a few years ago saw rates rise instead, and there has been talk of rates going above 8%.
Alex has a crystal ball tattooed on his forearm, and he likes to tell clients it doesn’t work. His point is that a purchase should make sense at today’s payment. If rates drop and refinancing becomes an option later, that is a bonus, not the plan.
He expects current conditions to continue through the fourth quarter. For buyers, the opportunity is real, but it rewards preparation: talk with a lender early, learn which assistance programs fit, and find out how long homes are sitting in the neighborhoods you like so you know where there is room to negotiate.
“The clients that reach out to me are the educated clients that want to know what they’re getting into before we go out there,” Alex said. “And they’re the ones that are coming out and winning.”
Alex Mayer is a full-time Rochester, MN real estate agent, a 4X winner of Best Real Estate Agent in Rochester, MN, with 300+ five-star reviews. His core values are Education, Communication, and Responsiveness, which guide every part of his business. He has a “Direct Representation Model” – meaning his clients work directly with him, not a large team with junior agent handoffs. His promise: You’ll know what to expect, how to operate, and what needs to be done to be successful in the Rochester, MN, real estate market. He specializes in first-time homebuyers, Mayo Clinic and other relocating buyers, and Rochester, MN sellers, including move-up, downsizing, and estate sales. Alex is also known for his Alaskan malamute dogs, Atlas and Kaia, who are featured in much of his local branding.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.