What's Negotiable: Your Buyer's Guide to Saving Money
Many homebuyers don't realize how many closing costs and terms are negotiable. This guide breaks down exactly what you can (and can't) negotiate, when to negotiate it, and how to do it effectively.
What's Negotiable: Your Buyer's Guide to Saving Money
Closing Costs You CAN Negotiate
These fees are set by private companies, not the government, which means there is room to negotiate, shop around, or ask for waivers.
Closing Costs You CANNOT Negotiate
These costs are set by government agencies or regulated entities. The amounts are fixed and apply equally to all buyers.
Seller Concessions
Seller concessions are when the seller agrees to pay a portion of your closing costs. This reduces the amount of cash you need at closing without changing the purchase price. The seller's contribution is built into the transaction and paid from their proceeds.
Maximum Seller Concession Limits by Loan Type
| Loan Type | Max Concession | Details |
|---|---|---|
| Conventional | 3% to 9% | 3% with less than 10% down, 6% with 10-25% down, 9% with 25%+ down |
| FHA | 6% | 6% of the purchase price regardless of down payment |
| VA | 4% | 4% of the purchase price; certain costs excluded from this cap |
| USDA | 6% | 6% of the purchase price |
How to Ask for Seller Concessions
- 1.Work with your real estate agent to include the concession request in your written offer (e.g., “Seller to contribute $8,000 toward buyer's closing costs”).
- 2.In a buyer's market (more inventory than buyers), sellers are more likely to agree. In a seller's market, concession requests may weaken your offer.
- 3.Consider offering a slightly higher purchase price to offset the concession. The net cost to the seller stays the same, but you get help with cash at closing.
- 4.Be aware that concessions cannot exceed your actual closing costs. If your costs are $7,000, a $10,000 concession request will be reduced to $7,000.
2026 trend: With elevated mortgage rates, buyers are increasingly requesting seller concessions, particularly for temporary rate buydowns. Sellers in markets with rising inventory are more willing to offer concessions to close deals.
Repair Credits vs. Repairs
After a home inspection, you can negotiate with the seller to either make repairs before closing or provide a credit at closing so you can handle the work yourself. Each approach has advantages depending on the situation.
When to Ask for Repairs
- Major structural issues (foundation, roof, load-bearing walls)
- Safety hazards (electrical, plumbing, mold, radon)
- Issues required by your lender for loan approval (FHA/VA property requirements)
- Problems the seller has the expertise or contractors to fix properly
When to Ask for a Credit
- Cosmetic issues or non-urgent upgrades (aging carpet, dated fixtures)
- When you want to choose your own contractor and quality of work
- When the seller is unlikely to invest in high-quality repairs
- When you want to bundle credit toward closing costs
How to Calculate a Fair Credit Amount
- Get written estimates from licensed contractors for each repair item identified in the inspection.
- Focus on material defects and safety issues, not cosmetic preferences. Sellers are more likely to negotiate on legitimate problems.
- Present your request as a specific dollar amount backed by estimates, not a vague demand. “$3,200 credit based on contractor quotes for roof repair” is more effective than “fix the roof.”
Rate Buydown Options
Rate buydowns reduce your mortgage interest rate, either permanently or temporarily. Understanding the difference can save you thousands over the life of your loan.
Permanent Buydown (Points)
- 1 discount point = 1% of your loan amount
- Each point typically reduces your rate by approximately 0.25%
- The rate reduction lasts for the entire life of the loan
- Best for buyers who plan to stay in the home long-term (past the break-even point)
Example: On a $400,000 loan, 1 point costs $4,000 and reduces your rate from 7.00% to approximately 6.75%. That saves roughly $68/month. Break-even: about 59 months (just under 5 years).
Temporary Buydown (2-1 or 3-2-1)
- Seller funds a temporary rate reduction for the first 2-3 years
- 2-1 buydown: Rate is 2% lower in year 1, 1% lower in year 2, then full rate in year 3+
- 3-2-1 buydown: Rate is 3% lower in year 1, 2% lower in year 2, 1% lower in year 3, then full rate
- Best when you expect rates to drop (allowing you to refinance before the full rate kicks in)
Example (2-1): On a 7.00% rate, you pay 5.00% in year 1 and 6.00% in year 2. The seller funds the difference (held in escrow). If rates drop, you refinance before year 3.
When Does Each Make Sense?
Choose permanent points if:
- - You plan to stay 5+ years
- - You want guaranteed long-term savings
- - Current rates are reasonable and refinancing is unlikely
Choose a temporary buydown if:
- - You expect rates to decrease in 1-2 years
- - You want lower payments now to ease into homeownership
- - The seller is willing to fund it as a concession
Negotiation Timeline
Different negotiations happen at different stages of the homebuying process. Knowing when to negotiate each item helps you stay organized and avoid missing opportunities.
Before Making an Offer
Pre-offer
- •Research comparable sales to determine fair market value
- •Get pre-approved so your offer is taken seriously
- •Evaluate current market conditions (buyer's market vs seller's market)
Making the Offer
Day 1
- •Negotiate purchase price based on comparables and market conditions
- •Request seller concessions toward closing costs
- •Include desired contingencies (inspection, appraisal, financing)
After Inspection
Days 7-14 (typical)
- •Negotiate repair credits or repairs based on inspection findings
- •Request seller-funded home warranty
- •Renegotiate price if major issues are discovered
After Appraisal
Days 14-21 (typical)
- •Renegotiate price if appraisal comes in below purchase price
- •Ask seller to lower price to appraised value
- •Negotiate difference split if seller resists full reduction
Loan Estimate Review
Within 3 business days of application
- •Compare lender fees across multiple loan estimates
- •Negotiate origination fees and rate lock terms
- •Shop for title insurance and settlement services
Before Closing
3+ days before closing
- •Review Closing Disclosure for any unexpected charges
- •Challenge fees that increased beyond legal tolerances
- •Verify all negotiated credits and concessions appear correctly
Every contingency in your contract has a deadline. Missing an inspection contingency deadline means you lose your right to negotiate repairs. Missing a financing contingency deadline could put your earnest money at risk. Keep a calendar of every deadline and set reminders.
Common Negotiation Mistakes
Even experienced buyers make these negotiation errors. Knowing what to avoid can save you money, time, and deal-killing stress.
Asking for too many concessions in a competitive market
In a seller's market with multiple offers, loading your offer with concession requests makes it less attractive. Focus on the 1-2 concessions that matter most to you and keep your offer clean.
Not getting credits in writing
Verbal agreements mean nothing at the closing table. Every negotiated credit, repair, or concession must be documented in writing as an addendum to your purchase agreement. If it is not in the contract, it is not enforceable.
Missing contingency deadlines
Your contingency periods (inspection, appraisal, financing) have firm deadlines. If you miss a deadline, you may lose your right to negotiate on that item or even lose your earnest money deposit. Track every deadline carefully.
Focusing only on price and ignoring closing costs
A seller might not budge on price but may happily offer $5,000 in closing cost credits. Think of the total cost of the transaction, not just the purchase price.
Not shopping for third-party services
Title insurance, home inspections, homeowner's insurance, and settlement services are all shoppable. RESPA gives you the right to choose your own providers for many of these services. Failing to shop around can cost you hundreds or thousands of dollars.
Waiving the inspection contingency
Skipping the inspection to make your offer more competitive can backfire badly. An inspection is your best opportunity to negotiate repairs or credits and to discover hidden problems before they become your responsibility.
