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Illustration of two people playing ping-pong. One side of the table has a sale sign drawn, and the other a house
Chris Gash for Money

When Bob J. saw a model home he liked in a subdivision northwest of Dallas in October, a quick 24-hour negotiation with the builder netted him a savings of $125,000, free furniture and a fully decked out backyard already complete with a pool.

“My real estate agent knew that the model home was four years old, and the builder was using another model for sales,” says Bob, who asked to be identified only by his first name and last initial because he doesn't want his new neighbors to know about the deal he got. “We were ready to buy, and we understood the builder’s need to sell.”

Bob’s negotiation went better than most. Still, his story demonstrates just how much the market has changed recently, as well as the power buyers have today — if they know their local market and understand the needs of the sellers.

Before the market started to slow a scant 10 months ago, buyers regularly duked it out in bidding wars for homes, but high mortgage rates have slowed demand. Today’s buyers can negotiate terms to their advantage for the first time in years.

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However, it’s still not a buyer’s market in most places. That means buyers can make demands, but there are dangers to pushing too far.

“Buyers need to consult with their real estate agent to know whether a house is priced right for the current market before they start negotiating,” says Evan Lacopo, a real estate agent and co-president of Douglas Elliman Real Estate in Arlington, Virginia. “If it’s priced right, then they need to decide what’s best for negotiations. Someone looking for a reduction in the sales price, a subsidy from the sellers for closing costs and a lot of repairs isn’t likely to get all that.”

Here are five ways buyers can start negotiating.

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1. Offer less than full price

Nearly 20% of sellers reduced their price before selling in November 2022, according to Realtor.com, but widespread sale price reductions haven’t occurred yet in most places. In fact, home prices rose 10% in October compared to October 2021, according to CoreLogic, a property information site. They dropped just 0.1% between September and October.

“Be smart and don’t make a lowball offer,” says Nathan Zieman, a real estate agent with The Corcoran Group in Delray Beach, Florida. “The market hasn’t crashed, and you don’t want to offend the seller. It’s OK to be a bit lower than the asking price, but it depends on how long it’s been on the market and local recent sales. One buyer recently offered 35% less for a house and lost his chances for any future negotiations.”

An offer of 10% off the list price could be too low depending on the market, he says.

2. Require a home inspection and request repairs

Unless a home is listed “as-is,” which means the sellers won’t fix anything, you should ask for necessary repairs that show up on a home inspection.

“Understand there’s a difference between home improvements and repairs,” says Curt Anderson, a real estate agent with Century 21 Judge Fite Co. in Flower Mound, Texas. “Provide an inspection report and only ask for something to be fixed if it’s broken. If it’s working, you shouldn’t ask the sellers to do something even if it’s recommended such as add more insulation or upgrade the air conditioning.”

If you do need to ask for a big-ticket item such as a roof, make sure you get an estimate from a contractor, Anderson says.

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3. Ask the seller to chip in

One way to soften the blow of still high home prices and mortgage rates is asking the seller for money.

For example, you can ask the seller to buy down your interest rate for the first two years of your loan, which costs the seller about 1% or 2% of the home price. “That’s cheaper for the seller than a big price reduction and makes a big difference” to the buyer’s monthly payment, says Jody Eichenblatt, a lender with Prosperity Home Mortgage in Alexandria, Virginia.

Closing cost help can be used to free up cash so that buyers can make a bigger down payment or keep more savings in reserve.

“It’s still a seller’s market in many places, so buyers should carefully present their offer to a seller and sweeten the deal even when they ask for a concession,” says Zieman. “In other words, don’t make a lowball offer and ask for closing costs.”

4. Request furniture, appliances — or a car

Negotiating for furniture, outdoor play equipment or even appliances never really disappeared even at the height of the seller’s market, says Anderson. While appliances that are built-in typically stay, in some markets sellers may move things like a refrigerator to their next house.

“Buyers can ask politely about items they would like to have and often sellers are happy not to have to move them,” says Zieman. “Really, everything is negotiable, and you could be doing the sellers a favor.”

This is especially true for estate sales and vacation homes.

“At one property the buyers asked what the sellers planned to do with the car in the garage of an otherwise empty house, and it turned out they wanted to sell it,” says Zieman. “So, the car became part of a package deal because the buyers wanted to keep one at the vacation home.”

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5. Make your offer contingent on the sale of your home

While it’s not common, Eichenblatt says he’s seen several transactions in recent months that are contingent on the buyer selling their current home.

In a seller’s market such as most have been in recent years, this contingency is pretty much nonexistent. Typically, the contingency will still include a time limit for the sale, so sellers don’t keep their house off the market indefinitely waiting for the buyers to complete their own transaction.

“I’m not seeing an overwhelming number, but previously I hadn’t seen an offer contingent on a home sale for years,” Lacopo says.

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