6 Things to Negotiate When Buying a House

Even though there are some scattered signs that the housing market is picking up, in most areas, it is still very much a buyer’s market. That means that you have some pull when it comes to buying a house. So, if you have low credit card debt, a good credit score, a decent down payment, and a stable job, now is a good time to go house hunting. You’ll get a better interest rate, and you will be able to negotiate with the seller to help you save a little more money.

curb appeal

Photo by MichiganMoves via Flickr

Here are 6 things you can negotiate when buying a house:


Every home has to have an inspection. In most cases, major problems that makes the home less habitable have to be repaired by the seller, including heating, air conditioning, wiring, plumbing and structural issues. The exception is when the seller is offering the house “as is.” Even so, you can still negotiate for repairs. Once the home inspection points out the necessary changes that need to be made, negotiate repairs, or negotiate an allowance for repairs.

Paint and flooring allowances

If the flooring looks bad, and the paint is chipped and peeling, you can negotiate allowances for these items. Many sellers will knock off a few thousand dollars (usually between $3,000 and $10,000, depending on the degree of damage) to allow for the fact that you will need to re-paint or re-floor. You might also be able to negotiate that the seller arranges for and pays for paint and flooring before you move in, rather than just providing an allowance.

Finished basement or remodeling

When my husband and I bought our house while it was under construction, it was originally supposed to come with an unfinished basement. We negotiated to have the basement finished with the same materials as used for the upstairs. (We also negotiated to have the air conditioning installed.) Now, we have a finished downstairs, professionally built, rather than having done it ourselves. You can negotiate allowances for finishing the basement or remodeling a portion of the home that just isn’t very attractive. In some cases, you might not be able to get the full amount, but you can maybe negotiate to split the cost.

Closing date

You can speed up or slow down the closing date. If you need to get into the house quickly, you can negotiate a faster closing date. If the seller can’t get out, you might be able to negotiate an allowance for the storage of your stuff, or a place for you to live. If you need more time, you might be able to arrange that as well. You can suggest that you rent the home for a few months in order to save for a bigger down payment. As long as the mortgage is getting paid, the seller might not mind.


If you want to reduce the amount of money you pay in interest, you can pay points. Each point you pay is equal to 1% of the loan amount. In most cases, each point will reduce your interest rate by 1/8 of a percentage point. You can lower your interest rate by asking the seller to pay points on your mortgage.

Bonus: seller-paid points are actually tax-deductible for you.

Closing costs

It’s pretty standard for sellers to pay closing costs, especially if you are a first time home buyer. However, you can negotiate to have the seller pay closing costs even when you are moving up. It might be more difficult, but in a buyer’s market, with sellers looking to do what they can, there is chance that you can get your closing costs paid for.

If you are careful to consider what you can negotiate for, it is possible that you will be able to lower the overall costs associated with buying a home, saving you money and letting you use that extra breathing space in your budget for other things.

About the Author

By , on Apr 27, 2010
Miranda Marquit
Miranda is a professional personal finance journalist. She is a contributor for several personal finance web sites. Her work has been mentioned in and linked to from, USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, The Wall Street Journal, and other publications. She also has her own personal finance blog: Planting Money Seeds.

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Leave Your Comment (6 Comments)

  1. Tood B says:

    Don’t be afraid to ‘insult’ the seller with a low offer. Your agent will try to talk you out of going more than 5% lower than the sticker price. The more you pay for the house, the more they make. I have a good friend who offered 15% less than asking. Her agent said, I won’t present such an insulting offer. My friend replied with, if you don’t, I’ll find someone who will. The offer was accepted, no counter. Awesome. An offer is nothing but a piece of paper and a 1 to 2 day wait. What’s to loose?

  2. Great article… its also smart to sign the contract and not ask the bank or seller to lower the price until you do an inspection. This way, they will not think its reasonable to find another offer and probably lower their price a few thousand to satisfy your demands.

  3. Miranda says:

    KT: This is just when looking at the house. Location is important, and you should consider it overall when looking at the house. You could do a price negotiation, based on how much other homes in the neighborhood are selling for, as well as whether or not there have been many foreclosures in the area.

    J.M.: You are right; you can negotiate price 🙂 It seemed a little too obvious to put in, but it certainly does warrant a mention, and I probably should have included it.

    James: A fixed rate mortgage can certainly be a good choice — at least it helps with the long-term planning, so you don’t have to worry about your housing payment changing.

  4. James says:

    these are all great tips, for seasoned home owners or newbies. just make sure once you have done all your negotiations you have some sort of fixed rate mortgage so you can enjoy the house for many years to come.

  5. Jersey Mom says:

    And the price. When we bought our current house in November 2008, we offered $20k less than what the sellers were asking for; they agreed w/o even a counteroffer.

  6. kt says:

    what about the security situation of the neighbourhood? how does this factor in or are you just looking at the house itself?

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