10 Things to Negotiate When Buying a House

Advertiser Disclosure: We may be compensated by advertising and affiliate programs. See full disclosure below.

When it comes to buying a house, there are many things that you, as a Buyer, can negotiate with the Seller. How much you can negotiate depends mostly on the market condition, other buyers competing for the same property, and the Seller’s willingness to sell the house. Here are six things you can negotiate when buying a house.

10 Things to Negotiate When Buying a House 2

Disclosure: Information provided below are strictly from my experience as a Realtor in Virginia and Maryland, other areas may be different (so talk to your Realtor).

1. Sales Price

The most obvious one is the Sales Price. The Seller list the house for sale as a price (i.e., List Price, or Asking Price). You, or your Realtor, will determine the fair market value of the house based on comparable sales in the area. Then it is your job to decide how much you want to offer the Seller. For example, you have to offer more if the market or competition is not in your favor and less if conditions are in your favor.

2. Seller’s Subsidy

When you buy a house, your Closing Costs will be roughly 3% of the Purchase Price. You can ask the Seller to give you a credit equal to a maximum of 3% for a Primary Residence, and 2% for an Investment Property. Some loans do allow more than 3% Seller’s Subsidy, be sure to ask your Loan Officer about this.

3. Closing Date

Most Seller will want you to close as soon as possible, but you should always ask because some Seller prefers a later closing date. Typically, a real estate transaction will close in 30-45 days, but a later closing date might be desirable for you for several reasons, e.g.,

  • Your lease still has not expired. In this case, a later closing date could save you some money by not having to pay for both your rental and your new home.
  • You want to delay your first payment. You don’t have to pay your first mortgage payment the first month. For example, if you close any time in June, your first payment doesn’t start until August. So you could delay your payment by closing in early July (and therefore don’t have to make your first payment until September).

4. Inspection and Repairs

There are several things you can do with inspection and repairs, and your specific situation will dictate which choice is best or available to you:

  • No Inspection – Some auction sales do not allow the Buyer to do a home inspection, and the Buyer also has an option to do no inspection. As a Realtor, I do not recommend this ever.
  • Pre-Inspection with No Repairs – In a very competitive situation, you might have to do your home inspection before putting in your offer. This does occasionally happen if the market is very hot.
  • Inspection with No Repairs (As-Is Sale) – This is a practical option when the market is very competitive. Buyers that accept the house as-is will have an advantage over Buyers that want to negotiate for repairs. Also, this is typically the most a Buyer can ask for when purchasing an REO (Real Estate Owned), Short Sales, and As-Is Sales.
  • Inspection with Repairs – This is the standard option with the market is neutral or favoring Buyers. You can do your inspection after the contract is accepted and go back to the Seller to negotiate for repairs, a lower Sales Price, or more Seller’s Subsidy.

You might consider doing additional inspections to give you greater peace of mind and negotiating power if the market is in your favor. These inspections may include Roof Inspection, Chimney Inspection, Foundation Inspection, Radon Testing, etc.

5. Contingencies

Besides home inspection, the two most common contingencies are Appraisal Contingency and Financing Contingency. Usually, the only point to negotiate is how long the Buyer has to remove these contingencies.

In a Seller’s market, the Seller could ask the Buyer to remove the Appraisal Contingency (not recommended) or pay some amount if the appraisal comes in below the sales price. For example, the Buyer might agree to pay up to $5,000 to cover the difference in appraised value and sales price.

6. Home Warranty

In Virginia and Maryland, the Buyer can ask the Seller to pay a reasonable amount toward a Home Warranty plan, for example, $500-750 is a typical amount. A Home Warranty is provided by a third-party company that protects the Buyer when something breaks, e.g., appliances, plumbing, HVAC, water heater, etc. The coverage period is typically one year, and the Buyer only pays a trade fee (usually $75-$100) for each repair.

7. Pre and Post Settlement Occupancy

Depending on the Closing Date and the party involved, the Buyer and Seller could negotiate Occupancy Date that is independent of the Closing Date. For example:

  • Pre-Settlement Occupancy. If you as the Buyer have to move into the house before the Closing Date, you could negotiate for a Pre-Settlement Occupancy. However, this is very uncommon since it is risky for the Seller.
  • Post-Settlement Occupancy (or “Rent Back). This is more common of the two where the Seller negotiates with the Buyer to stay in the house after the Closing Date (essentially becoming a Tenant). This is typically done to allow the Seller to find a new place to live. Lenders will allow up to a maximum of 60 days, and the parties can negotiate on the amount of rent and deposit that the Seller will pay for the rent back.

8. Allowance for Non-Inspection Repairs

Besides inspection repairs, you might be able to make an offer subject to certain conditions being met. For example, if the carpet or the paint is in bad shape, you might be able to negotiate upfront with the Seller to install new carpet or repaint the property.

9. Appliances

In Virginia and Maryland, appliances general convey with the property (this might not be true in all jurisdictions). However, new construction homes and flipped homes generally do not come with a Washer and Dryer. Depending on the situation, you could ask the Seller to pay for and install the missing appliances before closing.

10. Taxes

In Virginia, home builders often put in their contract for the Buyer to pay taxes that otherwise would be paid by the Seller in a standard transaction. In Maryland, certain taxes are negotiable and can be paid all by the Seller, all by the Buyer, or split as agreed.

Depending on the situation, you could look into taxes for additional items to negotiate.

Bottom Line

If you carefully consider what you can negotiate for, you may be able to lower the overall costs associated with buying a home. This saves you money and lets you use that extra breathing space in your budget for other things.

Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Most Voted
Newest Oldest
Inline Feedbacks
View all comments
13 years ago

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.

Smarter Spend
13 years ago

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.

Tood B
Tood B
13 years ago

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?

Mindy Jollie
4 years ago

Those tips about inspection and repairs are helpful in terms of buying a house. My sister is looking into buying a house and doesn’t always know how to handle the tricky parts of the deal. She’ll probably have to work with a realtor who can handle the negotiation parts.

10 Things to Negotiate When Buying a House

by Pinyo Bhulipongsanon time to read: 4 min
Would love your thoughts, please comment.x