The Negotiation Dance: Top 5 Concessions Buyers Ask For

Buying a home is rarely a straightforward transaction. It’s a negotiation dance, a delicate balance of give and take between buyer and seller. One crucial aspect of this dance is the art of concessions. Buyers, eager to secure their dream home on favorable terms, often request concessions from sellers. Understanding these common requests can empower you as a buyer (or seller!) to navigate the negotiation process with confidence. Here are the top 5 concessions buyers frequently ask for:

1. Closing Cost Assistance:

Perhaps the most common concession, buyers often request sellers to contribute towards closing costs. These costs, which encompass various fees like title insurance, appraisal fees, and lender fees, can add up to a significant sum. For first-time buyers or those with limited funds, closing cost assistance can be a game-changer.

• Why it’s requested: Reduces the buyer’s upfront expenses, making the purchase more affordable.
• How it works: The seller agrees to credit a specific amount towards the buyer’s closing costs, effectively reducing the amount the buyer needs to bring to the closing table.
• Market impact: In a buyer’s market, sellers are more likely to agree to this concession. In a seller’s market, buyers may need to offer a higher purchase price to offset the concession.

2. Repairs and Credits for Defects:

During the home inspection, potential issues may surface. Buyers often request sellers to address these defects or provide credits for repairs. This ensures the property is in good condition and reduces the buyer’s post-closing expenses.

• Why it’s requested: Protects the buyer from inheriting costly repairs and ensures the property meets their standards.
• How it works: The buyer presents the inspection report to the seller, outlining the identified defects. The seller can either agree to make the repairs themselves or offer a credit at closing to cover the cost.
• Negotiation points: The extent of the repairs and the amount of the credit are often subject to negotiation. Minor cosmetic issues may be overlooked, while major structural or safety concerns are more likely to be addressed.

3. Home Warranty:

A home warranty provides coverage for major appliances and systems, such as HVAC, plumbing, and electrical. Buyers often request sellers to provide a home warranty as a form of protection against unexpected breakdowns.

• Why it’s requested: Offers peace of mind and protection against unexpected repair costs during the initial period of homeownership.
• How it works: The seller purchases a home warranty policy, which typically covers a one-year period.
• Benefits: Reduces the buyer’s financial risk and provides a sense of security.

4. Inclusion of Personal Property:

Sometimes, buyers request sellers to include certain personal property items, such as appliances, furniture, or fixtures, as part of the sale. This can be particularly appealing if the buyer is moving from a smaller home or needs to furnish a larger space.

• Why it’s requested: Saves the buyer the cost and hassle of purchasing new items.
• How it works: The buyer specifies the desired items in the purchase agreement.
• Common items: Appliances (refrigerator, washer, dryer), window treatments, and light fixtures.

5. Extended Closing Date or Rent-Back Agreement:

Buyers may request an extended closing date to accommodate their moving schedule or financial circumstances. Alternatively, they may request a rent-back agreement, allowing them to occupy the property after closing for a specified period.

• Why it’s requested: Provides flexibility and accommodates the buyer’s needs.
• How it works: The buyer and seller agree on a revised closing date or a rent-back agreement, outlining the terms and conditions.
• Situations: Extended closing dates are common when buyers need more time to secure financing or sell their existing home. Rent-back agreements are often used when sellers need time to move out.

Navigating Concessions:

Understanding these common buyer concessions is essential for both buyers and sellers. Buyers can use this knowledge to craft effective negotiation strategies, while sellers can anticipate potential requests and prepare accordingly.

• For buyers: Prioritize your concessions and be prepared to negotiate. Focus on the most important items and be willing to compromise on less critical ones.
• For sellers: Be prepared to consider reasonable concessions, especially in a buyer’s market. However, don’t be afraid to counteroffer or decline requests that don’t align with your goals.

The negotiation process is a crucial part of any real estate transaction. By understanding the top concessions buyers request, you can navigate this process with greater confidence and achieve a successful outcome. Call me for your next home purchase and I’ll try and get you all the concessions you want. Thank you. Angelo