Concession Conundrum – How Much to Ask For?
Published On: April 14, 2025 Posted by: Jeremy Peterson
When tendering an offer to a seller, buyers often struggle with the questions of concessions. How much do they ask for? Why kind of concessions are possible?
There are several things a buyer has to consider when answering these questions. First, are they in a buyer’s market or a seller’s market? Or in the middle? The answer to this will determine the degree of what can be requested as well as the likelihood of a sellers acceptance of the request.
Another factor that needs to be considered is the seller’s perspective of the bottom line. A seller may advertise a price, but out of that price comes listing commission expenses, title insurance fees, and property tax prorations. A buyer’s request for closing costs, prepaid items, repairs, or a home warranty all become additional costs to the seller and affect their bottom line. A buyer should always hope for, but never expect, a seller to pay for these items. The likelihood of success depends on the seller’s motivation and how closely all of these figures come to the seller’s expectations.
While buyers and sellers freely negotiating is an ideal market scenario, there is another constraint, perhaps the biggest constraint, to buyer’s negotiating leverage…the constraint of lender restrictions. These restrictions come in many shapes and sizes and create the framework for buyers and sellers to negotiate the majority of concessions.
Rather than bore you with esoteric loan parameters and lender lingo, my friend Ron Pippin at Strategic Mortgage here in Ogden has put together this great chart breaking down the possibilities for a majority of loan scenarios.
If you are thinking of purchasing a home and want to explore your options, give me a call at 801-390-1480.
