A seller’s market has dominated most areas of the U.S. for the past few years, with available homes speeding from “for sale” to “sold.” The situation frustrated some home buyers competing with multiple offers. However, that situation may be easing up. Inventory grew for the 19th straight month in May 2025, and new listings increased across every major region, according to housing data from Realtor.com. Market changes call for buyers to brush up on how to negotiate home price and other expenses and conditions related to the sale.
Home buyers should be strategic and not discouraged, says Nadia Evangelou, senior economist and director of real estate research for the National Association of REALTORS®. “There is more room for negotiation now than there was a year or two ago.”
Work With a Real Estate Agent to Negotiate
When you’re making an offer on a home, you want your offer to be the most attractive one the seller has received but also a good deal for you. You may think negotiation is limited to price, but experts say otherwise. “Everything is negotiable when it comes to buying a home,” Says Charlotte Roberge, broker owner of Laguna Creek Real Estate in Springfield, Ohio, and Accredited Buyer’s Representative, a designation awarded to real estate agents who have completed specialized training in representing buyers during the home-buying process. She was inducted into the ABR® Hall of Fame in 2024.
Partner with someone who not only knows the market well but has completed a certain number of transactions. Their sales volume will indicate their experience, says Scott Varley, president of the Varley team at Keller Williams, Saratoga Springs, N.Y. NAR data shows that real estate agents surveyed completed a median of 10 residential transactions in 2024. The median number per year has ranged from 10 to 12 over the past 10 years.
Forty percent of buyers found their agent through a friend, neighbor, or relative, according to the NAR 2024 “Profile of Home Buyers and Sellers.” This trend was especially strong among first-time buyers; 51% relied on referrals from their personal network. In addition, get references from other home buyers and evaluate online reviews and video testimonials, suggests Ryan Fitzgerald, owner of Raleigh Realty in North Carolina.
Your agent will want to know specifics like your cash flow, whether you can pay closing costs, whether you’re capable of making or funding repairs, and whether you’ll want an inspection, Fitzgerald says. By being forthright, you’ll arm your agent for negotiations with the seller’s agent.
How to Negotiate Along the Buying Journey
As you advance in the home buying process, “you’re also negotiating when you write your offer and then again when your agent presents your offer to the other agent,” says Roberge. She says she connects with the seller’s agent to understand what the seller wants and whether competing offers are in play. If there are no competing offers, she and the buyer ask for more than they would otherwise and later withdraw lower-priority requests if needed. “Ultimately, we try to find a happy medium between the buyer and the seller.”
You and your agent may negotiate with the seller and their agent in these eight areas:
Negotiation Area 1: Closing Date Flexibility
Roberge recently had a contract that stated the seller wanted to remain in their home for 45 days after closing. This practice isn’t allowed everywhere; typically the buyer gets the keys at closing. However, the buyers were able to accommodate the request, and the seller accepted their offer, which was lower than a competing offer.
Negotiation Area 2: Type of Financing
Your lender will preapprove you for the best loan possible for your situation. For many first-time home buyers, that means a government-backed loan like an FHA or VA loan. “Some sellers are concerned that government-backed loans have criteria their home may not meet, Roberge says. If you qualify for a conventional loan, that may help you negotiate a home price.
Negotiation Area 3: Preference for Cash
Given two similar offers, a seller is likely to go with a cash offer, even if it’s lower. “Typically with a cash offer, there are no financing of appraisal contingencies, Roberge says. “So, unless they find something wrong during the inspection, the deal’s going to close, because the buyer has the cash.”
Negotiation Area 4: Closing Costs
Often, the seller will pay the closing costs, typically 2% to 5% of the purchase price. These closing items can include loan, legal, and title costs, such as recording fees to transfer the title, fees to research the title, insurance, and attorney fees. Both buyer and seller incur closing costs. If the sellers want to move quickly or otherwise make their property more attractive to more buyers, they may be open to paying the buyer’s portion of the costs. This will lower the amount of cash you need at closing.
There is a caveat, though. If a house is listed for $100,000 and you ask the seller to pay, for example, $3,000 in closing costs, the seller’s net payment would be lower than $97,000 because of other costs like compensation. To enhance your offer, you could pay closing costs out of pocket. But many buyers don’t have those extra funds available. You could then offer the seller $103,000 and include the $3,000 in your mortgage, but you’d need to consider related factors. For example, would the home appraise for the higher amount and would you pay interest on the $3,000 over the life of the loan, which would increase your monthly payments. It’s best to speak to a loan officer to understand the implications of these options.
Negotiation Area 5: Earnest Money
The more money you deposit upfront, the more likely the seller is to recognize that you’re truly interested in closing the deal. An earnest money deposit is usually at least 1% to 3% of the sale price and is applied to the final price. The seller receives the earnest money deposit at closing or according to the terms of the agreement, not as an upfront payment.
Negotiation Area 6: Inspections
If a seller has competing offers, they may go with one that waives the inspection. However, as the buyer, you should weigh the risk in omitting an inspection. “I let buyers know that forgoing an inspection is an option, but I would never encourage them to do that, especially if they’re first-time home buyers,” Roberge says. If you’re a contractor or have access to a professional who can help you look over the house, you might consider an as-is purchase, she adds. “But spend as much time in the house as you can before writing an offer.”
Also, keep in mind that you can omit certain items from inspection. If the roof and HVAC systems have recently been replaced, you might not have those inspected. But Roberge points out that in her market, termite and septic inspections are important. “Issues with those can cost many thousands of dollars.” Check with your real estate agent about common home problems in your market.
Negotiation Area 7: Buyer’s Agent Compensation
As a buyer, you will be able to negotiate the compensation you pay for a real estate agent’s work when you begin the relationship. The agent you work with must enter into a written agreement with you before you tour a home, either in person or virtually. The agreement must specify the amount or rate of compensation an agent or broker will receive and how this amount will be determined. The compensation can be paid by sources including a fixed-fee amount paid directly by the buyer, concessions from the seller, or a portion of the listing broker’s compensation.
Negotiation Area 8: Home Warranty
A home warranty is an insurance policy to help cover all or part of the cost to replace or repair the items. (It isn’t homeowners insurance.) You can ask the seller to provide a home warranty or purchase one yourself, which may put your offer in a better light. A home warranty will run you about $1,049 per year on average, according to Angi.
Legal Protections for Home Purchases
If you’re nervous about negotiating a home price and other expenses, even with a real estate agent by your side, know that most states have some protections. In New York, for instance, all contracts include an “attorney review clause.” This gives your attorney time to review the contract until a stated deadline, usually about three days, and approve, disapprove, or modify the document. “It’s a safety net for the buyer,” Varley says. “During this time, if you’re uncomfortable and decide you don’t want to move forward with the purchase, you can back out with no repercussions.”
Only once you’ve signed a contract, which makes your home purchase legally binding, can you feel more secure about the house being yours. The contract can be terminated only under specific conditions that you and your real estate agent may have included in the agreement. These home buying contingencies may have to do with inspections, appraisals, or financing. For example, an appraisal contingency protects the buyer if a home’s appraised value is lower than the purchase price. You may have a contingency in your offer if you discover a significant repair issue. You can “add any contingency you want in your contract as long as the seller is willing to sign it,” Varley says.
Home buyers are starting to see emerging opportunity in the housing market, such as more inventory and new listings. Prepare to negotiate home prices and enlist the help of a qualified real estate agent, and you can make the most of the market.