Knowing When to Walk Away: Negotiating a House Price With a Stubborn Seller

By: Craig Berry Reviewed By: Paul Centopani
June 28, 2023 - 7 min read

The negotiating table

For some people, negotiating price is fun. It can be thrilling to win a negotiation and feel like you’ve gotten a good deal.

For everyone else, the idea of negotiating is stressful if not sickening. This is especially true when you’re negotiating a big-ticket item such as a house and can be compounded when emotions are running high over a particular home.

What if you’re dealing with a stubborn seller? When is it time to walk away from a deal and beyond negotiations?

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Should you negotiate a house price?

When you buy a house, the sales price is generally considered negotiable and flexible.

This means would-be home buyers should, along with the help of a real estate professional, do their research to ensure they do everything in their power to reduce the price of their new house.

The better price you can negotiate, the lower your out-of-pocket expenses. A lower home price also means a lower loan amount. A reduced loan amount means a smaller monthly mortgage payment.

And, don’t forget another important feature that comes with a lower sales price: more home equity.

Tips for how to negotiate house price

There are a number of methods for negotiating the price of a home.

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Determine whether you’re in a buyer’s or seller’s market.

The local market condition is the single-most important consideration in negotiation strategy. Markets vary depending on the city, as well as the neighborhood.

Your agent should know the neighborhood well. He or she should be able to tell you if you’re in a buyer’s market, a seller’s market, or perhaps a balanced market.

Get a home inspection.

Home buyers should always consider having a home inspection. Home inspections can uncover minor cosmetic repairs, dangerous hazards in the home, and everything in between.

It’s important for buyers to know, however, that in a hot seller’s market, your offer could be beat out by another “cleaner” offer that has no home inspection contingencies. After consulting with your real estate agent, should you decide on a home inspection contingency, this can be a strong negotiating tool.

Sometimes, a home inspection will find items that could turn into costly repairs needed addressed soon after buying the home.

Not only can repair items mean lots of money from your pocket, sometimes, this is when the negotiating power swings to your side. A good agent can bring a ton of value here, helping with advice on whether everyone needs to head back to the negotiating table, or even walk away from the deal.

Work with a trusted real estate agent.

A good local real estate agent will know the local market. They have access to housing data that’s only available to licensed agents.

Your agent can provide a comparative market analysis (CMA). A CMA shows what similar homes (aka “comps”) are selling for, how long it took them to sell, and how close the final sales price was to the original asking price.

Ask for seller-paid closing costs.

Besides negotiating the price of a home, you can also negotiate other facets of the deal. Almost anything is up for negotiation when it comes to buying a house, not just repairs and renovations.

Seller concessions, also known as seller contributions, are closing costs paid for by the seller. Although more common in a buyer’s market, seller paid closing costs, in part or full, can be a way to save out-of-pocket expense when buying a home.

Have your finances in order.

Prior to getting into any type of negotiations, you’ll need to know your bottom line. The state of your finances could mean you have more room to negotiate, or less room.

The single-best way to get a better understanding on where you have financial wiggle room is by getting pre-approved. A mortgage preapproval letter will also show the seller you’re a serious buyer with the resources to purchase their home.

Find out why the seller is moving.

Understanding the seller’s motivations can be extremely helpful when it comes to the negotiation process.

The seller’s biggest sticking point may have nothing to do with price. They may just want to know that whoever is buying their home will care for it as much as they cared for it the past 20 years.

When a seller seems difficult because they aren’t willing to budge on their asking price, knowing why can help you and your agent create a plan that appeals to their needs.

Negotiation strategies in home buying

You can follow a number of creative strategies for negotiating a lower home price. Here are three helpful techniques.

  1. Present your offer in a way that is appealing to the seller

Home buying success begins with making a strong offer. A lot of this has to do with what the seller considers a strong offer. (Hint: it may be much different than your opinion of a strong offer.)

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Understanding how the home offer process works can result in yours being the winning offer. Speak with your agent about how the process works, including the timelines on offers or counteroffers.

  1. Make your offer look stronger by adding extras

Putting together the right offer in the right way is an important aspect to getting the best price on your home. Speak with your real estate agent about what you want to offer and ways you may be able to sweeten the deal.

Can you offer a shorter closing timeframe? Are you willing to waive certain contingencies on the offer? A bigger down payment or larger earnest money deposit could make your offer stronger.

Making a slightly more attractive offer based on the seller’s wants and needs could mean your offer being accepted over ones with larger sale prices.

  1. Handling counteroffers and concessions

If the seller doesn’t like your initial offer, they may reject it altogether, or they may make a counteroffer.

When counteroffers are made, it could be for one reason or multiple reasons. These may include:

  • Sales price
  • Closing date
  • Earnest money deposit amount
  • Contingency items
  • Seller concessions

Get with your agent to create a game plan. Anticipating all of the possible counteroffer items, and knowing where you’re willing to budge, can keep the process moving along and with less surprise and/or frustration.

When should you walk away from the house?

Sometimes, regardless of what you offer or how your offer is presented, the seller won’t budge. If your “must-haves” are going by the wayside and there’s no sign of a middle ground, the smartest thing may be to just walk away.

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Seller isn't interested in negotiating.

Sometimes, regardless of the offer you submit, or how it’s presented, a seller just isn’t interested in negotiating. If you interpret their words or actions as coming across in more of a take it or leave it style, that leaves you being forced to compromise in non-negotiable areas, you may be spinning your wheels on this one.

Inspection uncovers an extensive list of repairs.

Certain home inspection items will be minor. Others may not only be major, they could be costly. A bad house foundation or widespread mold issues aren’t areas you’ll want to deal with after moving into your new home.

Your agent can be a great asset in helping you decide which home inspections may be deal-breakers.

Home appraises for lower value than the asking price.

Sometimes, especially in rapidly changing markets, the appraised value comes in lower than the contracted price. When this happens, there are basically three options:

  1. Buyer can bring the difference to the closing table.
  2. Seller can lower the purchase price to match the appraised value.
  3. Buyer and seller can split the difference.

Sometimes the appraised value comes back drastically lower than the purchase price. If the seller isn’t willing to come down on the price or increase seller concessions, regardless of whether you cover the difference, it might be time to reevaluate how bad you want that particular home.

Title comes into question.

The term “clean title” means there are no liens, boundary disputes, easements or other issues that may jeopardize ownership.

Not only can title issues be a nightmare, they can take years and sometimes thousands of dollars to resolve. Title insurance may resolve most issues, but be aware of the significance of a title that isn’t clear.

The bottom line

Buying a home can be stressful. Trying to negotiate with a seller that won’t budge can make it even more so.

Knowing when to walk away from a house negotiation can save you time, money, and a ton of stress. The tough part can be knowing when to negotiate, and when to pull the plug and move on to the next house.

While walking away could be the best decision in some cases, in others, you may still be able to win the negotiations and close the deal by using some of the creative tactics mentioned here.

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Negotiating house price FAQ

Can you negotiate on asking price when buying a home?

As a buyer, negotiating the asking price can be the best way for you to get the lowest price on a home. Negotiating the price can help you reduce your loan amount, lowering the amount you’ll pay over at the time of purchase, as well as over time.

What seller concessions should I ask for when negotiating?

Depending on the location you’re buying a home, as well as the type of loan program, the amount of concessions that can be paid for by the seller will vary. Typically, the type of concessions buyers request help with include covering some, or all the closing costs.

What is considered a lowball offer?

The definition of lowball offer will depend largely on the area where the home is located, and the current state of the market. Submitting an offer that is 5%-to-10% below list price in a hot seller’s market like Charlotte, NC could be insulting to a seller. Whereas making the same offer in Flint, MI could be the perfect start towards negotiating a better price. A good real estate agent will be your biggest ally for advice on the right offer amount.

Should you ever offer asking price on a home?

How much you should offer on a house will depend on the market you’re in, the home’s list price, how long it’s been on the market, and a number of other factors. Making an offer below asking price in a seller’s market where inventory is low could mean you losing the home. Your agent is likely to recommend an offer at asking price, if not above asking price.

Craig Berry
Authored By: Craig Berry
The Mortgage Reports contributor
With over 20 years in mortgage banking, Craig Berry has helped thousands achieve their homeownership goals.
Paul Centopani
Reviewed By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.