Buying a home doesn’t have to mean paying the full asking price. With the right approach, you can save thousands of dollars and still land the keys to your dream home. Here’s how to negotiate like a pro while keeping your budget intact.

Know Your Market Position First

Before you start making offers, you need to understand what kind of market you’re walking into. In a competitive seller’s market you may not be able to negotiate at all, but there’s still room to work if you know what you’re doing.

Check how long homes in your target area have been sitting on the market. Consider how long a particular property has been on the market; if it’s been more than a few weeks, you may be able to negotiate a better price. Properties that have been listed for over 30 days often signal motivated sellers.

Look up recent sales data for similar homes in the neighborhood. For example, Redfin data shows that homes in Rochester, New York sold for more than 115 percent of the list price in April 2025, while homes sold for 97.5 percent of list price in Austin, Texas, leaving more room for negotiation.

Get Your Financial House in Order

Nothing kills your negotiating power faster than financial uncertainty. Make sure you get a preapproval before you start shopping for a home. This mortgage preapproval letter shows sellers you’re serious and can actually close the deal.

Here’s a smart move: if you are preapproved for a mortgage that is greater than your offer price, don’t tip your hand; instead, ask your lender to tailor the preapproval letter to the amount you are offering. Why show your full budget when you don’t have to?

Start Smart with Your Initial Offer

The opening move sets the tone for everything that follows. When you are making an offer on a house, a good rule of thumb is to offer 5% to 10% lower than the asking price. Most sellers price their homes expecting some negotiation.

However, don’t go overboard. Avoid making a very low initial offer — you risk offending the seller. A lowball offer can shut down negotiations before they even start, especially if the seller has emotional attachment to the property.

Research Your Comparable Sales

Start by looking at comparable sales in the area. These should be homes that have been on the market for the same amount of time. Your real estate agent can provide a comparative market analysis (CMA) showing recent sale prices, time on market, and how close final prices came to asking prices.

Use Home Inspections as Leverage

The home inspection is your golden opportunity to renegotiate. Once you’re under contract, the inspection often reveals issues that weren’t obvious during your initial walkthrough. Inspection results can be the key to negotiating a home’s final selling price.

You’ve got several options when problems surface:

• Request specific repairs before closing
• Ask for a price reduction to cover repair costs yourself
• Negotiate closing cost credits equivalent to estimated repair expenses
• Walk away if the seller won’t budge on major issues

Think Beyond the Purchase Price

Smart negotiation isn’t just about the sticker price. Sellers often resist lowering their sale price but may be willing to negotiate in other ways. Here are some valuable alternatives to consider:

Closing Cost Help: For example, closing on a $150,000 loan means you can expect to pay $4,500 – $9,000 in closing costs. Getting the seller to cover even half of these expenses puts real money back in your pocket.

Interest Rate Buydowns: In some situations, sellers might pay points to reduce your mortgage rate, which saves you money over the entire loan term.

Included Items: Ask the seller to throw in appliances, furniture, or outdoor equipment they might otherwise take with them.

Flexible Timing: Offering flexibility on the closing date or move-in timeline can sometimes win you a better deal, especially if the seller needs extra time to find their next home.

Know When to Walk Away

Don’t let your fear of missing out cloud your judgment. As financial advisor Sanel Duranovic from Schwab explains, “If a deal doesn’t meet your needs, it’s probably better to move on. In fact, your willingness to walk might make the seller more open to negotiations.”

Having backup options keeps you from getting desperate. If you’ve found three potential homes instead of falling in love with just one, you’ll negotiate from a position of strength rather than desperation.

Work With a Pro

Your real estate agent will be an invaluable asset. Your agent can assess the local market and talk to the seller or the seller’s agent, allowing you to get a more intimate look at how willing the seller is to negotiate the sales price.

A good agent acts as an emotional buffer and brings professional negotiation skills to the table. They know which tactics work in your local market and can help you avoid common mistakes that torpedo deals.

Final Negotiation Tips

Keep emotions in check during negotiations. Both buyers and sellers are at risk of making some of the common slip-ups that can cause negotiations to end abruptly, sometimes unnecessarily. don’t criticize the seller’s taste by, say, pointing out that the kitchen decor isn’t to your liking.

Remember that buying a home is a business transaction, not a personal battle. Stay focused on getting a fair deal that works for your budget and timeline. With preparation, patience, and the right approach, you can negotiate your way to significant savings on your home purchase.

Looking for help with down payment funds? Many states offer first-time homebuyer assistance programs that can provide grants or low-interest loans. For example, California’s MyHome program offers up to 3% of the purchase price for down payment assistance, while North Carolina provides up to $15,000 in forgivable down payment help.