Key Takeaways
- About 44% of U.S. home-sale transactions in the first quarter involved home sellers giving buyers concessions, close to the record set in early 2023, according to a new Redfin report.
- As the housing market starts to favor buyers, they have more options to choose from and more negotiating power, the real estate firm said Monday.
- Seattle recorded the highest rate of concessions during the first quarter, while the New York metro area posted the lowest.
More home sellers are giving buyers concessions, according to a new report.
About 44% of U.S. home-sale transactions in the first quarter involved concessions, according to a Redfin report, up from less than 40% a year ago and slightly below the record high of just over 45% seen at the start of 2023. Experts say more concessions are a signal that the market is moving in favor of buyers.
Concessions are agreements between a buyer and a seller to adjust the price or other terms of the sale based on a new condition, such as a home inspection that reveals the need for costly repairs. While home prices, elevated mortgage rates, and economic uncertainty are weighing on the housing market, sellers are also facing more competition with listings at a five-year high, according to Redfin. More competition can mean more negotiating power for home shoppers.
“Buyers used to ask for concessions to cover little things like repairs,” said Chaley McVay, a Redfin agent in Portland, Ore., in a press release. “Now they’re negotiating concessions so they can afford to buy a home.” McVay cited examples including money for mortgage-rate buydowns and an offer to cover more than half a year of HOA fees.
Sellers may prefer concessions because they can help a deal along while not requiring a lower sale price, experts say. McVay says sellers are worried about net proceeds, as many of them bought at the top of the market in 2021 and 2022, and will be buying again at a higher mortgage rate.
“That’s why I recommend my buyers ask for concessions instead of a lower sale price—it can be a win-win because then the buyer is catching a break and the seller doesn’t have to go below the price they had in their head,” she said.
Concessions are rising most in Seattle, where more than 70% of home-sale transactions during the first quarter offered concessions to buyers, according to Redfin. The New York metro area recorded the biggest drop in concessions in the first quarter with home sellers giving concessions to buyers in just 5.5% of home-sale transactions, Redfin said.
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