Negotiating the price of a home is not about lowballing the seller and hoping they accept. It is a skill that combines data, strategy, and timing, and when done right it saves you real money. I have spent over 23 years as a loan officer and 18 years as a real estate agent working across hundreds of deals, and the truth is that most of my negotiations do not even touch the purchase price. I negotiate around seller concessions, contract expenses, inspection repairs, and appraisal gaps. Price is just one lever.
In this guide, I am going to walk you through the exact framework I use with my own clients: how to read a listing, use comparable sales to set your offer, request seller concessions, protect your earnest money with the option period, and know when to push harder versus when to walk away. By the end, you will understand how to structure an offer that saves you thousands without insulting the seller or killing the deal.
Prefer to watch? Patrick breaks down the negotiation framework in this video.
Read the Listing: What to Look For
Before you make any offer, you need to understand what the listing is telling you. A listing price is not the same as market value. It is the seller's starting point, and it may be anchored to their emotional attachment, what they owe on the mortgage, or what a neighbor told them their house is worth. Your job as a buyer is to separate the asking price from what the data says the home is actually worth.
Start by looking at three things on every listing:
Days on Market
How long has the home been listed? A home sitting for 30, 60, or 90 days tells you the price may be too high. Sellers become more motivated as days pile up. A home that went under contract and came back to market (back on market or BOM) may have had a buyer who walked away after inspection, which signals room to negotiate.
Price History
Has the seller dropped the price already? A price reduction is a clear signal the market is telling them they are overpriced. Each reduction is an invitation to come in below the new asking price. For a step-by-step breakdown of how to put together a competitive offer, check out my Ask Patrick guide.
Condition and Updates
Read the remarks. Has the roof been replaced? Are the HVAC and water heater original? Is the kitchen dated? These are not just cosmetic concerns: they are dollar amounts you can factor into your offer. A home with an original 20-year-old roof has a $10,000 repair coming soon, and that should be reflected in the price.
Use Comparable Sales (Comps) to Set Your Offer
Your agent should pull comparable sales, or "comps," for you. These are homes in the same neighborhood that sold in the last four to six months. Not a neighboring subdivision, not a similar ZIP code, but the same neighborhood. The comps tell you what buyers have actually paid for similar homes recently. That is your real market data.
Here is how I use comps in practice. Let us say a home is listed at $300,000. I pull the comps and find that similar homes in the same neighborhood sold for $280,000 to $285,000 over the last six months. The active listings in the neighborhood are around $290,000. The $300,000 listing is above both the sold comps and the active competition. That tells me the seller is overpriced.
Patrick's strategy: I do not just submit a lower number. I give the listing agent the comps. I send them the data and say, "The house around the corner that is very similar to this one sold for $282,000 four months ago. With rates where they are today, our offer at $280,000 is a strong offer." Now the listing agent has ammunition to go to their seller and say, "This offer is reasonable based on the comps," rather than immediately rejecting a number that feels low. This is why you never just throw out a number. You always provide data that backs it up.
A strategic offer backed by comps is not a lowball. A lowball is an arbitrary number with no data behind it. A strategic offer is a data-driven price that tells the seller, "Here is why the home is worth this amount, and here is the evidence." Sellers may still say no, but they are far more likely to negotiate when you show your work.
Seller Concessions: How They Work and What to Ask For
Seller concessions are closing costs that the seller agrees to pay on your behalf, and for many first-time buyers, these are more impactful than lowering the purchase price. Here is why: most of my clients do not have an extra $7,000 to $10,000 sitting in their bank account for closing costs. They would rather buy the home at $285,000 with $7,000 in seller-paid closing costs than buy at $277,000 with zero concessions. The cash they save at closing is immediate and tangible.
I negotiate seller concessions in probably 9 out of 10 transactions. The question is not whether you can get them, but how much. Your loan program sets the limit, and I have listed the current limits below. You do not always get the maximum, but you can almost always count on at least 2 to 3 percent.
Going back to our $300,000 example: if comps say the home is worth about $285,000, I would offer $285,000 and include 2 percent seller concessions. That means the seller covers $5,700 of your closing costs on top of accepting the $285,000 price. Your effective cost is lower than $285,000, and your cash to close drops significantly.
Seller Concession Limits by Loan Type
Current limits for 2026. These apply to the purchase price. Concessions cover closing costs, prepaids, discount points, and other approved expenses.
| Loan Type | Max Concession | Notes |
|---|---|---|
| FHA | 6% | Regardless of down payment. Covers allowable closing costs, prepaids, and discount points. |
| VA | 4% | Applies only to additional concessions (funding fee, buydowns, debt payoff). Standard closing costs are unlimited and do not count against the cap. |
| USDA | 6% | Covers allowable closing costs, prepaids, and discount points. |
| Conventional (less than 10% down) | 3% | LTV above 90%. This is the most common for first-time buyers putting 3% to 5% down. |
| Conventional (10% to 25% down) | 6% | LTV between 75% and 90%. |
| Conventional (25%+ down) | 9% | LTV at 75% or below. |
| Conventional (Investment) | 2% | Regardless of down payment. |
Texas-specific note: Seller-paid title insurance, survey fees, and home warranty premiums are separate negotiable line items in the Texas real estate contract. They are not always included in the concession cap, depending on the loan type. Your agent should advise on how to structure these items.
Earnest Money and Option Period Strategy
Earnest money is a deposit you put down when your offer is accepted to show the seller you are serious. It is held in a third-party account and applied to your down payment or closing costs at settlement. In Texas, the standard earnest money is typically 1 percent of the purchase price, but it can be more or less depending on the market and your strategy.
Here is the key strategy: You do not want to put up so much earnest money that the seller has leverage over you if issues arise during the option period. I typically recommend earnest money around 1 percent. That is enough to show you are serious but not so much that you feel trapped if the inspection reveals a problem.
The option period is a Texas-specific provision that typically lasts 7 to 10 days after the contract is accepted. During this time, you pay a small option fee (usually $100 to $300) directly to the seller for the right to back out of the contract for any reason. That small fee is the only money you lose if you walk away. Your earnest money is fully refundable.
Texas-specific: The option period is one of the most buyer-friendly provisions in Texas real estate. It gives you the right to have the home inspected, review the seller's disclosure, and back out for any reason. Use this time to negotiate on inspection items, verify the property condition, and confirm the numbers work. If the seller refuses reasonable requests, you can walk with your earnest money intact.
Negotiate Specific Contract Line Items
Beyond the purchase price and seller concessions, there are specific expenses in the contract that you can negotiate. In Texas and most states, these are separate line items that can save you hundreds or thousands:
Title Policy
The title insurance policy protects you against claims on the property's title. On a $300,000 home in Texas, the owner's title policy runs about $1,500 to $1,600. If the seller pays for it, that is money you keep in your pocket. Ask your agent to include this in the offer.
Survey
A property survey confirms the boundaries of the lot and identifies any encroachments. Cost is typically around $500 to $600. Ask the seller to cover it in the offer.
Home Warranty
A home warranty covers certain systems and appliances for the first year after purchase. It costs around $500 to $600. I recommend including a request for the seller to pay for the first year's premium. It gives you peace of mind as you settle into your new home.
Furnishings and Non-Attached Items
Does the refrigerator convey? What about the washer and dryer, the window coverings, or the giant potted plants in the corner? These items are negotiable. You can include a list of non-attached items you would like the seller to leave. Sometimes they are happy not to move them.
Putting It Together: A Complete Example
Let me walk you through a real example so you can see how all these pieces fit together.
Example: $300,000 Home
Your original estimated cash to close of roughly $21,000 is now reduced to around $9,200. And you own a $285,000 home. This is what a well-structured negotiation looks like.
When to Push Harder vs When to Walk Away
This is the most important judgment call in any negotiation, and it is where inexperienced buyers make expensive mistakes. Here is how I guide my clients through it.
Push harder when: you have strong comps supporting your price, the home has been on the market for more than 30 days, there are clear price reductions in the history, the inspection reveals legitimate issues that are not just cosmetic, or you have a backup offer you are comfortable moving to.
Walk away when: the seller is not budging and you are already at a fair market price, the inspection reveals major structural issues that the seller refuses to address, the appraisal comes in significantly below your offer and the seller will not adjust, or the negotiation has become adversarial and the seller is not negotiating in good faith.
Patrick's word of caution: If you love the house, do not let pride over a few thousand dollars kill the deal. A couple thousand dollars spread over a 30-year mortgage is nothing compared to the daily enjoyment of living in the neighborhood, the home, and the lifestyle you want. I have seen many negotiations break down because buyers got emotionally locked into hitting a specific number. Do not let winning the negotiation cost you the home you really want. The big win is getting the house that is right for you.
Patrick's Take: The Dual-Licensed Advantage
Most negotiations in real estate involve three parties: the buyer, the seller, and the lender. When you work with a separate agent and loan officer, those two professionals communicate indirectly, and strategy can get lost in translation. When I represent you as both your loan officer and your agent, I know exactly what your specific loan program can handle.
If a seller refuses a repair request on an FHA loan, I have the ability to structure the deal differently, switch loan types if it makes sense, or find creative solutions that a separate agent and lender might not discover until it is too late. That flexibility saves deals and puts more money in your pocket. Over 23 years in loan origination and 18 years in real estate, I have structured hundreds of transactions, and that experience lets me see the path forward when others see a dead end.
Frequently Asked Questions
Is it better to negotiate on price or ask for seller concessions?
How much earnest money should I put down?
What is the difference between a lowball offer and a strategic offer?
Can I negotiate again after the offer is accepted?
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Complete First-Time Home Buyer's Roadmap
Full start-to-finish guide
Home Inspection Negotiation Guide
Post-inspection negotiation strategies
VA Home Buying Guide
Military family home buying benefits
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Every buyer journey is different, but the first step is always the same: a conversation. I will help you understand your options, run the numbers, and build a plan that fits your goals and your budget. Whether you are looking in San Antonio, Bulverde, or anywhere across the Texas Hill Country, I am here to guide you through every step from pre-approval through closing.
Patrick Kevin Fagan
Loan Officer and Realtor · AXEN Realty LLC · San Antonio and Texas Hill Country
Licensed Sales Agent · 454749 · TX · NMLS 877741
Sincerely, Patrick Kevin Fagan