Is That Price Negotiable? Homebuyers Look for Better Deals

Homebuying negotiations can lead to substantial savings for many, even if many prospective buyers miss out on related opportunities. LendingTree surveyed nearly 2,000 U.S. consumers about their negotiation experiences while buying a home, revealing that just 39% of prospective homebuyers negotiated the initial APR or refinance rate on their most recent home purchase, while some 63% of homebuyers negotiated the purchase price.

Key findings:

• Prospective homebuyers aren’t strangers to price haggling, but the real savings is in the home loan—and most aren’t taking advantage. Only 39% of homebuyers say they negotiated the initial APR or refinance rate on their most recent home purchase, even with a success rate of 80%.
• Negotiating a lower APR could greatly impact how much you pay over the lifetime of your mortgage. With a $350,000 30-year fixed-rate mortgage with a 6.50% APR, even just a quarter-point reduction to 6.25% translates to a savings of $57 a month, $684 a year or $20,520 over the life of the loan—a significant difference compared to a few thousand dollars off the listing price.
• Significant savings may come from negotiating a lower mortgage rate, but 63% of homebuyers prioritize reducing the price of a home. 38% of buyers who negotiated did so with closing costs, while 36% had sellers pay for repairs. However, 24% of buyers say they regret making certain concessions when haggling.
• The art of the deal hasn’t been mastered. Almost a quarter of homebuyers (23%) say they’ve negotiated too hard and lost a home they wanted to buy. Meanwhile, others wish they would have pushed for more. Of the 36% of buyers who say they wish they negotiated harder, 40% say fear of losing the home held them back, 25% say they lacked confidence in their negotiating skills and 22% say they didn’t know that they could negotiate.
• The market could be shifting toward buyers, as only 42% of sellers are likely to negotiate (versus 63% of homebuyers)—still, regret is common regardless of position. About a third of sellers (34%) say they’ve settled for a lower price and/or paid for repairs, and 27% say they’ve covered closing costs. And although it may have seemed right then, 32% of sellers say they regret the concessions they offered to make the sale.

According to LendingTree's survey, although homebuyers are familiar with bargaining over the cost of the home, a realm of savings often remains untapped—and it lies within their loans. Some 45% of men were more likely to negotiate their home loan terms than women (34%). By age group, younger homebuyers were more likely to negotiate these terms than older consumers.

Gen Z homebuyers (ages 18 to 26) were the most likely to do so, at 49%, followed by:

• Millennials (ages 27 to 42) — 44%
• Gen Xers (ages 43 to 58) — 37%
• Baby boomers (ages 59 to 77) — 31%

Homebuyers making between $75,000 and $99,999 were the most likely demographic to negotiate the initial APR or refinance rate, at 50%. Meanwhile, those making less than $35,000 (29%) were the least likely. Homebuyers with children younger than 18 (47%) were significantly more likely to negotiate these terms than those with no children (38%) and those with adult children (33%).

How much can you save by negotiating lower APR?

Using a $350,000 30-year fixed-rate mortgage with a 6.50% APR as an example, a quarter-point reduction to 6.25% could save homebuyers:

• $57 a month
• $684 a year
• $20,520 over the life of the loan

That’s a significant difference, particularly compared to negotiating the list price—which often saves just a few thousand dollars.

Homebuyers negotiating home price reductions

While negotiating a lower mortgage rate may save the most money, the majority (63%) have negotiated the price of the home. Men (67%) were again more likely to do so than women (60%). By age group, Gen Z homebuyers were the most likely to negotiate home prices, at 67%. That’s followed by:

• Gen Xers (64%)
• Baby boomers (63%)
• Millennials (61%)

Meanwhile, those earning six figures were the most likely demographic to negotiate home prices, at 79%. Conversely, those earning less than $35,000 were the least likely (47%). Homebuyers with children younger than 18 (69%) were again significantly more likely to negotiate in this realm than those with adult children (62%) and those with no children (59%).

“Today’s housing market is tough, but sellers are nonetheless more willing to negotiate with buyers than over the past two years,” said LendingTree Senior Economist Jacob Channel. “In the same way that asking your lender for a lower rate can help you save money, so too can asking a seller to cover things like closing costs or to pay for repairs.”

In what other ways did homebuyers negotiate? Beyond the price point, the most popular choice was closing costs (38%) (particularly among Gen Xers (48%)), followed by repairs (36%) — a choice especially common among homebuyers with kids younger than 18 (40%).

Nearly a quarter (24%) of homebuyers say they regret making certain concessions when negotiating. That’s a sentiment particularly felt among Gen Z homebuyers (39%), parents with kids younger than 18 (34%) and millennials (34%).

Can homebuyers negotiate too much?

Some 23% of homebuyers who’ve negotiated the price say they lost a home they wanted to buy because they negotiated too hard.

“In some instances, an overly aggressive buyer can alienate a seller and lose out on a chance to buy a great home,” said Channel. “With that in mind, while buyers are well within their right to ask for concessions from sellers, they should always be polite and reasonable.”

On the other hand, 36% of homebuyers say they wish they’d negotiated harder. Of these respondents, 40% say fear of losing the home held them back, making it the most popular reason for not pushing harder. Another 25% say they lacked confidence in their negotiating skills and 22% say they didn’t know they could negotiate.

Many Americans experiencing homebuyer regret

LendingTree data revealed home sellers are less likely to negotiate than buyers (at 42% versus 63%). Among sellers, six-figure earners (60%) and those making between $75,000 and $99,999 (50%) are the most likely to negotiate. When it comes to the most common concession point for sellers, lower prices and/or repairs are the most common (34%). Meanwhile, 27% say they’ve covered closing costs.

Channel says that asking your lender for a lower rate on your mortgage when you’re buying or refinancing can pay off—especially if you’ve got a high credit score and little debt.

To read the full report, including more data, charts, and methodology, click here.