46% of Sellers Gave Concessions in May. Here's Why

According to new Redfin research, home buyers have more negotiating power than they’ve had in years. 

Last month, sellers gave concessions to buyers in 46.2% of all U.S. home sales. That’s the highest share for May that Redfin has ever recorded. Nearly half of all sellers are sweetening the deal for buyers to get their homes sold. 

But just knowing concessions are happening more frequently doesn’t help you much if you don’t know why they’re happening or what kinds of concessions you can ask for. 

That’s what I’m diving into today. 

What a Seller Concession Actually Is

A seller concession is something a seller offers to help reduce what it costs you to buy their home. These typically fall into three categories:

• Repair credits: The seller gives you money to cover repairs instead of fixing them before closing.

• Closing cost contributions: The seller covers some or all of your closing costs, which can add up to thousands of dollars.

• Mortgage rate buydowns: The seller pays to temporarily or permanently lower your interest rate, reducing your monthly payment.

It goes without saying that any concessions should be in writing, clearly spelled out in the agreement. 

Another detail to remember: Redfin’s data on concessions doesn’t include list price reductions or negotiated price drops. Concessions are a separate category on top of price. 

Just because a seller insists their price is as low as they’re willing to go doesn’t mean they’re not open to concessions that could make the deal more affordable to the buyer. 

Why Sellers Are Offering Concessions Right Now

Buyers have leverage right now, and sellers know it.

There are currently 47% more home sellers than buyers in the U.S. Mortgage rates and home prices are still historically high, and a lot of would-be buyers are sitting on the sidelines because of broader economic uncertainty, including concerns around inflation, job security, and the economic ripple effects of the Iran war. 

With demand soft and listings increasing in many markets, sellers are competing for a shrinking pool of buyers.

What Buyers Can Realistically Ask For

Knowing concessions exist is an advantage, but knowing what to request is where this gets useful. 

The three concession types are not mutually exclusive, by the way. Redfin found 15.7% of home sales in May included both a concession and a price drop, up from 12.8% a year earlier, the highest May share on record for that combination. 

Put another way, roughly 1 in 7 homes that sold last month came with both. So, not a slam dunk, but it could be very much worth looking into. 

Here's how to think about which concession to prioritize:

• If cash is tight at closing, ask for closing cost contributions. This keeps more money in your pocket on day one.

• If your monthly payment is the sticking point, ask for a rate buydown. Even a small reduction in your rate can lower your payment by a meaningful amount over the life of the loan.

• If the home needs work, ask for a repair credit. You'll have more control over the outcome and can apply the credit toward contractors you choose.

Asking for a combination is reasonable in this market. A good agent will help you figure out what's worth pushing for based on the specific home and seller situation.

In the Riverside area, the share of home sales with a consession was 54.0%.

 Q: How common are seller concessions right now?

A: Very common. According to Redfin, sellers gave concessions to buyers in 46.2% of all U.S. home sales this past May, the highest share for that month Redfin has ever recorded. In the Riverside area specifically, that number is even higher, at 54.0% of home sales.

Q: What kinds of concessions can I actually ask for as a buyer?

A: There are three main types: repair credits, where the seller gives you money instead of fixing something themselves; closing cost contributions, where the seller covers some or all of your closing costs; and mortgage rate buydowns, where the seller pays to lower your interest rate temporarily or permanently. All three should be spelled out in writing in your agreement.

Q: Why are sellers offering concessions instead of just lowering the price?

A: Because buyers have leverage right now. There are currently 47% more home sellers than buyers nationally, and with mortgage rates and prices still elevated, a lot of buyers are sitting on the sidelines. That's pushing sellers to compete for a shrinking pool of buyers, often by sweetening the deal instead of, or in addition to, cutting the price.

Q: Can I ask for a price reduction and a concession at the same time?

A: You can, and it's happening more than you'd think. Redfin found 15.7% of May home sales included both a concession and a price drop, up from 12.8% a year earlier, the highest share on record for that combination. It's roughly 1 in 7 homes, so it's worth exploring with your agent depending on the seller's situation.

How to Use This in the Riverside Area Right Now

If you're under contract or about to make an offer, this is the conversation to have with your agent before you finalize your ask. The national numbers give you useful context, and what's happening in the Riverside area right now will shape what's actually achievable in your negotiation.

If you're still early in your search, this is a good moment to get clear on what a concession would mean for your specific finances. A rate buydown might do more for you than a price drop. 

Every situation is different, and getting that clarity now means you're not figuring it out on the fly when you find the right home.