What buyer concessions should I ask for in a Phoenix offer?

Buyer concessions are negotiated costs or repairs the seller agrees to cover on your behalf. In Phoenix, you can ask for closing cost credits, repair credits, rate buydowns, or seller-paid warranties. Whether you get them depends on market conditions, property condition, and your offer strength.

The Phoenix market shifted in late 2023. Inventory climbed, prices softened, and days on market increased. That created real leverage for buyers. Concessions are back on the table, but you still need to know what to ask for and when.

Closing cost credits

This is the most common concession. You ask the seller to contribute a percentage or flat dollar amount toward your closing costs. Typical Phoenix closing costs for buyers run 2 to 3 percent of the purchase price. That includes lender fees, title insurance, appraisal, recording fees, and prepaid items like homeowners insurance and property taxes.

Example: You buy a $450,000 home in Gilbert. Your closing costs are roughly $11,000. You negotiate a 2 percent seller credit, which covers $9,000. You bring $2,000 plus your down payment to close instead of $11,000.

Your lender caps how much you can receive based on loan type. Conventional loans allow up to 3 percent for buyers putting down less than 10 percent, up to 6 percent for 10 to 24 percent down, and up to 9 percent for 25 percent or more. FHA allows up to 6 percent. VA allows up to 4 percent.

Closing cost credits reduce your cash to close, but they do not reduce the purchase price. The seller pays the credit at closing from their proceeds. If your appraisal comes in low, the credit can create issues because the loan amount is based on appraised value, not contract price.

Repair credits

You identify needed repairs during your inspection period and ask the seller to either fix them or give you a credit to handle the work yourself. Most buyers in Phoenix prefer credits over seller repairs because you control the contractor and the quality.

Common repair items include HVAC issues, roof wear, plumbing leaks, electrical panel upgrades, and pool equipment. Arizona homes also deal with foundation movement due to expansive soil. If your inspector flags settling or cracking, you can request a foundation specialist report and negotiate based on those findings.

Repair credits are technically part of closing cost credits, so they count against your lender's cap. If you negotiate $5,000 for HVAC repairs and $4,000 for closing costs, that is $9,000 total against your lender limit.

Sellers are more likely to agree to repair credits in a balanced or slow market. In a competitive market, they will decline and move to the next offer. Focus on health and safety items, not cosmetic preferences.

Rate buydowns

A rate buydown reduces your mortgage interest rate by paying discount points upfront. You can ask the seller to pay those points as a concession. One point typically costs 1 percent of the loan amount and lowers your rate by about 0.25 percent, though this varies by lender.

Example: You finance $400,000 on a Scottsdale home. You are quoted 6.5 percent. You want to buy the rate down to 6 percent, which requires two points or $8,000. You negotiate for the seller to pay $8,000 toward a rate buydown. Your monthly payment drops by roughly $125, and you save $45,000 in interest over 30 years.

Temporary buydowns are also an option. A 2-1 buydown reduces your rate by 2 percent in year one and 1 percent in year two, then reverts to the note rate. A 1-0 buydown reduces the rate by 1 percent in year one only. These cost less upfront and help with short-term affordability.

Rate buydowns make sense if you plan to keep the home and the loan for several years. If you refinance or sell within three years, you lose the value of the points you paid.

Home warranties and prepaid HOA

You can ask the seller to purchase a home warranty on your behalf. These typically cost $400 to $700 for a one-year policy covering major systems and appliances. Arizona home warranties often exclude pool equipment unless you pay extra, so clarify coverage before accepting.

In master-planned communities like Anthem, Verrado, or Eastmark, HOA dues can run $100 to $300 per month. You can ask the seller to prepay three to six months of HOA fees as a concession. This does not count against your lender's closing cost cap because it is not a closing cost.

Prepaid HOA fees are less common than other concessions, but they work well in slow markets or on overpriced listings that have sat for 60-plus days.

What you can negotiate depends on the market

Phoenix shifted from extreme seller favorability in 2021 and 2022 to a more balanced market by late 2023 and into 2024. Inventory levels in Maricopa County climbed from under one month in early 2022 to over three months by mid-2024. More supply means more negotiating room.

In a hot market, expect zero concessions unless the property has serious defects. In a balanced market, 1 to 2 percent in closing cost credits is reasonable. In a slow market, you can push for 3 percent or more, plus repairs and a warranty.

Days on market also matter. A home listed for 10 days in Chandler with multiple showings will not yield concessions. A home in Sun Lakes sitting for 90 days will. Check the listing history and price changes before making your request.

Your offer strength affects what you get. If you waive your appraisal contingency, offer a quick close, or put down 20 percent, sellers are more willing to give concessions. If you ask for a long inspection period, request occupancy after closing, and put down 3 percent, expect pushback.

How to structure your request

Do not inflate the purchase price to cover concessions. Some buyers think they can offer $460,000 with $10,000 in credits instead of $450,000 with no credits. This only works if the appraisal supports the higher price. If the appraisal comes in at $450,000, your lender will only finance based on that value, and you will need to bring extra cash or renegotiate.

Ask for concessions in your initial offer if the listing has been active for 30-plus days or if comparable sales show other buyers received them. If the market is competitive, submit a clean offer first and negotiate concessions after inspection.

Use your inspection period strategically. You have 10 days by default under the Arizona Association of Realtors contract. Identify real issues and request credits or repairs based on contractor estimates, not guesses. A vague request for $5,000 in repair credits will get rejected. A request for $2,800 to replace a failed HVAC capacitor and compressor, backed by a licensed HVAC quote, has a better chance.

NAR settlement changes and buyer-agent commission

As of August 17, 2024, buyer-agent commission is no longer advertised on the MLS and is not automatically paid by the seller. Compensation is negotiable between you and your buyer's agent. In practice, many Phoenix sellers still offer to pay the buyer's agent as a concession to attract offers, but it is not required.

You can negotiate for the seller to cover your agent's commission as a buyer concession. This is separate from closing cost credits and does not count against your lender cap. If your agent's fee is 2.5 percent and you are buying a $500,000 home in Queen Creek, that is $12,500. If the seller agrees to pay it, you save that amount in cash at closing.

Clarify this before you write your offer. Your buyer's agent will include the request in the purchase contract if the seller is open to it. If not, you are responsible for paying your agent directly.

People also ask

Can I ask for both closing cost credits and repair credits?

Yes, but the total amount is capped by your lender. Conventional loans allow up to 3, 6, or 9 percent depending on your down payment. FHA allows up to 6 percent. Repair credits count toward that cap. If you ask for $8,000 in closing costs and $4,000 in repairs, that is $12,000 total. Make sure it fits within your loan program limits.

Will asking for concessions hurt my offer?

It depends on the market. In a competitive situation with multiple offers, concessions weaken your position. In a slow market or on a property with known issues, concessions are expected. Your agent will advise you based on recent comparable sales and how long the home has been listed.

What happens if the seller refuses concessions?

You have three options. You can walk away if you are still in your inspection or financing contingency period. You can renegotiate other terms, like asking the seller to complete specific repairs instead of giving credits. Or you can proceed without concessions if you want the property and have the cash to cover the costs yourself.

Bottom line

Buyer concessions in Phoenix are negotiable and depend on market conditions, property condition, and your offer strength. Closing cost credits, repair credits, and rate buydowns are the most common requests. Ask for what makes sense based on your budget and the seller's motivation. If you are buying in the Phoenix metro area and want guidance on structuring your offer, talk to a local agent who knows current market dynamics and can help you negotiate effectively.

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