The Top 5 Ways to Negotiate Major Discounts On Your Next Property

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My favorite time to negotiate a deal is when I’m already in contract for it.

Yes, I try and do some back and forth on price beforehand, but I’ve always felt that my leverage is much greater once I’m the only one the seller can talk to. The worst that a seller can do when you ask for an enormous credit is to say “No!” or maybe give you a mean scowl.

In either case, saving tens or hundreds of thousands of dollars is certainly worth a good scowl. I’ve used several methods to obtain credit requests through the years and have compiled some of the most effective methods below.

The Top 5 Ways to Negotiate Major Credits on Your Property

5. Offer to sit down with the seller in person.

Negotiating in person can often help your case. Be friendly, respectful — and most of all, reasonable. The most effective negotiators are willing to make concessions in order to get a deal done.

4. Have your contractor bid every single thing in the house that needs — or could need — fixing.

You should do this regardless of whether or not you are going to ask for a credit.

Related: Real Estate Investing Without Cash: Leasing Your Credit

Things in homes break and wear down — particularly when tenants live there. It is important to budget for these impending costs. It is also important to ask for the seller to pay for them. My favorite things to have the contractor bid are the roof, new dual pane windows, a new furnace and ducting, and then also electrical.

The key here is to not just rely on your inspector. Hire a contractor to get to the property and give in depth bids on all the items.

It also carries more weight when the bid comes from someone who works as a general contractor.

3. Get bids from two different contractors.

Particularly when dealing with REO deals or Short Sales, make sure to include two different contractor bids. It is important to show lots of evidence for why you are requesting a credit. Contractor bids can have large variances, so having more bids helps your case.

Contractor relationships are very important in the single-family home business, so make sure not to waste your contractor’s time — or at least compensate them for bids that don’t turn into work.

2. Inform the seller that they will need to disclose all of the bids and reports you give them to the next buyer, even if they reject your request for a credit.

In other words, they are going to pay for these repairs one way or the other, so they might as well give you the credit now and be done with it.

This is definitely a tough negotiating ploy, but it is very effective. If your goal is to make money, then you should use it.

1. Tell the seller that if they accept your credit request, you will have all of your deposit money go hard, and you will remove contingencies.

There is only so far you can push people without them fighting back.

Related: Why You Should Pull Credit Reports for Seller Financing

This is a great tactic because it proves to them that you are dead serious about buying the property, and it also means that you won’t be able to go back and ask for more money off later. At this point they are probably so sick of negotiating with you that they would pay you just to leave them alone – which you will, just right after they give you that big ol’ credit request!

Do you play hardball when it comes to credit requests? What would you add to my top 5 list?

Join in the conversation below!

About Author

Conor Flaherty

Conor has experienced every aspect of the foreclosure and rental business for single-family homes. He was VP of Acquisitions at Silver Bay Realty Trust, and has flipped over 100 homes. Conor started a blog called Wall Street Slum Lord and is working on publishing his first novel.


  1. I’m curious how you would be able to enforce item #2 . . . if they don’t take your offer, how is the seller compelled to do ANYTHING with the next buyer that comes along? I see your tactic is to get the property under contract and then continue negotiating . . . how often does that work in your favor and how often does it backfire?

    • @ Christina, After the contractor bids come in showing all of the defects in the property, the owner would have to disclose the defects or potentially risk being held liable for damages the next buyer may incur. The seller is not expected to have knowledge of any latent defects, but the contractor bids would make them known defects. Either way, the credit would have to be given now or later. I could be wrong though…

  2. Sorry, but this is a sleazy tactic that should never be used. The only things that should EVER be renegotiated are those that you could not have possibly known before making an offer. If the roof is caving in, that is obvious and you should be basing your offer on all associated repairs. This is the kind of tactic that hurts the reputation of investors!

    • Conor Flaherty

      Walt – Please don’t be sorry, I appreciate the comment.

      I personally don’t think negotiating is sleazy. Having contractors get bids on everything that you are going to need to fix is an important part of my underwriting process – I need to know how much I will have to spend. Once I have a list of items that will need repair then all I am doing is asking the seller for a credit. They are by no means obligated to give it to me.

      I analyze dozens of properties every week – many of them occupied. Many times listing agents encourage me to make offers subject to inspection.

      What is your process? Do you get bids on everything before making an offer?

      • Negotiation is not sleazy. Using facts that were obvious and/or unimportant to extort additional money from a buyer is unethical and sleazy, in my opinion. Having the deal subject to an inspection should involve discovery of unknown and hidden defects. Not every trivial item. The trivial items should be part of the known. You should know that outlets, switches, covers, light fixtures, etc are likely to need replacing. You should know that walls need repair and painting. You should be able to easily discover the age of the HVAC system. As an investor you should be able to see the majority of problems. And if you know them, you should include them as discounts in the offer, not as extortion items to get a hopeful buyer to reduce the price out of desperation to keep a deal alive.

        • Conor Flaherty

          I see what you are saying. Not to get too conceptual, but I think in a free-market a house will sell for what it’s worth. Obviously every deal is different, but if it is a seller’s market then asking for credits usually won’t work. On the flip side, if it is a buyer’s market then they will. The point of the article isn’t to extort people – I never threaten or force people to do anything. I was just trying to bring light to the ways that you can maximize your credit requests.

          In terms of knowing problems I think you are simplifying a bit too much. I can know the age of the HVAC but I won’t know what it’s condition is until I get my trusted HVAC guy out there to inspect it. I will grant you that I’m not handy at all, but I think most people are in my shoes. If it is going to cost 5K to fix the HVAC, why shouldn’t I ask for the whole price? Wouldn’t you?

          Lastly, I don’t think any dollar item is trivial. Light switches may be getting close,though… 🙂 Light fixtures can cost a upwards of a few hundred bucks. Add in five or six of those and the money starts to become meaningful. I guess I’m cheap, but I certainly want to know what those will cost to fix. There are also potential intricacies about replacing light fixtures like patching the walls, moving electrical, etc. A light bulb that is out could mean a rat ate through the electrical in the whole side of the house! OK, I’m being dramatic, but do you see my point?

          In any case, I appreciate your input. You are clearly very experienced and have a very high ethical standard. The world needs more people like you!

        • I agree with Walt. I think trying to use items that were known before hand to reduce the price is pretty sleazy and will get you a bad reputation. When you do a lot of deals agents will start remembering who asked for a huge credit on every contract and start telling their sellers to watch out.

          I get a lot of my deals based on my reputation and agents know I will close with no additional costs unless there is something huge that could not be known about.

  3. Karen Margrave

    Chris, you are totally incorrect. Any defects or bids given to the seller do not have to be shown to any potential buyers, as they are subjective and based on an opinion of someone that a potential buyer has hired. Unless there is some type of official report such as a termite report or other inspection ordered by the seller, and/or required by a lender for funding, or something of that magnitude, the seller has no obligation to do anything, and can never be held liable for not showing such reports to subsequent buyers.

    You are also insinuating that you can get a contractor to give you bids on unimportant items to increase your negotiating power, which is totally unethical; and no contractor would participate in such extortion.

    I’m sorry, but your blog is not a lesson on how to negotiate deals, but on how not to behave. Reputation and integrity will make you far more money in this business than tricks. Just because you can do something, doesn’t mean you should, and I hope you change your tactics.

    • Conor Flaherty

      Karen – Thank you for the comment. I appreciate your passion.

      Having purchased and operated a lot of property I think that all items are important because if they break then I’m going to need to pay for them to get fixed. I want as comprehensive a list as possible before having money go hard, don’t you? Thanks again for the comment!

      • Don’t get me wrong, I will absolutely use every necessary repair as justification for a reduction in price. But, I do it openly and before I have them between a rock and a hard place. I don’t use repairs as an extortion item, that is my point.

      • Karen, if a contractor that you hire finds a latent defect, whether it be bad electrical, plumbing, etc. The seller doesn’t have to disclose it to the next buyer, even though it now becomes a material fact? I am not saying they have to make a copy of the actual bid received, but existing issues may be found that the seller are unaware of.

  4. Karen Margrave

    Let me clarify, IN MY OPINION, if there is an “actual defect” that would be considered a material fact to any subsequent buyers, then of course the seller needs to disclose it. However; just because some buyer trying to beat a seller down on price, and finds a contractor that will write up a huge laundry list of supposed defects, doesn’t mean those defects actually exist or are material facts, and the seller is under no obligation to disclose to a potential buyer the laundry list brought to him by a buyer trying to beat him down on his price.

    The seller has to disclose “FACTS” not accusations, there’s a difference. Note: I am NOT a lawyer, every state has their own real estate laws, and if you are listing or selling a property, you need to consult an attorney for advice.

  5. Anthony Kaleta on

    Conor – Interesting article, which has stimulated some equally interesting discussion.

    I think it is essential to engage a contractor/ expert/ surveyor to price potential repairs and present them to the vendor. As much a possible, I want to know what costs I’m in the hole for when I complete. This has worked incredibly well (as a negotiating tool) with the real estate purchases I have made to date. The key I found is that you have to remain flexible and have respect for the vendor at all times. Pricing in repairs to the big ticket items (anything structural, plumbing, electrical etc) far outweighs anything of small value (e.g. – light switches :)).

    However, one line from your article (point 1) that sticks in my head is: “At this point they are probably so sick of negotiating with you that they would pay you just to leave them alone – which you will, just right after they give you that big ol’ credit request!”. I’m sure this comment was made in jest, but irrespective, I think this reflects a poor mentality and a lack of ethics. Trying to grind vendors down, distressed or otherwise, is a complete rookie approach and one that just shouldn’t be engaged.

    • Conor Flaherty

      Anthony – Appreciate the comment. Just to clarify, I’m talking about the seller, not vendors (like contractors). Probably doesn’t change your perspective, but just wanted to point that out. I will say that sellers and their agents are able to say “No” to anything that I request.

  6. Connor, I think you miss the point. It’s ok to negotiate, be cheap, ask for whatever you want. The issue is making an offer with the intention of asking for a lot of crazy things. Some will do it bc they are in a jam or don’t want to relist, but either way you are taking advantage of the seller

  7. I’m with the people saying that going in knowing you plan on trying to ask for steep discounts is disingenuous and not negotiating in good spirit.
    Nothing wrong with having an inspection contingency and nothing wrong for asking for concessions in major unforeseen issues come up. However all the little ticky tack crap is not a big deal nor should have not been noticed beforehand. This includes things like light fixtures. Yeah you could pay $100+ each and maybe there are a dozen in a place. Not a small cost but there is generally no reason you can’t look at them and know if you are or are not going to replace them.
    Now the situation where you think a bulb is out and it turns out rats did eat through the wires, well THAT is a big deal and not one you could have reasonably had any idea about during your showing.

    I also would take a step back when telling what someone does and does not have to disclose. I think everyone else agrees they do not have to disclose any “Bid” you get. What the work is will be a little more debatable. If you have a lead report, termite report, mold report, radon report, structural engineer report on foundation or structural issues etc… then they will have to disclose that stuff. If you just have a bid saying it will cost $14K to replace a 20 year old roof that isn’t leaking or $6K to replace the 18 year old HVAC system that is working still then there is nothing to disclose.
    It seems like you are insinuating that they need to do things like that. Most disclosures I have seen make them say if there are actual issues and give an approximate age.

    Are you dealing with mostly listed places? If the sellers are represented then I’d be less concerned about this as their agents should be able to guide them on these points.
    If you are dealing with sellers directly I could see this biting you in the butt if you have someone POed at you after the fact and sue you and tell the judge that you told them they needed to disclose to any other buyers that they needed to do $20K of work in the example above.

  8. Will Barnard

    I thought I already responded in these blog comments but apparently not, though it was my intention to.

    It is my considered opinion that the suggestions and advice in this blog post are terrible. Much of that opinion is backed up in this thread by me and a variety of others:

    I believe that all readers of this post should carefully consider the comments and opinions in these responses as well as the linked thread before utilizing these tactics.

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