Weekly Real Estate News
Summary
Neighbors Bank survey of 934 recent and prospective first-time buyers finds 40% favor seller price cuts and 86% are comfortable offering below asking; July survey data highlight negotiation confidence and persistent affordability worries.
First-time homebuyers are increasingly willing to bargain, and many say the most persuasive concession is a lower asking price. A lender-sponsored survey of 934 prospective and recent first-time buyers found that 86% were comfortable making an offer below list price, while 57% said they had walked away from a home rather than accept the terms on offer.
The findings, published by Neighbors Bank and examined in Realtor.com’s October 11 coverage, put a sharper number on the negotiating shift already visible in listing data. Forty percent identified a price reduction as the concession most likely to make them comfortable proceeding. Separately, 63% said they expected sellers to cut prices, 60% expected repairs before closing and half wanted help with closing costs.
The survey was conducted in July, so it should not be mistaken for a new October measure of demand. Nor does it establish that every first-time buyer has the leverage described. Neighbors Bank surveyed people who were actively searching for their first home, 76% of respondents, and those who had purchased within the previous 12 months, 24%. The lender did not describe the results as a probability sample of all U.S. households.
Still, the responses illuminate a problem agents and loan officers increasingly encounter: buyers are learning to negotiate, but the economics of the transaction remain uncomfortable. Just 21% of respondents said it was a good time to buy and only 27% felt in control of the process. Sixty-nine percent believed each decision carried too much risk to get wrong.
That caution has a clear financial backdrop. Freddie Mac’s 30-year mortgage-rate average reached 7.40% in the October 8 survey. WRE News has also reported that starter-priced homes accounted for 36.2% of active listings, limiting the range of lower-cost choices. A buyer may be more willing to negotiate without finding a home that fits the monthly budget.
Neighbors Bank reported that 83% of respondents would accept a mortgage-rate buydown paid for by a seller or builder. That is a different response from the 40% who selected a price cut as the single concession most likely to increase their confidence. Both figures can be true: a buyer might welcome an interest-rate incentive but still prefer the seller to reduce the purchase price.
The distinction matters at the closing table. A permanent buydown generally requires upfront discount points and lowers the interest rate for the life of the loan. A temporary buydown typically subsidizes early payments for a limited period, after which the borrower must handle the contractual payment. The survey does not separate those structures, so the 83% figure should not be read as evidence that buyers understand their different long-term costs.
A price reduction, by contrast, can reduce the down payment and principal balance, although the actual savings depend on the loan-to-value ratio, taxes, insurance and whether the buyer changes financing terms. Seller credits toward closing costs may conserve cash at settlement but are constrained by loan-program rules. The right concession cannot be determined from a preference poll alone.
Buyers also appear willing to widen their geographic search. Fifty-four percent said expanding the search radius was a strategy they had used, and 88% said they were open to buying outside a major metropolitan area to find a more affordable property. That willingness may give agents more territory to work with, though it can bring longer commutes, different insurance costs and fewer available jobs or services.
The survey exposed another financing gap. Twenty-two percent said they had never heard of low- or no-down-payment loan programs, and 38% expected to need at least 10% down. Eligibility and property restrictions still matter, but the answers suggest some prospective borrowers may be ruling out financing options before comparing them. The lender highlighted USDA, FHA and low-down-payment conventional products in its report; those examples also reflect the lender’s commercial interest in originating loans.
One result deserves particular caution. Fifty-one percent expected their eventual mortgage payment to be similar to or lower than their rent. The study reports expectations, not approved loan terms or independently measured housing costs. Property taxes, homeowners insurance, maintenance and association charges can materially change the comparison, especially in markets where insurance has become a large and unpredictable expense.
Earlier WRE reporting found that nearly half of homebuyers were receiving seller concessions in a separate Redfin analysis. The two studies measure different things: one describes transactions, while Neighbors Bank asked a selected group of first-time buyers what they would accept or expect. Their overlap is evidence that negotiations are a live issue, not proof that every buyer can demand the same discount.
For brokers and agents, the practical question is whether a concession changes the total cost enough to make the transaction sustainable. The July survey suggests buyers will ask more often. It does not show that sellers will agree, that financing will be approved, or that a temporary incentive can repair a fundamentally unaffordable purchase.
