Ed Neuhaus 
Nearly half of all active listings in Austin have cut their price at least once. According to Austin Board of Realtors data, 47.9% of the metro’s 13,400+ active listings have taken a price reduction, homes are sitting an average of 89 days on market, and there are 128% more sellers than buyers. Those numbers add up to one thing: leverage you haven’t had since 2011.
But here’s what most buyers don’t realize. The listing price is just where the conversation starts. The real opportunity in this market is what happens AFTER you go under contract. Seller concessions (credits the seller pays toward your closing costs, rate buydowns, or repairs) are where the biggest savings are hiding right now. And sellers are saying yes to these at a rate I haven’t seen in my 19 years working this market.
Lets break down exactly how to ask for them, what sellers are actually giving, and the math behind why a $10,000 concession might save you more than a $10,000 price reduction.
What Are Seller Concessions (And Why They Matter More Than Price Cuts)
A seller concession is money the seller agrees to credit you at closing. Instead of lowering the price by $10,000, the seller keeps the price the same and hands you $10,000 to use toward closing costs, buying down your interest rate, or prepaid expenses like insurance and taxes.
Why does this matter? Because price reductions and concessions hit your wallet differently.
Lets say you’re buying a $400,000 home. A $10,000 price cut saves you roughly $53 per month on your mortgage payment at 6.5%. Not bad. But that same $10,000 applied as a concession toward a rate buydown could save you $200+ per month for the first two years. That’s real money, especially when you’re furnishing a new house, dealing with move-in costs, and discovering that the previous owner’s idea of “good condition” was generous (ask me about the AC story sometime).
So the question isn’t just “how much can I get off the price.” It’s “how do I structure the deal to put the most cash in my pocket.”
Why Austin Sellers Are Saying Yes Right Now
I talk to listing agents every week, and here’s what I keep hearing: sellers are motivated. The data backs it up.
The Austin metro has 4.77 months of supply right now, according to the Texas Real Estate Research Center. That’s approaching the 6-month threshold that economists call a balanced market. Translation: we are firmly in buyer’s market territory.
The median sold price in February 2026 came in at $412,250, which is down 25% from the May 2022 peak of $550,000. Homes are averaging 89 days on market. And 22.2% of Austin listings have taken MULTIPLE price cuts, the highest rate of any major metro in the country.
When a seller has been sitting for 60, 70, 90 days with no offers, they’re a lot more open to concessions than they would have been in 2021 when they had 15 offers in a weekend. Right now, most sellers I work with are just glad to be at the table.
Seller Concession Limits by Loan Type
Before you start asking for concessions, you need to know the caps. Your loan type determines the maximum percentage the seller can contribute.
Conventional Loans
- Less than 10% down: seller can contribute up to 3% of the purchase price
- 10% to 25% down: up to 6%
- More than 25% down: up to 9%
- Investment properties: capped at 2% regardless of down payment
FHA Loans
- Up to 6% of the sales price for all FHA loans
VA Loans
- Up to 4% for concession items (things like prepaid taxes, the VA funding fee, and payoff of buyer debts)
- But here’s the part most people miss: standard closing costs and permanent discount points do NOT count toward that 4% cap. So a VA buyer can often get more total seller contribution than it first appears.
For a $400,000 home with a conventional loan and 5% down, that 3% cap means the seller can contribute up to $12,000. With an FHA loan, that jumps to $24,000. That’s a meaningful difference right. Something worth discussing with your lender before you even write an offer.
The 2-1 Buydown: The Power Move of This Market
If there’s one concession strategy I’m recommending to almost every buyer right now, it’s the 2-1 buydown. Lets walk through why.
A 2-1 buydown temporarily reduces your mortgage rate for the first two years of the loan. The seller funds the difference upfront at closing, and that money sits in an escrow account that subsidizes your payments.
Here’s the math on a $400,000 purchase at 6.5% with 5% down (so a $380,000 loan):
Without buydown:
Monthly payment at 6.5%: approximately $2,402 (principal and interest)
With 2-1 buydown:
Year 1 at 4.5%: approximately $1,925/month (you save $477/month)
Year 2 at 5.5%: approximately $2,157/month (you save $245/month)
Year 3+: back to $2,402/month at 6.5%
Total savings over two years: roughly $8,664. And that’s real cash flow relief when you need it most, right when you’re buying furniture, doing move-in repairs, and building up reserves.
The cost to the seller? About $8,500 to $10,000 for that buydown on a $380,000 loan, depending on the lender. Most sellers I’m working with right now would rather pay $9,000 in buydown costs than drop their price by $15,000. The concession costs them less and helps you more. It’s one of those rare situations where both sides actually win.
And here’s the kicker. If rates drop in the next 18 months (and a lot of people think they will), you refinance into the lower rate and those buydown savings were basically free money. Benjamin Graham called this “margin of safety,” buying with a built-in cushion that protects you no matter which direction things go.
Five More Concessions Worth Asking For
The 2-1 buydown gets the headlines, but don’t sleep on these:
1. Closing cost credits
The most straightforward concession. Seller credits you a flat amount ($5,000, $8,000, $12,000) to apply toward your closing costs. In Texas, buyers typically pay 2-4% in closing costs, so on a $400,000 home that’s $8,000 to $16,000 out of pocket. Getting the seller to cover half of that is huge.
2. Home warranty
A one-year home warranty runs $400 to $600. Small dollar amount, but it protects you from surprise HVAC failures and plumbing disasters in year one. I always ask for this because sellers almost never push back on it. It’s an easy yes.
3. Repair credits
After the home inspection, you can negotiate repair credits instead of asking the seller to actually fix things. I usually prefer credits because then YOU control who does the work and how it gets done. Asking a motivated seller to hire the cheapest contractor they can find is… not always ideal (I have stories).
4. Extended rate lock
If your closing timeline is 45+ days, ask the seller to contribute toward extending your rate lock. Rate locks cost money, and in a volatile rate environment, that protection has real value.
5. Prepaid HOA fees or property taxes
Seller prepays several months of HOA dues or covers the property tax proration at closing. Small but meaningful, especially in areas like Lakeway or Bee Cave where HOA fees can run $200+ per month.
How to Actually Negotiate Concessions (Without Killing the Deal)
Ok so you know what to ask for. But HOW you ask matters just as much. I’ve seen buyers lose deals by being aggressive at the wrong time or asking for concessions in a way that insults the seller. Here’s what actually works.
Start with your offer price, then layer concessions on top.
Don’t submit a lowball offer AND ask for $15,000 in concessions. That’s a one-two punch that makes sellers angry. Instead, come in at a fair price (or close to asking if the home is well-priced) and then make your concession ask reasonable relative to how long the home has been sitting.
Use days on market as your leverage.
A home that’s been on market for 20 days? You have some leverage. A home at 60 days? You have a lot. At 90+ days? The seller’s agent is probably telling them to take whatever comes through the door. I always pull the listing history before writing an offer because it tells me exactly how motivated the seller is.
Ask for concessions as a credit, not a price reduction.
This is the move most buyers miss. A $10,000 price reduction might seem identical to a $10,000 closing cost credit, but they’re not. The credit puts cash directly in your pocket at closing. The price reduction just lowers your loan amount slightly (and your monthly payment by like $50). For most buyers, the credit is more valuable right now.
Let your agent do the asking.
Sounds obvious right. But I mention it because some buyers want to negotiate directly with the listing agent or the seller. Don’t do that. Your agent knows how to frame the ask in a way that doesn’t offend the seller, and they know what the market will bear for that specific property. That’s literally what we do. If you want to talk through what’s realistic for a specific home, I’m always happy to walk through it.
Be willing to give something back.
The best negotiations feel like a trade, not a demand. If you’re asking for a $12,000 concession, offer something in return. A faster close, waiving the home warranty request, flexibility on the closing date. Sellers respond to buyers who seem reasonable and motivated.
What Are Sellers Actually Giving Right Now?
Based on deals I’ve closed and what I’m seeing across the Austin metro in early 2026, here’s the realistic range:
Properties under $400,000: $3,000 to $8,000 in total concessions is common. Sellers at this price point are often first-time sellers or investors who are calculating every dollar.
$400,000 to $700,000: this is the sweet spot. $8,000 to $15,000 concessions are happening regularly, especially for homes that have been sitting. 2-1 buydowns are very common here.
$700,000+: concessions vary more because these are often lifestyle buyers and the dynamics get personal. But I’ve seen $15,000 to $25,000 in concessions on luxury homes in Westlake and Spanish Oaks that had been sitting for 4+ months.
Search Austin homes for sale and pay attention to price cut history. Homes with multiple reductions are your best concession targets.
The Big Picture: Why Concessions Beat Waiting for Lower Prices
I get this question constantly. “Should I wait for prices to drop more before buying?” And look, I understand the instinct. But here’s what I would argue.
The terms you can negotiate right now are worth more than a hypothetical future price drop. Think about it. You’re getting concessions, rate buydowns, repair credits, flexible closing timelines, and seller cooperation that simply did not exist 18 months ago. If the market tightens again (and most forecasts suggest it will over the next 12-24 months), all of that leverage disappears overnight.
I lived through 2020-2021 in this market. Buyers were waiving inspections, paying $50,000 over asking, and writing love letters to sellers just hoping to get chosen. No concessions. No negotiation. No leverage at all.
Right now is the opposite of that. And I’d rather buy with leverage and concessions today than try to time the absolute bottom and risk buying without them tomorrow.
Chris Voss wrote about this in Never Split the Difference. The best negotiators don’t wait for the perfect moment. They create leverage where they are. That’s what this market lets you do.
Frequently Asked Questions
Ready to Make a Move?
If you’re thinking about buying in Austin this year, the concession environment right now is genuinely the best I’ve seen. But knowing what to ask for and knowing how to get it are two different things. The negotiation matters. The timing matters. And honestly, having someone in your corner who has done this a few hundred times matters too.
Lets grab coffee and talk through your situation. I’ll pull comps, show you what concessions are realistic for the homes you’re looking at, and help you figure out the math. No pressure, just straight talk about what this market looks like for you specifically.
Reach out to Ed Neuhaus or call me at 512-366-3270. Be safe, be good, and be nice to people.
