Finally, a New War Story

At lunch with Cynthia and a local real estate baron, we heard about a new tactic for getting a deal on a property. Rather than offering a lower price, ask the seller to handle closing costs, which can run up to $10,000 or more.

Builders with multiple units prefer this approach because they avoid recording a sale at a discount, and listing agents like it better, too. If you have a funny or insightful story for us about how you bought your house, send it to bahn (at) redfin (dot) com; we’ll probably use it, and then we’ll send you a gift certificate for a dinner anywhere you like.


  • Ron

    New tactic?

    This is a pretty common practice, assuming the buyer’s loan program will allow for seller’s contributions toward closing costs.

  • Chris

    Yeah, this is totally common practice, especially in the Seattle condo market over the past decade. Sellers often offer it up-front. Even more often, once a project reach around 70% sold, sellers will offer a “buyer’s allowance” which can either be applied to closing costs, used to purchase condo premiums (upgraded trims or appliances, Murphy beds, etc.) or can be applied to the buyer in a lump sum at closing. Talk with somebody at Williams Marketing or any condo/townhome marketing agency about this practice.

  • Jay Thompson

    New?!? Uh, it’s been done for ages….

    This is the cutting edge of real estate?


  • Glenn Kelman

    Excuse me! I was about to deny that I’d ever said the tactic was new when I see now that I did say exactly that. When it isn’t. That was stupid. We haven’t put up a war story in a long time, and so I thought I could write something quickly. If you guys have something a little more cutting edge, send it in, and we’ll hook you up with a gift certificate.

  • Allen

    That is why I questioned Redfin’s analysis of the discount they were able to get for their buyer that was so much better than a traditional agent…. The closing cost discount the Glenn admits is common place does not show up in the list price to sale price ratio analysis he used, so his press release was misleading.


  • Pat Rioux

    Sellers in the Boston market are offering to pay a year’s condo fees for the buyers. Money toward closing costs is, as stated, a common tactic that has been around a long time.

    During the last slump in Boston I co-owned an exclusive buyer’s agent company and I remember seeing cruises, airline tickets, and higher co-broke fees as incentives for the agents. Third party relo companies typically offered an extra percent cooperating fee. Since our agents were paid by the conveyance attorney, not the listing agency, we rebated the extra percent to the buyer.

    Pat Rioux,

  • Phil Hoover

    I think I now understand why you guys charge less :)

  • Reuben Moore

    Negotiate closing costs? What a clever idea! In fact, it’s so clever, I’m surprised no one thought of it before. Here’s another that Redfin may not have yet considered: Negotiated buy-side compensation.

    Against the rules in some areas, but it is idea that will catch on….

  • Glenn Kelman

    Hey guys, it’s actually very common for us to negotiate for the seller to pay closing costs, especially with new construction. In other situations we tend to focus on price, because this is more tax- and commission-efficient for buyer and seller.

    I was in a cafe last night with friends who hadn’t heard of focusing on closing costs when dealing with sellers who want to report a high selling price. Since they thought it would be useful, and I hadn’t posted all week, I posted it.

  • John

    Off topic.

    Its June 2007, and you folks have nothing up for Washington, DC. Is assume there’s a delay. Can you change your date to reflect the new ETA?

  • Jonathan Dalton


    It’s actually not the worst post in the world if the intended audience was people who don’t want anyone’s help in negotiating an offer and who don’t know you can ask for closing costs.

    Of course, if you don’t know you can ask for closing costs then you probably shouldn’t be going it alone.

    I’m assuming you say listing agents like it better from the commission point of view. I don’t think a couple of hundred bucks is going to influence anyone’s point of view, though.

  • Rovey Roe

    How ’bout this: Negotiate a lower price AND seller paid closing costs AND give the buyer a big ole rebate? Now, that’s a a deal any buyer can sink their teeth into!

  • Glenn Kelman

    Jonathan, the post may or may not be a statement of the obvious for the general consumer but can we please avoid slighting the intelligence of Redfin customers or agents? I am the one who made the post, not them. Redfin agents negotiate aggressively, every day.

  • Rob Beland

    I hesitate to throw my hat into this den of lions but occasionally I have negotiated a second mortgage from a seller to keep the buyer from having to come up with any money out-of-pocket. The second mortgage along with the seller paying the closing costs equals a true $0 out-of-pocket transaction that works well with investment properties with a short-term hold…

  • Agent Scoreboard

    what I think Glenn was trying to say is that, this is not a “new” tactic but one that many “new” home buyers might overlook. Right Glenn?

  • Glenn Kelman

    No, I was just being an idiot and writing too fast.

  • Rovey Roe


    I hope you aren’t referring to a silent second. You know, one that a lender is unaware of???

  • Agent Scoreboard

    Glenn…. your doing great…

    I wish I could recover from my “oh s***” moments as well as you!


  • Brian Brady


    You’ve properly atoned. Here’s your penance:

    Have the agents write the War Stories.

    Keep plugging away. I’m not a huge fan of your business model but I’ll fight anyone who wants to legislate away your existence.