🏡 Should You Ask for Closing Costs or a Price Reduction?

A Buyer’s Guide from Mel & Zack Durham at eXp Realty Olympia

When you’re buying a home in Olympia—or anywhere in today’s dynamic market—crafting the right offer is more than just deciding on the purchase price. Two powerful tools you can use in negotiations are asking the seller to cover your closing costs or requesting a price reduction. Both options have their advantages, but understanding how they affect your bottom line is key.

We’re Mel and Zack Durham, local real estate agents with eXp Realty in Olympia, Washington, and we’re here to help you weigh the difference and make the most strategic decision for your home purchase.

💰 What Are Closing Costs?

Closing costs typically range from 2% to 5% of the purchase price and can include:

• Loan origination fees

• Title insurance

• Escrow services

• Prepaid property taxes and homeowners insurance

• Appraisal and inspection fees

These costs are paid out-of-pocket at the closing table in addition to your down payment—so they can really add up.

📉 Option 1: Asking for a Price Reduction

Pros:

• Lowers your monthly mortgage payment over the life of the loan.

• Reduces the total amount of interest you’ll pay.

• May help you stay under a budget cap for loan approval or property taxes.

Cons:

• Doesn’t help much with cash upfront.

• Could result in a minimal difference in monthly payment—especially with smaller reductions.

Example: A $10,000 price reduction on a $500,000 home could save you roughly $55/month on your mortgage (depending on rates and loan terms). That’s great long-term—but doesn’t help with upfront expenses.

💵 Option 2: Asking the Seller to Cover Closing Costs

Pros:

• Reduces your immediate out-of-pocket expense, which means more cash on hand for moving costs, repairs, or furniture.

• Can make homeownership more accessible for buyers with limited liquid funds.

• Works well in FHA, VA, or USDA loans where you may already have a low down payment.

Cons:

• Sellers may prefer a price reduction over paying buyer costs (so presentation and market knowledge matter).

• Raises the effective offer price, which must still appraise for the full amount.

Example: If you offer $510,000 on a $500,000 listing with $10,000 back in closing costs, the seller still nets $500,000—but you don’t have to bring as much cash to the table.

🎯 Which One Is Right for You?

It depends on your goals, financial situation, and the competitiveness of the market.

• If you’re tight on cash: Asking for seller-paid closing costs helps more.

• If you’re in a strong cash position and plan to stay in the home long-term: A price reduction could save more in interest over time.

• In a competitive market: A price reduction might be more appealing to sellers looking for a cleaner offer.

• In a buyer’s market: Sellers may be more open to concessions like closing costs to secure a deal.

🗣 Our Advice as Local Agents

We’ve helped dozens of buyers in Thurston County and throughout the South Sound area navigate this decision. The truth is, both strategies can be win-wins, if used wisely. Let’s talk about your goals and tailor a negotiation approach that works best for you.

📍 Looking to buy in Olympia or nearby?

Let us be your guide.

Mel & Zack Durham Licensed Real Estate Brokers eXp Realty | Olympia, WA 📧 melandzack@pnwhomesgroup.com 📞 360.481.2073