When you’re buying a home in Salt Lake City, negotiation doesn’t just mean “lower the price.” There are multiple ways to structure a deal — and understanding the difference between asking for a price reduction and asking for a seller concession can significantly impact your out-of-pocket costs.
Both strategies lower your overall financial burden, but they work very differently. Let’s break it down.
What Is a Price Reduction?
A price reduction is exactly what it sounds like: the seller lowers the purchase price of the home.
Example:
If a home is listed at $750,000 and the seller agrees to drop the price to $730,000, that $20,000 reduction lowers:
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The loan amount (if you’re financing)
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Your down payment (if it’s percentage-based)
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Your long-term mortgage balance
What a Price Reduction Does Well
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Lowers your loan amount
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Reduces the total interest paid over time
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May slightly reduce your monthly payment
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Helps with long-term equity positioning
However, the monthly savings from a price reduction are often smaller than buyers expect.
For example, a $10,000 price reduction may only lower your monthly payment by roughly $60–$80 depending on your loan terms. Helpful — but not dramatic in the short term.
What Is a Seller Concession?
A seller concession is when the seller agrees to cover certain buyer costs instead of lowering the purchase price.
This money typically goes toward:
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Loan origination fees
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Title and escrow fees
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Prepaid taxes and insurance
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Mortgage rate buy-down
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Other closing costs
Instead of reducing the price, the seller contributes funds at closing.
Example:
On a $750,000 home, instead of reducing the price by $20,000, the seller gives a $20,000 concession toward your closing costs or interest rate buy-down.
Why Seller Concessions Often Save Buyers More Money
Here’s where it gets strategic.
1. Lower Cash Needed at Closing
Concessions directly reduce your upfront out-of-pocket costs.
In today’s Salt Lake market, closing costs can easily reach tens of thousands of dollars. A seller concession can dramatically reduce what you need to bring to the table — which is often more impactful than a slightly lower purchase price.
2. Rate Buy-Down Power
This is where concessions can really shine.
Instead of just lowering the price, you can use seller concessions to buy down your interest rate, potentially lowering your monthly payment far more than a price cut would.
For example:
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A $15,000–$20,000 rate buy-down may reduce your monthly payment by several hundred dollars.
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A $15,000 price reduction might only reduce your payment modestly.
Over the first few years of ownership, that difference can add up significantly.
3. Better Short-Term Flexibility
For many buyers, especially in a higher price range like Salt Lake County’s average, liquidity matters.
Keeping more cash in your account:
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Provides a safety cushion
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Allows for furnishings or renovations
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Reduces financial stress after closing
A concession improves your immediate position. A price reduction improves your long-term balance sheet — but doesn’t change your upfront costs as much.
When a Price Reduction Makes More Sense
There are situations where a price reduction is the smarter move:
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The home is clearly overpriced relative to comps
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Appraisal value is a concern
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You’re putting a large amount down and want to reduce your financed amount
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You plan to stay long-term and prioritize lifetime interest savings
A price reduction strengthens your equity position from day one.
What’s Better in the Salt Lake Market Right Now?
In today’s Salt Lake County market — where homes are still selling, but negotiation room exists in certain segments — seller concessions are becoming a powerful tool.
Especially when:
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Interest rates remain elevated
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Buyers want payment flexibility
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Sellers want to preserve perceived market value
In many cases, a concession structured strategically will save you more real dollars in the short to mid-term than an equivalent price reduction.
The Bottom Line
A $20,000 price reduction and a $20,000 seller concession are not financially equal — even though the numbers look the same on paper.
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Price reduction = long-term equity benefit
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Seller concession = short-term cash and payment benefit
The best strategy depends on your financial goals, time horizon, and loan structure.
If you’re thinking about buying in Salt Lake City and want help structuring an offer that truly benefits you — not just “sounds good” — I’m happy to walk through the numbers with you and build a strategy that fits your situation.
