They jumped from 51% to 66% of Phoenix sales in a year. Whether you're selling or buying, here's what a concession actually is and how to plan for it.
Everybody’s got an opinion about the Phoenix market right now, and most of it comes from national headlines.
So let me cut through the noise with a number that’s actually happening on the ground, on real deals, right here in the Valley: a year ago, according to Redfin, about half of Phoenix home sales closed with a seller concession. Today it’s closer to two-thirds. Nationally, concessions just hit the highest share on record, and Phoenix is climbing even faster than the country as a whole.
First, what a concession actually is. If you’re not sure, you’re not behind, because most people picture a price cut, and that’s not it. A concession is when the seller agrees to cover something on the buyer’s side of the deal.
That might be a chunk of the buyer’s closing costs, a repair credit for something the inspection turned up, or the increasingly popular one: paying to buy the buyer’s mortgage rate down so their monthly payment drops.
The money comes out of the seller’s proceeds, but it’s structured as help toward the buyer’s costs, not a reduction in the sale price. That distinction matters, and I’ll come back to it.
Why they’re back is no mystery. For a couple of years, Phoenix was a frenzy where buyers waived everything just to win. That’s over. Inventory has grown, homes under a million have softened a couple of percent, and buyers have options and time again.
When buyers have room to push, they ask for help, and right now sellers are saying yes to keep deals together. That’s the whole story behind the number.
For sellers, the mistake is not planning for it. Here’s what catches people off guard: you can price your home perfectly, get a solid offer, and still watch a concession request show up after the inspection, and it comes straight out of what you walk away with. More than half of mid-range Phoenix homes, roughly the $200,000 to $600,000 range, are closing with one right now.
So if you’re selling, you shouldn’t be asking whether a concession might come up. You should be planning for the possibility that it will. That means knowing your bottom-line net before you list, not after, and pricing with a little room to give without going underwater on your own goals.
A concession you saw coming is a negotiating tool. A concession that blindsides you is just lost money. The sellers who do well this year are the ones who ran the math up front.
For buyers, this is real negotiating power, but it has rules. If most sellers in your price range are already offering concessions, you’re not being greedy by asking, you’re doing what the market is doing. The smartest use of a concession right now is often a rate buydown, because knocking your interest rate down can save you more month to month than an equivalent price cut would.
But there are limits worth knowing before you write the offer. How much a seller can contribute is capped by your loan type, generally somewhere between 3% and 6% of the price depending on the loan, and your position is strongest at specific moments, on your initial offer when a home has been sitting, and again after the inspection.
Ask for the wrong amount or at the wrong time, and you weaken an otherwise strong offer. Ask smart, and you can meaningfully lower what it costs you to own the home.
Here’s the takeaway on all of it. Concessions aren’t a sign the market is falling apart, and they aren’t a loophole. They’re just how a lot of Phoenix deals are getting done right now, and the people on both sides who understand them are the ones coming out ahead.
The national numbers are a starting point. What actually matters is your price range, your neighborhood, and your situation, because an Arcadia deal and a deal out in the far West Valley can look completely different.
If you want to know what’s realistic for your specific move, whether you’re selling or buying, reach out, and I’ll walk you through the real numbers. Call or text me at 602-502-6468, email me at bret@rngaz.com, or visit realestatewithbret.com. Bring me your situation, and I’ll tell you exactly how these deals are getting done on your street.
