It's hard to hear that the buyer wants a lower price after you've started planning around the sale proceeds. You agreed on a number, made the building available for inspections and expected the next conversation to be about closing.

I wouldn't split the difference simply to keep the escrow alive. A concession is worth considering when it addresses a real problem and leaves you with a better outcome than the alternatives. If it only postpones the next request, you've given up money without getting much closer to a sale.

The useful starting point is what changed after the offer. Newly discovered damage, inaccurate income and a buyer who no longer likes their financing are different negotiating problems. Treating them all as a repair allowance gives the buyer too much room to choose the number.

An old roof isn't the same as newly discovered damage

If the buyer knew the roof was old before making the offer, its age alone is a weak commercial reason to lower the price. But a later inspection that finds concealed damage can change the cost of owning the building. Saying "you knew about the roof" doesn't answer that finding.

The repair scope matters more than the size of the demand. A bid to correct a defect and a bid to replace an entire system can both look official while describing very different work. Optional improvements belong to the buyer's plan for the property, not automatically in your concession. A qualified contractor or engineer can establish what the finding actually requires; choosing the cheapest opinion without resolving the scope doesn't help either side.

A supported repair cost gives the negotiation a basis. It doesn't determine, dollar for dollar, what you must give up. The agreed price, what was known beforehand and the work the buyer will inherit all matter. Urgent safety or active damage concerns still need attention while that discussion continues.

For a sale that hasn't started yet, the sale preparation guide explains how to address known issues before they become late surprises.

A change in income deserves more weight than a change of mind

If the rent roll shows income the building isn't collecting, that can affect both the buyer's return and the lender's view of the property. It deserves a substantive response. If the rent and expense information is unchanged but the buyer now wants a better return, the negotiation starts from a different place.

The comparison has to use the same units and reporting periods. A newer expense estimate isn't proof that an earlier operating statement was wrong. Conversely, calling every difference a buyer assumption won't fix an inaccurate income figure. Fannie Mae's multifamily guidance calls for investigating unexplained changes in operating statements and rent rolls, and requires supporting detail for adjustments to historical statements. [1] The guidance doesn't govern every loan, but it shows why an income discrepancy can reach beyond the buyer's own calculation.

That is also why apartment building due diligence can change a price discussion. The strongest seller response explains the specific difference. Another assurance that the building has always performed well won't resolve it.

A smaller loan, by itself, doesn't establish that the price should come down. The buyer may be able to contribute more equity. If the property information holds up and the shortfall comes from the buyer's original financing assumptions, I would press for that contribution before offering a concession. If the lender has identified a genuine property problem, the response has to address that problem too. A lower price won't necessarily satisfy an outstanding repair requirement.

Read the figure as text

New physical damage

Commercial judgment: Evaluate the necessary repair; Why it matters: Another buyer may find it too

Income proves lower

Commercial judgment: Address the actual discrepancy; Why it matters: Value and financing may both change

Loan comes in smaller

Commercial judgment: Consider the buyer's added equity; Why it matters: Seller price need not fund every gap

Buyer wants an upgrade

Commercial judgment: Separate preference from the defect; Why it matters: An improvement is not automatically your cost

A concession should resolve more than today's disagreement

Before giving up money, I want to know whether this is the buyer's last identified objection or simply the first one they've priced. Settling the roof while income and financing remain unresolved can leave you negotiating the same sale again. A buyer doesn't need to promise that nothing unexpected will ever happen, but known objections should be part of the same discussion.

The requested amount also deserves a close look for overlap. Repair cost and lost income may be separate consequences of a defect, or the buyer may be counting the same loss twice. Splitting the total in half doesn't correct a flawed calculation.

A lower purchase price may be simpler than asking you to manage work before closing. A closing credit can leave the buyer responsible for the repairs, but only if it works with the financing. The DRE escrow guide directs the parties to communicate negotiated credits to escrow for amended instructions and lender approval. [2] A credit the lender won't accept can leave the sale stuck despite an agreement on the amount.

Seller work carries its own risk. You remain responsible for arranging access, completing the agreed scope and dealing with the schedule if the job runs late. A holdback can leave some of your proceeds tied up after closing; release conditions and responsibility for overruns need to be settled before it becomes a workable alternative. Neither should be treated as an inexpensive substitute for a price reduction just because the headline price stays intact.

Read the figure as text

Lower the price

Seller tradeoff: Less sale consideration; What makes it workable: Buyer can close on the revised terms

Closing credit

Seller tradeoff: Less cash at closing; What makes it workable: Lender approval and amended instructions

Complete repairs

Seller tradeoff: Seller manages cost and timing; What makes it workable: Agreed scope can finish on schedule

Hold back funds

Seller tradeoff: Some proceeds remain tied up; What makes it workable: Release and overrun terms are settled

Decline the cut

Seller tradeoff: Current sale may remain unresolved; What makes it workable: Contract position and alternatives support it

Going back to market has to be a better business decision

If the finding is real, a new buyer may raise it too. Starting again doesn't make the report disappear. Another sale may involve the same repair discussion after you've paid for more time owning the property.

That doesn't make every reduction worth accepting. A buyer asking for a concession unsupported by the building's condition or income may leave you better off pursuing an alternative, if your agreement permits it. The comparison is between the revised sale and a realistic next sale, including income collected while you wait, ongoing expenses and any work still needed. An earlier expression of interest is weaker than a current, supported backup offer.

Before acting on an alternative, have your current representative and a California real estate attorney review the actual agreement and notices, including contingency status, deadlines, cancellation, deposit treatment and later disclosure obligations. A price request isn't a basis for assuming the contract ended or its deadlines moved.

Escrow is neutral, and a disputed deposit may remain unreleased or require court involvement. [2] That money isn't available to fund your next move merely because you believe the buyer is wrong.

I would accept a measured concession when it addresses a substantiated issue, makes the closing workable and leaves the owner better off than restarting. I would resist a cut that still leaves the buyer unable to fund or the major objections unsettled. The time you've already spent in escrow is frustrating, but it doesn't make an unfinished deal worth saving at any price.

If you want to talk through what a price-cut request means for your building's sale, contact Don. Any discussion of an active escrow should include your current representative.

Sources

[1] Fannie Mae, Multifamily Selling and Servicing Guide, effective February 12, 2025, Part II, Chapter 2, Section 203.01. Agency guidance on operating information.

[2] California DRE, Surviving the Real Estate Escrow Process in California, RE 23, Rev. 3/14, sections B.8, B.9, B.11, B.25 and C.7. General escrow guidance, not a determination of rights under a particular agreement.

This is for general informational purposes only. Consult with your CPA, tax advisor, and/or attorney for guidance specific to your situation.