Seller Concessions

Seller concessions are an agreement within a real estate contract whereby the home seller agrees to pay for some or all of a home buyer’s closing costs.

Concessions can be offered by the seller as an incentive to encourage buyers to purchase their home. Closing cost fees can add up quickly and the expense of this, on top of adown payment could be a big reason preventing someone from buying a home. Offered concessions may be more appealing than a lower price as some of the financial strain can be offset because the seller agrees to financially contribute to the closing costs.

If the home has been on the market for an extended time, or it is a buyer’s market, a seller might be motivated to offer concessions. To officially ask for seller concessions, your real estate agent will write out an offer to the seller, indicating a specific amount you hope for them to pay.

Seller concessions are a useful tool in real estate. Used correctly by the seller, it increases the marketability of their home. Buyers often can’t afford to put more money down than they have allotted which turns them away from considering a home. With a concession from the seller in the form of either paying the buyer’s closing costs or paying points to get an FHA or VA loan, (for example) a deal could be done.

Always work with an experienced realtor who will be able to give you all the information about the market, local sales, and the regional housing market. The realtor will be the one doing the negotiating and depending on the condition of the market they will guide you in the right direction.

The Bottom Line: When asking for concessions, the buyer should use the best realtor to help negotiate with the seller. Since they might not be willing to offer everything asked for there will need to be a compromise and a solution that works for both the buyer and the seller. In the end, this can save a lot of money as well as making the entire process of buying a home more affordable and attainable.

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