Home Buying in 61801>Question Details

Soxy, Home Buyer in 61801

Is it better for the buyer to ask for an allowance in the purchase contract or to offer less money for the house?

Asked by Soxy, 61801 Sun Jun 19, 2011

The house I'm considering buying doesn't have a fenced backyard, but I would like to fence it right away (for my dog). Should I ask for a $2,000 "fencing allowance" or should I deduct $2,000 from the purchase price?

Help the community by answering this question:


I always tell my buyers that the sellers are looking at their net proceeds. So, it doesn't matter to the seller whether you come to an agreement with concessions or less price, the seller is looking at what they get in the end.

However, for you it does make a difference. If you go with a lower price, it is less money that you will have to owe the lender over time, and less interest. But, if you go with the allowance or concessions that makes an immediate impact on your bank account now. With the low interest rates that we are seeing now, many of my clients are opting to get concessions.

Be cautious on how you word and receive the concessions or allowances from the seller. As lending practices have changed, many lenders do not like to see concessions on the contract. An experienced Buyers Agent will know how to best deal with this issue.

If you do not have an agent and have more questions, feel free to contact me directly. Hope this helps.

Eric Nurmi
RE/MAX Realty Associates
Web Reference: http://www.EricNurmi.com
1 vote Thank Flag Link Sun Jun 19, 2011
Hello Soxy,
It really isn't a repair issue with the home that you are requesting the allowance for as not every potential buyer would want a fenced in backyard. I suggest that discuss this with your agent and submit an offer that you feel comfortable with along with an explanation of why you are offering this amount due to your need for a fence.
You agent should be able to tell you what the seller purchased the home for to determine if there may be some negotiating room on the price. They also can tell you what similar homes have sold for in the neighborhood to see if your offer would be comparable.
Good luck!

Laura Feghali
Prudential Connecticut Realty
1 vote Thank Flag Link Sun Jun 19, 2011
Generally speaking: if you have plenty of money to buy the house, pay the closing costs and fence the yard and do whatever else you need to do with your new house, offer a lesser price. On the other hand, if you are tight on cash a credit from the seller for all or a portion of your closing costs can potentially leave money in your pocket that you can use to put up your new fence.

What does your agent advise?
0 votes Thank Flag Link Mon Jun 20, 2011
It is better for the seller if you lower your price by $2000, and will also be slightly better for you. Several fees and taxes are based on the sale price, so a lower price means less fees. As an example, if the seller is paying 6% commission, the extra $2000 will cost him $120 on the extra commission alone. For you, things like title insurance will be slightly higher and depending on your state, you may have slightly higher taxes.

It is not a big deal and most sellers are fine paying that extra amount, so I would do what works best for you.
0 votes Thank Flag Link Sun Jun 19, 2011
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