Home Buying in East Flatbush>Question Details

alejandrarpo…, Home Buyer in Brooklyn, NY

i need some help, if i want to buy a house that is over price can i still get sellers concession?

Asked by alejandrarpo83, Brooklyn, NY Sun May 12, 2013

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Javier Meneses’ answer
Alejandra, you can always ask a seller for seller concession. But if the house is overpriced, and your total offer, including seller concession is high, there is a greater chance that the property will not appraise for that high purchase price. In this case, the seller would have to reduce the price to meet the appraised value, or you'd have to come out of pocket more than originally expected. If the seller reduces the price, will they still allow enough seller concession that you need to make the deal work? That's the question. If the seller does not agree to reduce the price, depending on what the appraised value is, you'd be back to having to come out of pocket to make up for the difference of the appraised value and the purchase price, which could easily be the same as you paying all your own closing costs out if pocket.

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Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(631) 659-2011 Office
(516) 918-5383 Fax
1 vote Thank Flag Link Sun May 12, 2013
Your agent can better advise and negotiate, therefore consider a consultation. Although you can ask for a sellers concession, however if in fact the property is overpriced, why would you consider the idea especially with the possibility that it won't appraise exists.....
2 votes Thank Flag Link Mon May 13, 2013
Confused, Why would you purchase an over-priced house? If it is over-priced you would be wasting money on a required lender appraisal, unless the seller is willing to adjust their price to the appraised value.
1 vote Thank Flag Link Sun May 12, 2013
No Alejandrarpo, if the house is over priced, it will not aporaise and you will not get a mortgage to purchase it, even without seller's concession.

Why would you even want to purchase an over priced house and why would you agree to do so. It's absurd.
1 vote Thank Flag Link Sun May 12, 2013
When you get into contract you will need to have the sellers concession added into the total purchase price. For example if the house is listed for $550,000 and your offer of $530,000 is accepted by the seller then you and seller can potentially agree on a total price of $550,000 where by you will receive $20,000 as sellers concession towards closing costs and pre-Paids. This will be mentioned in the contract of sale. Once you submit a formal mortgage application to the lender, then shortly thereafter an appraisal will be done to determine whether the property is worth the purchase price ($550,000 in above example). From your question it seems you are pre judged the property to be over priced, whereas it will the lender appraisal that will determine that.

In case the property is not worth the full purchase price inclusive of seller concession and there is no renegotiation possibility between seller and buyer then you can also explore the possibility of Lender Credit to offset closing costs. If you want to know more about it or discuss mortgage options please get in touch with me.

Thanks

Sanjeev Ahuja, NMLS #148731
Mortgage Broker
Home Funding LLC
110 Jericho Turnpike Ste 214
Floral Park, NY 11001
Direct Phone 917-517-2552
NYS Registered Mortgage Broker, Dept of Financial Services, Loans arranged through third parties (NMLS # 885573)
0 votes Thank Flag Link Mon Jan 20, 2014
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0 votes Thank Flag Link Sat Jan 18, 2014
Dear alejandrarpo83:

Yes you can, as long as the seller agrees to it. The question becomes will the house appraise. If the house your buying is in bad condition and selling low, it will be easy to appraise even with a concession. If the property is totally renovated and the most expensive of it's kind, it may be more difficult to appraise, let alone adding on the concession. In this situation, the seller may not be willing to give a seller's concession as you suggested because it is too risky. In the end, all seller's are different and the only way you will find out is by trying.

Sometimes, here in Brooklyn, when there is a seller's concession involved, the seller's attorney may want a clause in the contract stating that if the appraisal comes up short (but for more than the net amount the seller is going to receive after said concession), the buyer would be required to make up the difference. Obviously, if the buyer cannot make up this difference, the buyer would not agree to such a clause, that can make or break a deal.

If I can be of further assistance, please contact me direct. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon May 13, 2013
Dear alejandrarpo83:

Yes you can, as long as the seller agrees to it. The question becomes will the house appraise. If the house your buying is in bad condition and selling low, it will be easy to appraise even with a concession. If the property is totally renovated and the most expensive of it's kind, it may be more difficult to appraise, let alone adding on the concession. In this situation, the seller may not be willing to give a seller's concession as you suggested because it is too risky. In the end, all seller's are different and the only way you will find out is by trying.

Sometimes, here in Brooklyn, when there is a seller's concession involved, the seller's attorney may want a clause in the contract stating that if the appraisal comes up short (but for more than the net amount the seller is going to receive after said concession), the buyer would be required to make up the difference. Obviously, if the buyer cannot make up this difference, the buyer would not agree to such a clause, that can make or break a deal.

If I can be of further assistance, please contact me direct. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon May 13, 2013
Good morning Alejandrarpo83,

Your real estate agent can always negotiate a Seller's concession for your closing costs into the purchase agreement when you make your Offer to purchase. Whether or not the Seller accepts your request for a concession is part of the negotiating process.

It seems based on your question that you're not working with a mortgage professional or, if you are, then your mortgage professional isn't very accessible to answer questions of this nature.


Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
0 votes Thank Flag Link Mon May 13, 2013
You can bid on the house that is a reasonable price and affordable to you however there maybe various people doing the same thing. Are going you asking the seller to pay the closing cost or placing the closing cost into your mortgage? You will still need to pay for an appraiser to do an appraisal.

I handle real estate in Brooklyn.

You need further assistance feel free to contact me at my phone number listed below.

Hope to hear from you.

Be well.

Thanks,

Aaron J. Eagle
718-730-0096
0 votes Thank Flag Link Sun May 12, 2013
This house sold 2012 For 140,000 they fixed everything and Now The selling price is 320,000. It is big and beautiful but The houses around it are 280,000
What sure i do?
0 votes Thank Flag Link Sun May 12, 2013
Of course you can; it all depends on the appraisal.

Appraisals are tricky in a rising or falling market, because appraisers have to use recent sales to justify the price, and if the market is up 5% over the past three months, that may not be apparent in the comps. This is why one in six appraisals (I am told) are under the contract price.

Still. Sellers underprice their homes, and bidding becomes competitive, and buyers bid more than the asking price, and these deals close. So . . . ask your agent what they think you should do, and hope for the best!
0 votes Thank Flag Link Sun May 12, 2013
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