Home Buying in 11422>Question Details

Yardy, Home Buyer in Queens, NY

what is owner concession mean in Queens,ny?

Asked by Yardy, Queens, NY Wed Sep 23, 2009

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Ralph Windschuh’s answer
Hi Yardy: If you're buying a house, congratulations. It's a great time to buy. If you're considering making an offer on a property with a "seller's concession", I would assume that you are borrowing some of your closing costs along with the price of the house. Closing costs usually total between 4 to 6% of the amount you borrow - expect 6% most of the time. Let's use a simple number like $100,000. If you are financing half of your closing costs (3%), the amount financed would be approximately $103,000 and the house would therefore have to appraise at $103,000 instead of $100,000. The reason they call it a seller's concession is that the owner is willing to "concede" that the house is worth more than they are getting. I hope this helps. If you have any other questions, please feel free to contact me.

Ralph Windschuh
Century 21 Princeton Properties
1 vote Thank Flag Link Thu Sep 24, 2009
Hi Yardy. Are you referring to a "Seller's Concession"? This is typically a credit given to the buyer at the time of closing. For example: A buyer may ask for a concession as a percentage or a flat dollar amount. These concessions usually used to offset the buyer's closing costs, but may also be used to negotiate items of concerns from Home Inspection, etc. It is important to remember that the house must appraise for the full purchase price. Example: your home is listed for $100k. A buyer offers you $102k, less a 3% concession. Your net selling price is therefore $98,940 (102,000-3%), however the house must appraise for $102k.

Robert Greenblatt
Keller Williams
0 votes Thank Flag Link Wed Sep 23, 2009
Basically, it means that in the final purchase price, the owner/seller will include a rebate or payment or allowance for expenses for the buyer. As an example, if you purchase a home FHA.....you can invest 3 1/2% of the purchase price as your down payment....and the seller can give you an "allowance" of 6% of the purchase price for closing costs. It's an awesome way to get into a home if you have decent credit, a verifiable income, but light on cash. Just know the home must appraise for the final/total purchase price.
Jo-Ellen Ashby
Vice-President, NY Region
Weichert Realtors
845 782 4646
0 votes Thank Flag Link Wed Sep 23, 2009
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