What to do when lender limits seller concessions in a short sale?

Asked by Tuan, Fort Washington, MD Sun Jan 6, 2008

My lender approved my short sale but they are only allowing 3% seller concessions. The buyer is insisting on getting 6% concession or will walk away. The lender does not allow me the seller to assist in closing costs with cash or promissory note. I am trying to find a way to get that missing 3%. We initially thought about reducing my realtor's commission and transfer it to closing costs as realtor's concession. Then I would pay my agent outside but my agent says that is against the law and her realtor will not allow it. So we are stuggling to find ways to get that missing 3%. Some ideas we thought of are:
- ask the buyers to increase the loan amount and roll the extra 3% in there. They don't want to do it.
- ask both realtors to reduce their commissions but the buyers' agent does not want to give up more than $1000. That's too little.

I want to help but I am tied by the lender's requirements. If anyone can think of a solution, please let me know. Thanks for your feedback.

Help the community by answering this question:

+ web reference
Web reference:


Jim Welden, Agent, Greenwood Village, CO
Sun Jan 6, 2008
Tuan - Why does the Buyer need a 6% concession - I do not know what the purcahse price is but most Buyer's closing costs in my area are between 1.5-3%. Most Buyer lenders today are not allowing a Buyer to walk away from closing with any cash beyond their earnest money so....why does the Buyer need 6%.

The lender is probably more focused on their net amount that they will receive so if the Buyer raised the purchase price by 3%, then the Buyer could ask for 6% in concessions and - my guess is your lender would then allow the 6% in concessions if your lender's net amount received was the same. If the Buyer is getting a good deal, then increasing the prucahse price by 3% still gets them a "good deal". If this Buyer will not budge, then at least you now know what your lender would say yes to and you can market the property accordingly - there probably is another Buyer who would be glad to make the same deal and only ask for 3% concessions. Best of Luck.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more