what are seller's concessions and when should my seller offer them?

Asked by Gitti Barrell, Buffalo, NY Fri Nov 4, 2011

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Anna M Brocco, Agent, Williston Park, NY
Fri Nov 4, 2011
Ask your agent and or loan officer for a detailed explanation; a sellers concession occurs when the parties have come to an agreement as to the selling price, but the purchaser is short on closing costs--the seller then agrees to add a percentage to the agreed price and gives back that percentage at closing to cover all or some of your closing costs--your mortgage will reflect that percentage--therefore, the property must appraise for the higher amount.
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Gail Gladsto…, Agent, 11743, NY
Fri Nov 4, 2011
Gitti, a seller concession is a way for the buyer to pay the closing costs without having to reach directly into their pocket for cash.

If the house sells for $200k and closing costs are expected to be about $4k, the sale price will reflect $204k.

The Seller "pays" the closing costs, so their taxes are a wash (they won't pay any extra tax as a result of the higher sales price because the "cost" to close wipes it away).

The buyer will have a mortgage reflecting the higher sales price, so they are being an opportunity to finance the closing costs inadvertently.

If you are still finding it confusing, feel free to give me a call at 631-425-6150...verbally is sometimes easier than writing it all out.
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Sally Grenier, Agent, Boulder, CO
Fri Nov 4, 2011
Really? Seller concessions = money for closing costs. The Contract to Buy should spell it out. Usually a dollar figure. I wouldn't have seller offer them. Wait for buyer to ask for them in the contract!
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Terry Bell, Agent, Santa Rosa, CA
Fri Nov 4, 2011
Well, I guess it depends what State and what area you are in. Out here in California sellers often offer a 3% cash back towards non-recurring closing costs, sometimes an allowance for new carpet or if there is a pest report, an allowance towards repairs on section I work. I think it's up to the agent to decide if there is a lot of competition in the market with foreclosures and something needs to be offered to make the house more competitive and easier to get into. Best, Terry Bell, Realtor, Santa Rosa, CA
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