What Sellers Should Know About Seller Concessions
Seller concessions are closing costs that you have agreed to pay on the buyers behalf. Sometimes buyers will ask for a specific dollar amount, otherwise they may simply ask for a percentage.
Offering concessions is a great way to attract more buyers, thus resulting in an accepted offer more quickly.
As the seller, you are not obligated to agree to offering them. If you're unsure about whether you can offer them or not, talk to your real estate agent and they can walk you through the scenario.
An important fact to note, if you do offer seller concessions, the appraisal must align with the sales price of the home. If the value comes in lower, you'll need to re evaluate the sales price. Your agent and the buyers agent will work together to get this handled.
Some awesome ways for buyers to apply your concessions:
Rate Buy-Downs (i.e. they can buy their rate down for the first year of homeownership, and then it will increase to what the note rate is the year after)
Rate Discount Points (i.e. they can buy down their rate to something cheaper)
For Government Loans (FHA, VA, and USDA) they can pre pay the up front mortgage insurance premiums
Pay their prepaids (homeowners insurance, property taxes, possibly HOA fees if applicable)
Pay off consumer debt (VA only)
Food for thought. If you can't offer seller concessions, that is totally fine! At the end of the day, you'll still move forward in your home selling journey. If you are able to offer them, know that the buyer appreciates it very much as some people need the extra assistance, and offering seller concessions is a great way to help them, but to also help you sell your home faster!
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