What Are Seller Concessions?
Oftentimes, the best real estate transactions are when both the buyer and seller feel good about the transaction. In any transaction, most people are looking to maximize their bottom line and don't want to leave money on the table. Of course, the buyer wants something the seller currently has, and the seller is wanting to find a buyer, so both parties should be willing to be flexible in order to accomplish what each party wants to achieve. Seller concessions can be a strategy used by the buyers or the sellers to help get a deal done. Seller concessions are when a seller agrees to pay for something that the buyer is typically responsible for, such as repairs, closing costs, property appraisals, and more.
How do seller concessions work?
Seller concessions can be introduced at any time. For example, some sellers will offer money toward closing costs before the home is even under contract. Seller concessions can also be introduced during negotiations. An example would be the buyer asking the seller to pay for certain repairs that are indicated on the inspection report. Most of the time there is not a direct exchange of money, and adjustments are made before closing on the balance statement and written up as an addendum to the contract.
Can concessions benefit both buyers and sellers?
Mortgage interest rates have certainly slowed down the market and we are seeing a turn from it being a firm seller's market. That said, many buyers are still showing a reluctance to buy. Concessions can benefit both buyers and sellers. Buyers benefit by receiving savings that may make the purchase possible or be the financial incentive to decide to proceed with a purchase. While sellers are contributing money to closing costs or another concession, providing the concessions may be the thing that helped get their home sold, which is a huge benefit to the seller as well. The bottom line is that seller concessions, especially in the current market, are a win-win for both sides!