Understanding Seller Concessions

Good morning, one term you may hear during your home buying or selling process is seller concession. Seller concessions can be beneficial for all parties in a real estate transaction. A seller concession is an agreement between the buyer and seller in which the seller agrees to covers a portion of the buyer's expenses. Please keep in mind, this is not something the seller has to agree to. Some sellers can and will refuse to pay any concessions at all. Yet, it never hurts to ask. Nicely.

A home buyer's agent can ask for seller concessions during different times in the home buying and home selling process. For example, once the inspection has been completed, the buyer can request that the seller pay for certain repairs. This however, does not mean that the seller will do so. Still, while the seller may opt to pay for certain items, the seller may also refuse to pay for others. Below, are a few things to know about seller concessions:

• Seller concessions can include appraisal fees, Loan origination fees, home inspection and title policy, credit report fee, tax fee, discount point charges and more.
• Your agent will be the one negotiating on your behalf
• Seller concessions are more likely in a buyers' market than in a sellers' market.
• Concessions benefit both buyer and sellers
• Seller concessions helps to reduce the upfront cost the buyer need to pay.
• Seller concession may help a home to sell more quickly.
• For conventional loans with down payment less than 10% the seller concession can be up to 3%. With down payment between 10% and 25% concession can be up to 6% and 9% if your down payment is 25% or more.
• FHA have a maximum concession amount of 6% of the purchase price. This cannot be applied to your down payment.
• VA loan limit seller concession to no more than 4% of the purchase price
• USDA home loan limits seller concessions to 6% of the purchase price.
• Your mortgage lender needs to approve seller concession.
• Seller concession can cover either specific costs or pay a fixed amount of the total closing cost.
• There are no guarantees that the seller will pay any seller concessions.
• The seller is the only one that can make the decision to contribute or not to contribute.
• Seller concession cannot be used to pay down payment.

If it matters to you, it matters to us. We are always looking out for your best interest. As always, thank you so much for stopping by, and remember, if you are thinking of purchasing your new home, or selling an existing one, please give us a call. We are here to help. We have been helping home buyers and sellers since 2011. Until next time...Diana

Image by: Diana Walton

Astor & Eaton Realty
Diana Walton
Real Estate Broker
713.208.8013
Write to Diana Walton at homes@astoreaton.com
https://www.astoreaton.com

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