Seller Concessions (also referred to as Seller Contribution) is when the Buyer asks the Seller for a financial contribution towards their closing costs, escrows and/or pre-paids.    

Buyers may be caught off guard when first speaking to their Lender and learning the associated closing costs involved in buying a home.  They must prepare by saving enough money for not only a down payment but also to take care of the closing costs and an earnest money deposit too. Without the Seller Concession Buyers may have to wait and save more in order to purchase a home.The Seller Concession allows the Buyer to finance their closing costs into the mortgage by requesting approximately 3% for closing costs from the Seller.

What the Seller should consider is what they will NET from the sale.  If the concessions bring the Seller’s NET to below a level the seller is happy with there is always the possibility to negotiate up in price.  (The Buyer increases their purchase price to compensate the Seller for the concessions) This allows the Seller to SELL while still being able to achieve the “NET” they are looking for.

Buyers have many hurdles to get over in becoming pre-approved through a Lender.  The Seller Concessions allows more Buyers to purchase, turning potential non- prospects into strong and able Buyers!!