Sellers Concession

I understand that if we ask for this,it increases the amount we mortgage, so it essentially comes out of our pocket not theirs...so do sellers ever say no to this?? What would be the reason?

TIA...

Re: Sellers Concession

hmm good question...hopefully someone could offer insight. I don't see why a seller would though.

Re: Sellers Concession

I've had customers who needed a seller's concession, and have not had a problem getting their offers accepted.

However, not all real estate agents understand the seller's concession and how it works, so if the listing agent is not comfortable with it, they may dissuade the seller from accepting the offer.

Also, as I and others have raised in other threads, the house must appraise for the full amount (what you are offering the seller, plus the closing costs you are rolling into the price). So again, if you want to offer $400K for a house, and need a 6% sellers' concession, you must offer $424K, and the house has to appraise for $424K. So that can be a problem. Seller's concession works best for homes priced under market value, for that reason. If someone wants top dollar for their house, even if you are willing to pay it, the seller's concession may be an issue when added on top of the price. You don't want to be holding your breath for the appraisal.

It's basically another complication in the whole process. If the house has a lot of interest and multiple offers, the seller's concession would probably be strike against the buyer who needs it. They may seem less financially solid than a buyer who's coming in with 20% down and does not need a seller's concession to close.

Re: Sellers Concession

bump

Re: Sellers Concession

Just one more minor thing that I forgot to add -

Under NY State law, sellers pay a transfer tax ($4 tax per $1000 of the sale price). The tax is paid on the gross (total price including the concession). So -- it's pretty de minimis -- but if the seller's concession raises the overall price by $20K, the seller pays $80 more for the tax. Often, the seller doesn't care, because it's so minor, but sometimes the buyer will pay that extra $80.

Also, what I said about the perception of being less financially sound - sometimes buyers CHOOSE to get a sellers' concession, even though they don't need it, because they don't want to wipe out their cash reserves. In that case, make sure your agent lets the listing agent know this. It can ease the fears about the appraisal, because if the house doesn't appraise with the concession, the buyers DO have the cash if necessary (so the deal doesn't hinge on the appraisal).

Re: Sellers Concession

Re: Sellers Concession