Opinions Needed - Buyer Consession for CC

We are in the process of negotiating a contract for the sale of an estate.

We just got the changes and the buyer wants to include a 6% consession to cover the closing costs and if it doesn't appraise they can get out.

Our lawyer told them to get the appraisal first as we would not sign without it saying if it doesn't appraise they are locked in.

Anyone have any experiences with this?

Do you recommend have us require a mortgage approval prior to signing?

Any info. is appreciated.

TIA Maria

Re: Opinions Needed - Buyer Consession for CC

We had a concession to cover closing costs in our contract......we bought an estate sale. Ours stated that if the house did not appraise for the sale price we could get out but if the house did not appraise for the sale price plus concession we could not get out of the contract.

As far as a mortgage pre approval......you Can ask for one but it is still no guarantee they will get the mortgage and a standard real estate contract has an out for failure to obtain funding.

Re: Opinions Needed - Buyer Consession for CC

We did a Consession for both hosues we bought. First house they didnt give us a problem at all but second house the sellers were hestitant bc of the apprasial. However the attorneys worked it out and it was no problem.

Good luck

Re: Opinions Needed - Buyer Consession for CC

I could accept those terms.

However I would make it clear to the buyers that with that kind of clause, I would continue to show the house while in contract and if somebody else comes in with a stronger offer, we can terminate the contract with no damages paid to the buyer. Buyer would lose their application fee to their bank, and probably their appraisal fee too.

You have to pay to play IMO.

Re: Opinions Needed - Buyer Consession for CC

we did a conssession but it was much smaller and we gave them a pre qualify letter. the bank wouldn't give us a mortgage commitment until we had fully excuted contracts, which in your case you won't give them yet

get the apprisal done (at buyers cost). if it apprises right move fwd as long as they give you a pre approval letter.

Re: Opinions Needed - Buyer Consession for CC

I would definitely have the preapproval letter done as well as have the buyers pay for the appraisal.

Re: Opinions Needed - Buyer Consession for CC

We just sold our house and gave the buyers the max allowed for closing costs. They had the appraisal done before we went into contract. It all worked out, the appraisal came in exactly the right amount including the closing costs.

Re: Opinions Needed - Buyer Consession for CC

Thank you very much for all the feedback!

The lawyer sent an e-mail saying that the buyer thinks our terms are fair - having them get the appraisal first and they are locked in after they sign.

I do think the house will appraise for the amount they need it to its just another annoyance.

Also, the lawyer said we can't get a committment until the contract is signed.

Maybe I'm using the wrong term -we got an offical pre-approval and not just a pre-qualification. Maybe that is the difference. I'll have to ask the lawyer about this...I could have sworn we got this before the contract was signed

Re: Opinions Needed - Buyer Consession for CC

a pre-qual is based off what the buyer tells the Loan Officer- no credit is ran

worthless

a pre-approval - using credit and paystubs - doesn't mean they will def get a mortgage- but it's closer

a comminment to lend is after you are in contract- the file is sent to underwriting

this is the final stage