ARE SELLER CONCESSIONS IMPORTANT?

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YES!  Seller Concessions can help a borrower qualify or the best loan programs and can make or break a deal.

Example: 103,000 list price

 $95,000 negotiated sales price/ net to seller

                             or

$100,000 negotiated sales price

   -$5000  negotiated seller concessions to pay towards buyer's closing costs

 $95,000  net to seller

The Seller is not being asked to bring a separate check to closing to pay the Buyer’s Closing Costs. This is a very common, simple Paper Credit at closing.If a seller is willing to discount the price even one dollar, then they’d just as easily be willing to give that same discount as a credit towards paying the buyer’s closing costs as they still net the same.

Meet Reserve Requirements

Loan programs require a certain amount of reserves (money in the bank after closing).With more reserves, borrowers can qualify for more loan program options

Money available to Pay Off Debt

Borrowers will have more money available to pay off debt if needed to qualify

Reach a lower LTV (Loan To Value)

Borrowers will have more money available to put down to lower the LTV to qualify for more loan program options or to meet DTI (Debt To Income) ratio requirements

Money available for Rate Reduction

Buyer will have more money available to buy down the rate if required to qualify.

Help Neighborhood Home Values

Sellers in the neighborhood can use Borrower’s higher sales price as a new comparable sale to list and their home at an even higher price, helping to increase neighborhood’s home values (i.e. Appreciation)