Savvy real estate investors and buyers ask for Seller Concessions, not price reductions… here’s why..

A seller concession is when a seller agrees to pay all or a portion of a buyer’s closing costs; a price reduction is simply when a seller reduces the sale price of the home. If a seller chooses to offer a $10,000 seller concession or a $10,000 price reduction, it effectively nets the seller the same amount once the home sells. However, there is a drastic difference in how each of these affects a buyer.

A seller concession directly reduces the amount of money a buyer must bring to closing to buy a home. Seller concessions can be applied to a multitude of closing costs, including but not limited to loan origination charges, title expenses, appraisal costs, taxes, insurance, discount points, mortgage insurance, etc.

Therefore, if a buyer has $10,000 in closing costs and were to receive $10,000 in seller concessions, the concessions would effectively keep $10,000 in the hands of the buyer post-closing. This money can be used to improve the property, bolster savings, make other investments to diversify your portfolio or prepare for your next real estate purchase. The fact of the matter is, it’s your money to use however you wish.

Given most buyers utilize financing for their purchases, a price reduction will only fractionally reduce your out-of-pocket costs at closing and minimally reduce the monthly payment on the loan. That is why Savvy real estate investors and buyers ask for Seller Concessions, not price reductions.
Mortgage Smarter, not harder.

“ Eric Miller Mortgage Lender At Spire Financial @Mortgagesmarter”

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