05/13/2025
If you haven’t heard of concessions before, let us break it down for you! 👇
Concessions are financial help offered during a real estate transaction to make the deal more appealing. Both buyers and sellers can offer concessions, depending on the market. Here’s how it works:
✨ Buyer Concessions: Buyers might offer concessions to stand out in competitive markets, such as offering flexible transaction terms or absorbing some seller costs. Buyer concessions were very popular in the housing boom of 2020.
✨ Seller Concessions: These are financial incentives that sellers offer to ease the buyer’s upfront costs. Common examples include:
- Closing Costs: Fees like title insurance, recording fees, and more.
- Mortgage Related Fees: Loan origination fees, appraisal costs, or interest rate buydowns.
- Home Inspection Costs: Covering the fee for examining the property for issues.
- Repairs: Handling the cost of necessary repairs uncovered during the inspection.
- Prepaid Items: Property taxes or HOA fees paid in advance.
- Homeowner’s Insurance: Helping with the cost of insuring the property.
🛑 Limitations to Seller Concessions:
- They cannot be used for your down payment.
- You won’t receive the amount as cash at closing.
- There are limits on how much can be contributed, depending on your loan type
For example, in today’s market, sellers might cover your closing costs or contribute to repairs, making homeownership more affordable. Understanding these concessions can make all the difference when writing or negotiating an offer.
If you have questions or want advice on navigating concessions in your home buying or selling process, feel free to reach out, we’ve got you covered!