Even in a low inventory market there is still a lot of room for negotiation when closing a transaction between buyers and sellers. Seller credits and concessions are often the way a deal can close smoothly with both sides being satisfied. Understanding what type of concessions are available helps a buyer know where they may have room for negotiation, even once the property is in contract. These concessions can range from easing the financial burden of the buyer, pay to fix needed repairs, cover tax and HOA fees and much more.
The most common concession in recent years is a credit from the seller to the buyer at closing to buy down the interest rate of the buyer's loan. This money comes from the seller's closing proceeds and can help taper the interest rate of the buyer for the first few initial years of the loan. This is mutually beneficial because the seller can solicit a higher asking price and the buyer can start with lower monthly payments on the very first month of ownership.
The most important consideration to maneuver is what kinds of seller credits and concessions are compatible with the lender issuing the mortgage. Lenders often have guidelines for the maximum seller credit allowed, so it is helpful to work with an experienced agent to understand how to best structure and coordinate this credit. I have successfully helped many buyers negotiate credits with sellers that helped them get into the home of their dreams and be set up for success from the first day they move in.
Dean Powell
Keller Williams Realty Danville
CA DRE # 02108792
925-765-8584