In a hot market with multiple offers, concessions are rare because buyers are willing to pay full price with minimal negotiations. Misunderstanding these rules can lead to delays in funding or unexpected costs just days before moving into the new home.
Understanding Buyer Closing Costs Concessions and Coverage
They are recorded in the closing disclosure documents and must adhere to specific limits set by loan programs. The goal is to make the purchase more attainable without altering the actual purchase price of the home.
Buyers must review the Good Faith Estimate and Closing Disclosure forms carefully to ensure the concession is applied correctly. Essentially, a seller concession is a financial contribution from the home seller to the buyer that covers some of the buyer’s closing costs or prepaid expenses.
Understanding Buyer Closing Costs Concessions and Coverage
Assumption or payoff of an existing seller lien or mortgage. For instance, with conventional loans, the seller might be allowed to contribute up to 6% of the purchase price toward the buyer’s costs.
More About What does seller concession mean in real estate
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