Seller Concessions: A Tool for Negotiation

Good Morning, Realtors!

As the market continues to fluctuate, it's crucial to equip yourself with tools that can give your clients the edge they need in negotiations. Today, let’s talk about seller concessions and how they can be leveraged based on the loan type and down payment amount.

What Are Seller Concessions?

Seller concessions are contributions that a seller agrees to make towards the buyer’s closing costs. These can include loan origination fees, inspection fees, title insurance, and other closing costs. Utilizing seller concessions can significantly lower the out-of-pocket expenses for buyers, making homes more affordable and appealing.

Seller Concession Limits by Loan Type:

1. Conventional Loans:

1. Down Payment Less Than 10%: Seller can contribute up to 3% of the purchase price.

2. Down Payment 10% to 25%: Seller can contribute up to 6% of the purchase price.

3. Down Payment More Than 25%: Seller can contribute up to 9% of the purchase price.

2. FHA Loans:

1. Seller can contribute up to 6% of the purchase price, regardless of the down payment amount.

3. VA Loans:

1. Seller can contribute up to 4% of the purchase price towards concessions, plus reasonable and customary loan costs and discounts.

4. USDA Loans:

1. Seller can contribute up to 6% of the purchase price.

Why It Matters Now:

With inventory still low and demand currently subdued, now is the perfect time to negotiate seller concessions. This strategy can save your clients thousands of dollars and make their offers more attractive. However, as the market heats up and demand increases, your clients might not have the luxury of asking for seller concessions. They may end up paying their own closing costs plus more.

How to Use This Tool:

1. Educate Your Clients: Explain the benefits of seller concessions and how they can lower their initial out-of-pocket expenses.

2. Structure Offers Strategically: Use the information above to structure offers that maximize seller concessions based on the loan type and down payment.

3. Highlight the Urgency: Emphasize that as the market demand increases, the ability to negotiate such concessions will decrease.

Partner with Us for Success:

Reach out to us to help structure your clients’ financed offers effectively. Our expertise ensures that your clients get the best possible deal, enhancing their chances of a successful purchase in this competitive market.

Let's make the most of the current market conditions and secure great deals for your clients!

Best regards,