This is one of the most frequently asked questions of real estate agents. Everyone wants to know what the market is like. Is the current market favoring sellers or buyers? In our current market, in Northern Colorado, buyers are more likely to get concessions from sellers than we have seen in the past. This is because inventories are rising. It seems like every day the number of new listings coming on the market is exceeding the number of homes that have gone under contract. When the market has more homes for sale than the demand, buyers may be able to get concessions. These can be paid closing costs, mortgage rate buy-downs. It is possible that the buyer can choose what is most important in their situation and get the seller to provide that concession.

What is a concession?

What is the definition of a concession? A concession is when a seller gives the buyer some extra help to purchase the home. This extra help is typically more than just reducing the price of the home. Another way to say it is: a concession occurs in order to reach a compromise and close a deal.

Builders are offering help to buyers too

Builders are sellers too, and they can also offer concessions to buyers. They like to call their concessions, incentives. These incentives, that a builder can offer, can include upgrades or appliances that are not usually included. An example would be a builder that includes the fridge, washer and dryer as apart of the sale. Another incentive that can be offered is with closing costs and /or mortgage rate buy-downs. A builder is willing to offer concessions or incentives in order to avoid sitting on inventory. Inventory that is sitting and not selling is costing a builder every month.

Concessions can make a difference

For buyers, getting any of these incentives or concessions included can be a big deal. Especially if the buyer is on a tight budget. These concessions can save on the monthly payment for a buyer or help reduce the upfront costs associated with the purchase of a home.

The market is not in trouble

This isn’t a sign of trouble in the market, it is rather, an opportunity for buyers. Concessions do not always mean a big discount. While more sellers are compromising on price, that is not always what they do to make a sale happen. Sometimes it is as simple as the seller paying for repairs, leaving appliances behind or helping with closing costs. These small things for the seller, can make a difference in a buyer being able to purchase their home or not.