As a home seller you have options when deciding how to market your property. One of the options that you have is offering concessions to make your property more attractive to buyers.

What is a seller’s concession in a home sale and how do concessions work? A seller’s concession is when the seller pays for a certain cost that is typically a buyers cost. When a seller does this it can make their property more attractive to a buyer. Concessions can also help to make home buying more affordable for a buyer. For example, the seller could pay $5,000 for the buyer to buy down the interest rate on the buyers loan. The seller could also agree to pay for the buyers loan closing costs. The seller should be specific on the dollar figure that they will pay towards these costs.

Concessions help buyers

How do seller’s concessions work? Concessions can be advertised upfront or negotiated as a part of the home purchase agreement. In a written offer, the buyer will request a specific amount that will be credited to the buyer at closing. The buyer needs to know they will be receiving a credit on their settlement sheet at closing, not a check. The sellers concession will be a cost to the seller on their settlement sheet.

Not all concessions are helpful

Concessions can make the home more affordable with the buyer using them to buy down the interest rate. The sellers concession can also pay loan closing costs. Another possible concession is to make the home more attractive to a buyer. This can be in the from of a dollar figure towards replacement of carpet, as an example. This concession may not help a seller sell their home. When a buyer sees a credit for carpet replacement in MLS, it gives the buyer a negative impression. This impression is before the buyer has ever even looked at the home. The buyer can wonder what else is wrong with the home. This may lead to fewer showings with buyers ruling out a home they perceive needs work.

Sellers should know there’s a limit to the amount that can be offered as a concession to a buyer getting a loan. When planning a concession credit to a specific buyer, it is wise to speak with the buyers lender first. The lender can address the verbiage to appear in the contract and the total amount that can be provided.

Sellers can use sellers concessions to make their home more affordable and more attractive to buyers. A sellers concession maybe more affect than a price reduction. The concession could make it possible for a buyer to buy a home they might not otherwise to able to afford. Sellers should talk with their agent to weigh options and develop a strategy that can get their home sold.