Seller Concessions - Are They Here to Stay?
Photo by: Toa Heftiba
Gone are the days of the frenzied market of 2020 through 2022!
As we've approached a more balanced market, terms of a home purchase have leaned towards a buyer's favor. What does this mean for you? As a buyer, seller concessions help with home affordability! The uptick in concessions is partially contributed to rising mortgage rates and rising home prices, the combination of which has pushed many buyers out of the market until things become more affordable again. The result is that the remaining buyers have more bargaining power.
Seller concessions, also known as seller contributions, are a way for a buyer to negotiate with the seller to pay for certain closing costs associated with the purchase of a home. These costs may include things like the appraisal fee, title insurance, or property taxes. The seller can agree to pay a percentage of the buyer's closing costs, which can help to reduce the amount of money the buyer needs to bring to the closing table. There are a few reasons why a buyer might choose to use seller concessions. For one, it can help to reduce the amount of money the buyer needs to come up with for closing costs, which can be a significant expense. Additionally, it can make the offer more attractive to the seller, as they may be more likely to agree to a higher purchase price if they know that the buyer is asking for seller concessions. Finally, it can help the buyer to keep some extra cash in their pocket, which can be useful for things like making home improvements or paying down other debts.
If you're considering using seller concessions on a home purchase, there are a few things to keep in mind. First, make sure that you understand the terms of the agreement and that you're comfortable with the amount of money the seller is agreeing to pay. Additionally, be aware that some lenders may have restrictions on the amount of seller concessions that can be used, so make sure to check with your lender before making an offer. Las Vegas market data shows we are in a balanced market, so seller concessions will be around for a long time. Las Vegas is one of the top 5 markets that offered seller concessions for November through January!
According to a recently released report from RedFin 77.4% of all sales, it included seller concessions.
Source:
Hansen, S. (2023, March 14). Nearly Half of Home Sellers Are Now Giving Concessions to Buyers to Close the Sale - MiamiHerald. MiamiHerald. https://www.miamiherald.com/money/home-sellers-giving-concessions-to-buyers/
