Welcome Back to the Seller Concession Playbook

Jennifer Chicano, Your Loan Chic, is back with another episode of the Seller Concession Playbook to address a misconception that costs buyers real money by leaving negotiated dollars on the table. Seller concessions are not just for first-time buyers or buyers who cannot cover their closing costs on their own.

Who Seller Concessions Actually Benefit

The short answer is almost any buyer. First-time buyers. Fifth-time buyers. Move-up buyers. Downsizers. Buyers who have more than enough cash to cover every cost associated with the transaction and simply choose to keep more of it in the bank.

The question is not whether you need the seller’s help. The better question is whether those dollars can create a financial advantage for you. In most cases the answer is yes regardless of how well-funded the buyer is.

What a Seller Concession Can Do That a Lower Price Cannot

When a seller is willing to contribute toward a buyer’s costs that contribution can be directed toward allowable expenses including covering closing costs that would otherwise come out of the buyer’s pocket or supporting a rate strategy that lowers the monthly payment for years to come.

A seller-funded rate buydown can lower the interest rate either temporarily or permanently depending on how the concession is structured. The monthly savings from that lower rate extend across the entire loan term or the buydown period and may represent more total value than the same dollar amount taken off the purchase price would have produced.

Covering closing costs with seller funds rather than cash out of pocket preserves liquidity that can sit in savings, serve as a post-closing reserve, or go toward something else entirely. A well-funded buyer who takes seller concessions and directs them strategically ends up in a stronger cash position after closing than one who declined the concession and paid those costs from their own account.

What Seller Concessions Are Not

They are not a signal that you cannot afford the home. Accepting a seller concession is not a statement about financial need. It is a statement about financial strategy. The buyer who negotiates a concession and uses it intelligently is making a smarter financial decision than the buyer who leaves it on the table out of a misplaced sense that needing help is the only reason to accept one.

Do not just negotiate the price. Have a plan for the money. Follow along for the next episode of the Seller Concession Playbook and reach out to Jennifer Chicano, Your Loan Chic, to build that plan before the offer goes in.

Sources

ConsumerFinancialProtectionBureau.gov
FannieMae.com
MortgageNewsDaily.com
HUD.gov
Investopedia.com