When buyers are looking for homes, it's not uncommon for them to
get so preoccupied with the down payment that they forget about the closing
costs. If you find yourself in this situation, negotiating seller concessions
might be the right move to reduce your up-front expenses. If a seller agrees to
these concessions, it means they're willing to cover part of the buyer's
closing costs. Let's take a closer look at what you can ask for, when a seller
might be considering this type of arrangement, and how you can position
yourself for the best possible outcome.
What Do Seller Concessions Cover?
Seller concessions cover a portion of the buyer's closing costs,
which may include loan fees, title costs, appraisal fees, prepaid taxes, or
insurance. However, some limits may apply, depending on the type of mortgage
loan you choose. For example, conventional loans usually set a percentage of
the total purchase price as the cap for what you can request in seller
concessions. FHA and VA loans typically have higher concession amounts, but
make sure to contact your loan officer for specific details.
Why Would a Seller Agree To Pay Closing Costs?
Sellers who are eager to close quickly are more likely to agree
to concessions, especially if it's a slow market or their home has been listed
for a while. Sometimes, builders will also offer seller concessions to attract
new residents to the neighborhoods they've designed. Of course, if any issues
reveal themselves through the home inspection process, this gives you leverage
to ask the seller for concessions as well.
How Can I Negotiate Seller Concessions
Successfully?
The most important thing to keep in mind when you request
concessions is that you'll need to be flexible and strategic about how you
structure your request. Work closely with your loan officer and real estate
agent to make sure you understand your full closing costs before negotiating.
Then, prioritize the concessions that matter the most.
Remember, concessions aren't free money. The goal is to help you
preserve cash at closing as the buyer. In some cases, the seller may agree to
concessions but only in exchange for a higher purchase price. However, this
situation can still work out in your favor by reducing the up-front costs and
spreading other expenses out over time by rolling them into your mortgage. Make
sure to review the property appraisal thoroughly, and rely on your real estate
agent's expertise to make the right decision for you.
Sources: nar.realtor, zillow
Team Lasson is here to assist with
all of your home buying needs! If you’re
considering taking the leap into home ownership in the near future, we’re here
to help. Contact us today to explore
which loan program aligns best with your financial goals.
The first step in preparing for your big purchase is to get
pre-approved for a mortgage at Lake of the Ozarks. Visit www.yourlakeloan.com or
call us at (573) 216-7258 to get started today!
Senior Mortgage Banker
NMLS #: 493712
Flat Branch Home Loans – Team Lasson
2882 Bagnell Dam Blvd
Lake Ozark, MO 65049
Cell: (573)
216-7258
Email: teamlasson@fbhl.com
Website: www.yourlakeloan.com
**The
postings on this site are my own and do not necessarily represent Flat Branch
Home Loans positions, strategies, or opinions.
Flat Branch Home Loans
NMLS 224149. A Division of Flat Branch Mortgage Inc.