Hello, I am still trying to understand seller concessions. I am working with a realtor who says that seller concessions have nothing to do with the seller, but more with the appraisal that comes back after the lender orders it. Which will then lets the lender know how much mortgage the buyer can be approved for. If the appraisal comes back lower than what the asking price is, then the lender will not approve the seller credit. And it is up to the buyer compensate between the gap of the asking price and the appraised value if they want the home. The way I understand it, is that if the seller accepts seller concessions, they are willingly giving up a percentage of the homes equity to pay for the buyers closing costs, which is rolled into the loan. Please correct me if I'm wrong.
Seller concessions are what the seller gives you towards closing costs, so it's entirely about the seller and not dependent on the appraisal. However, if an appraisal comes in short, the difference has to be made up by either the buyer, seller, or both. A common strategy is to negotiate a lower price and remove the ask of seller concessions to net the seller a more desirable number. That's probably what your agent is referring to, but it's incorrect to say seller concessions have nothing to do with the seller. Yes, effectively you are financing closing costs into the purchase price of the home.
When do you actually receive the seller concessions? For example, buyer agrees to 3% seller credit. But the buyer has to pay for inspection, appraisal, etc beforehand. Do you get paid what you spent on those fees at the end from the seller when the deal closes?
Hi Kyle, If there's money left over from the seller concessions can we put that towards the seller buying new appliances for the home? This is assuming all closing costs all prepaids all buying down of the interest rate has been maxed out.
If the buyers want to purchase a home for a lot less than the loan amount they are pre-approved for, would the seller concession drop? The seller concession in our pre-approval letter is not a percentage but a specific amount in dollars. Thank you!
Loved this video
Thank you!
Hello, I am still trying to understand seller concessions.
I am working with a realtor who says that seller concessions have nothing to do with the seller, but more with the appraisal that comes back after the lender orders it. Which will then lets the lender know how much mortgage the buyer can be approved for.
If the appraisal comes back lower than what the asking price is, then the lender will not approve the seller credit. And it is up to the buyer compensate between the gap of the asking price and the appraised value if they want the home.
The way I understand it, is that if the seller accepts seller concessions, they are willingly giving up a percentage of the homes equity to pay for the buyers closing costs, which is rolled into the loan. Please correct me if I'm wrong.
Seller concessions are what the seller gives you towards closing costs, so it's entirely about the seller and not dependent on the appraisal.
However, if an appraisal comes in short, the difference has to be made up by either the buyer, seller, or both. A common strategy is to negotiate a lower price and remove the ask of seller concessions to net the seller a more desirable number. That's probably what your agent is referring to, but it's incorrect to say seller concessions have nothing to do with the seller.
Yes, effectively you are financing closing costs into the purchase price of the home.
When do you actually receive the seller concessions? For example, buyer agrees to 3% seller credit. But the buyer has to pay for inspection, appraisal, etc beforehand. Do you get paid what you spent on those fees at the end from the seller when the deal closes?
Hi Kyle,
If there's money left over from the seller concessions can we put that towards the seller buying new appliances for the home?
This is assuming all closing costs all prepaids all buying down of the interest rate has been maxed out.
When do u negotiate this at the beginning or after a counter offer or after appraisal
Great information
Glad it was helpful!
If the buyers want to purchase a home for a lot less than the loan amount they are pre-approved for, would the seller concession drop? The seller concession in our pre-approval letter is not a percentage but a specific amount in dollars. Thank you!
Seller concessions is always negotiated and not adjusted automatically
Thank you for making this video.
My pleasure!
Can I use seller concessions or lender credits to pay for a home warranty at closing?
Yes it's listed on the settlement statement :)
@@WinTheHouseYouLove thank you
What does it mean when a buyer says I concessions
Hi! This is request of a buyer to help reduce the amount of cash needed at closing.
does the seller get that money back ?
No. Often the purchase price is increased by the same amount of offset the cost
great
Thank you so much for watching!! :)