When your buyer asks for concessions it means they are negotiating more than just the price. Concessions are anything the buyer is asking for outside of price. If the buyer is financing a loan for the house he may ask you to pay the closing costs for him/her. There could be furniture the buyer likes and wants you to leave behind. A concession is a thing that is granted, especially in response to demands. A thing conceded.
The most common concessions asked for by buyers is to have you pay their closing costs for them. Closing costs are incurred when financing a real estate purchase. Costs incurred include loan origination fees, discount points, surveys, deed recording fees, taxes, credit report charges and flood plain determination fees. There could be others but these are the most common.
Prepaids are also included in closing costs. Prepaids are buyer costs collected at closing and put into an escrow account for expenses such as taxes, property insurance, mortgage insurance and special assessments.
Asking for closing costs to be paid has become common. So common many times it is expected by buyers. Sometimes lenders make it a condition of pre-approval. It doesn’t mean you have to accept, it’s simply part of the negotiation. When a seller agrees to pay closing costs for a buyer the amount is generally added to the price. It’s not like someone’s giving money away. The potential problem when paying closing costs is the appraisal.
If a house doesn’t appraise the contract has to be renegotiated. A bank will not lend more then the contract price under normal circumstances. If closing costs are being paid and the house does not appraise the seller will want to take away the paid closing costs. That way the bottom line stays the same. The buyer will still want the closing costs paid but at a lower contract price. There’s potential for the deal to fall apart at this stage.
In some states it’s not common to leave appliances with the property. Asking for said appliances is another concession. Sometimes potential buyers may ask for some of your stuff in an initial offer. That stuff could be your furniture, wall hangings or electronics. I’ve seen buyers ask for riding lawn mowers on homes with large lots.
Concessions are part of negotiations. In a buyers market concessions are asked for more often. In a sellers market not so much simply because the buyer doesn’t have as much room to negotiate. You don’t have to say yes and you don’t have to say no to concessions, it’s all part of the negotiations.
You can easily sell your home yourself. It’s your money, keep it.
