Statistics show that sellers are giving concessions to 42% of homebuyers, a near record high.* So what are concessions and how do you get that?
Concessions are when the seller pays for some or all of the homebuyer’s closing costs. This can be any or all of the following:
- Lender fees
- Buying down your interest rate to a lower rate
- Title insurance
- Escrow or attorney closing fee
- County recorder’s fee
- Property taxes
- Homeowner’s insurance
- Refund for the appraisal report and credit report you paid up front
Concessions CANNOT go toward your down payment. The seller is not allowed to help you buy the property, only to pay for closing costs.
If you need help with the down payment, then there are sources in all 50 states. But, there are restrictions to qualify. For example, with some down payment assistance programs, you cannot earn more than a certain percentage of the median income of the neighborhood. What percentage would that be, exactly?
It could be 80% or it could be 115% or something different, it all depends on the program and which county you’re in.
If you live in an area where the median income is $100,000/year and the percentage is 80%, then your income can be $80,000/year and still receive the assistance money for your down payment.
In my brand new book, Get the Mortgage You Want Like the Pros, there is listed a source to down payment assistance programs in all 50 states. Plus, a ton of other important information for knowing how to get the best home loan.
Back to seller concessions: There are two times you can ask for a seller concession:
1) In your purchase offer that your realtor presents to the seller.
2) After the home inspection, when you get the report showing the imperfections, flaws, repairs needed for the home. At that point, your realtor can share the inspection report with the sellers and ask for concessions in lieu of doing the repairs.
If you have any questions about homebuying, feel free to ask in the comments. The system requires “moderation” meaning it waits for me to read it, to keep out the robo-spammers; but I do read ALL comments and respond.
*According to Redfin, concessions became more popular among home sellers during the three months preceding April 30, 2023, as sellers are giving concessions to 42.9% of homebuyers. This number is up from 25.5% a year ago,