Seller: Let me see if I understand this, are you telling me that my house is listed for $139,900 and the offer is $140,000 yet I'm going to get $135,000 because the buyers' want a seller's concession?
Realtor: Yes Sir, that is correct.
Seller: WHAT??? WHY DO I HAVE TO PAY THE BUYERS' CLOSING COSTS??? Why can't they just pay me $139,900 being as they obviously want my house? If they can't afford the house then tell them to go buy the house down the street. (Anger, Sneer)
Realtor: This seller's concession allows the buyer to finance their closing costs so that they don't have to come up with the money for their closing costs upfront.
Seller: This sounds weird, I don't understand it nor do I like it!
Realtor: It is something that could greatly benefit you and the buyer at the same time. There are some concerns regarding an appraisal for the bank but other than that this could help you move very soon.
Seller: But I still don't understand why I have to pay for their closing costs...
This scenario goes on several times a day in real estate offices throughout the country. The concept is relatively simple, but the terminology is a bit confusing. Simply said, the buyer wants to finance their closing costs with their mortgage so they added the closing costs to the top of their offer.
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