what is a seller concession? I mean, that's kinda like a dinosaur these days. I haven't seen one of those in several years. So a seller concession is when they agree to provide funds that support the buyer during the transaction. You can bump into a seller concession several times throughout the transaction. Usually, it's in the beginning. A buyer might use a negotiating tactic that says, I'll pay full price, but I'm gonna ask the seller to pay for all of my closing costs and my prepaids allowing me to come to the table with less cash down. They might also negotiate a price reduction in addition to a seller concession.
Those are two separate items and can be used in conjunction or separate from one another. A seller concession can also show up during the inspection period where you might choose to not have something fixed, but inline, get money back from the seller again towards prepaids and closing costs or a price reduction. So there's sometimes a conversation right now about a two one buy down or a rate reduction, and that might be a seller concession. I wanna double click on that because a seller concession can only be used towards a fires prepaids and closing costs. There are limits to what a seller can provide, both per the loan that the buyer uses.
Learn why it's exciting for buyers for the return of seller concessions in this episode of The Double Comma Club, "What Are Seller Concessions?"
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