CONSUMER GUIDE: SELLER CONCESSIONS

As a home seller, you have several options when it comes to marketing your property, including whether to offer concessions to attract buyers or finalize a sale. Here's a guide to help you decide if this strategy is right for you:

What Are Seller Concessions and Why Offer Them?

Seller concessions involve covering certain costs for the buyer during the home-buying process. These can make your property more appealing, potentially leading to quicker or better offers. Concessions can also ease the financial burden for buyers with limited cash reserves by reducing upfront expenses, allowing them to stretch their budget.

Common Examples of Seller Concessions

You can choose from a variety of concessions to offer, such as covering the cost of a title search, loan origination fees, inspections, homeowner association dues, real estate taxes, or even home repairs. Concessions can also include paying fees for professionals like agents and appraisers.

How Do Seller Concessions Work?

Concessions can either be advertised upfront or negotiated during the purchase process. They are typically outlined in the purchase agreement as a specific dollar amount and are not binding until the contract is signed.

Concessions vs. Compensation Offers

While concessions cover buyer-related costs, an offer of compensation refers specifically to the seller or their agent compensating the buyer's agent for bringing in a buyer who completes the transaction.

How to Communicate Concessions to Buyers

You can promote your concessions publicly, through a Multiple Listing Service (MLS), or during negotiations. However, some MLS platforms may limit how concessions are displayed, sometimes only allowing a simple "yes" or "no." If listed on an MLS, concessions must be presented as a total sum and cannot be contingent upon payments to the buyer's agent.

Are There Limits to Concessions?

Yes, limits are typically determined by the buyer's lender and state regulations. Any payment made toward the buyer's broker fee is excluded from these limits and must be handled off-MLS.

How to Choose the Right Strategy

Working with a REALTOR® ensures you receive expert guidance based on ethical standards outlined in the REALTOR® Code of Ethics. Your agent will help you evaluate your options and create a strategy that fits your goals.

Consult with your real estate agent or attorney for state-specific details.