Going Beyond Price Cuts

Real estate agents say concessions for buyers are on the rise; and even when sellers have significantly lowered asking prices, some are offering additional concessions. These include covering buyer’s closing costs, offering gift cards, paying for renovations up front, or subsidizing taxes by giving buyers a portion of the proceeds of the sale. Some lenders are approving mortgages with concessions equivalent to as much as 3 percent of the purchase price, provided the concessions are spelled out in the contract and the HUD settlement form; concessions up to 6 percent of the sales price are being allowed by the FHA and Veterans Affairs. Sellers increasingly are helping with closing costs to help buyers who already have put all their money into the down payment, and others are paying for renovations as a means of ensuring a quicker sale. Still, Realtors say price reductions generate more attention than other concessions. They also point out that regardless of the concessions, the house must appraise for the contract sale price in order for the deal to move forward. | Read More