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Understand what seller concessions cover
Seller concessions are costs a home seller agrees to pay on behalf of the buyer. According to the National Association of REALTORS® (NAR), these may include certain closing costs, loan fees, property-related expenses, or repairs. The goal is often to reduce the amount of money a buyer needs upfront when purchasing a home.
For example, a seller might agree to contribute toward a buyer’s eligible closing costs. The amount is usually negotiated and included in the purchase agreement. Although a concession may help complete the transaction, it also reduces the seller’s net proceeds. Therefore, the seller should evaluate the full financial terms of the offer rather than focusing only on the purchase price.
Why might seller concessions make sense?
Seller concessions can make a property more attractive to buyers who have sufficient income to qualify for a mortgage but want to preserve some of their available cash. NAR explains that concessions may help attract buyers or support negotiations that lead to a successful sale. They can also help resolve certain inspection-related concerns when the parties agree to a financial credit instead of repairs.
However, concessions are not always the best solution. Buyers using mortgage financing must follow their lender’s rules, including limits on eligible costs and contribution amounts. In addition, a concession may not provide the same financial benefit as a price reduction. Comparing these options helps both parties understand how a proposed agreement affects their finances.
Evaluate the overall offer before deciding
Whether to offer a concession depends on the home’s market position, buyer interest, and the seller’s priorities. A property attracting multiple offers may require a different negotiation strategy than one receiving limited interest. In Pittsburgh’s North Hills, these conditions can vary by neighborhood, property type, and price range.
Before agreeing to a concession, sellers should compare estimated net proceeds, the buyer’s financing, and the likelihood of closing successfully. Seller concessions should also be distinguished from separately negotiated buyer-agent compensation, which is subject to different rules. A qualified lender can explain financing limits, while a Pennsylvania real estate attorney can address contractual questions.
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