{"id":18983,"date":"2022-11-30T00:50:01","date_gmt":"2022-11-30T00:50:01","guid":{"rendered":"https:\/\/woodriverweekly.com\/?p=18983"},"modified":"2022-11-29T20:51:35","modified_gmt":"2022-11-29T20:51:35","slug":"concessions-make-your-home-more-marketable","status":"publish","type":"post","link":"https:\/\/woodriverweekly.com\/index.php\/2022\/11\/30\/concessions-make-your-home-more-marketable\/","title":{"rendered":"Concessions Make Your Home More Marketable"},"content":{"rendered":"

BY ANNA & MICHELLE<\/em><\/p>\n

S<\/span>ellers offer concessions as an incentive to encourage buyers to purchase their home.\u00a0The concessions, paid for by the seller, benefit the buyer in ways that may be more appealing than possibly being able to purchase the home for a lower price.<\/span><\/p>\n

In some situations, buyers have good income, credit, and even the down payment to purchase a home but not necessarily enough cash reserves to pay their closing costs.\u00a0Another possibility is that there could be a feature in the home that the buyer wants replaced but can\u2019t afford to do it themselves.\u00a0If the seller agrees to make that improvement, it could cause the buyer to act favorably.<\/span><\/p>\n

Concessions could include paying the buyer\u2019s closing costs, buying down the interest rate, or any possible combination of physical improvements or upgrades to the property.<\/span><\/p>\n

Sellers, occasionally, question why they should provide concessions to a buyer.\u00a0It should be obvious; it improves the marketability of the home.\u00a0With less than the normal number of homes on the market, it may appear that the seller has the advantage and may not need to offer concessions.<\/span><\/p>\n

Today\u2019s market is different.\u00a0The decreasing number of sales and increased days on the market are resulting from a smaller than normal pool of buyers.\u00a0Interest rates have more than doubled in 2022, which has made houses less affordable.\u00a0Buyers who qualified last year but couldn\u2019t find a home to buy may be able to find a home today but their debt-to-income ratio has increased significantly, causing them to qualify for smaller mortgages.<\/span><\/p>\n

Most buyers, especially in lower priced range homes, can\u2019t afford to put more money down and human nature tends to discourage them from considering a smaller home.\u00a0For that reason, they are forced out of the market until rates come down.<\/span><\/p>\n

To counteract this dilemma, sellers are willing to consider making concessions, something that builders have successfully used for years to sell their inventory without lowering their prices that will have a direct impact on comparable sales, which affects appraisals.<\/span><\/p>\n

Concessions can take on different forms.\u00a0A seller could offer to pay the buyer\u2019s closing costs or pay points for the buyer to get an FHA or VA loan.\u00a0Another option would be to pay for a 2\/1 buydown that would lower the buyer\u2019s payments in the first two years of the mortgage.<\/span><\/p>\n

Any number of improvements could be offered to the buyer, like appliances, floor covering, countertops, roof, fence, etc.<\/span><\/p>\n

Typically, these would be included in the listing agreement and promoted in the listing description through MLS and other public media.\u00a0When a sales contract is written, it needs to be included so that there is no misunderstanding between the parties and that the lender is completely aware of the concessions.<\/span><\/p>\n

To avoid possible disputes, it is also recommended that a dollar limit is attached to the concession.\u00a0For instance, \u201cSeller to pay up to 3% of the sales price in buyer\u2019s financing concessions\u201d or \u201cSeller to escrow up to $5,000 for appliances at buyer\u2019s discretion.\u201d<\/span><\/p>\n

Concessions have not been used much in the past 15 years, but changing times requires us to use different methods to be successful.\u00a0Sellers can offer concessions and buyers can ask sellers to make concessions in the purchase agreement.<\/span><\/p>\n

If your agent is not familiar with concessions, it may be that they have never used them before.\u00a0They are commonplace and legal, within limits, if they are disclosed.\u00a0The benefit is that concessions can improve marketability of a home and put a transaction together between parties that would not be possible otherwise.<\/span><\/p>\n

\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

BY ANNA & MICHELLE Sellers offer concessions as an incentive to encourage buyers to purchase their home.\u00a0The concessions, paid for by the seller, benefit the buyer in ways that may be more appealing than possibly being able to purchase the home for a lower price. In some situations, buyers have good income, credit, and even […]<\/p>\n","protected":false},"author":1,"featured_media":18984,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","_pvb_checkbox_block_on_post":false,"footnotes":""},"categories":[64,38],"tags":[],"class_list":["post-18983","post","type-post","status-publish","format-standard","has-post-thumbnail","category-better-homeowners-news","category-sponsored"],"_links":{"self":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/18983","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/comments?post=18983"}],"version-history":[{"count":1,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/18983\/revisions"}],"predecessor-version":[{"id":18985,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/posts\/18983\/revisions\/18985"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media\/18984"}],"wp:attachment":[{"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/media?parent=18983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/categories?post=18983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/woodriverweekly.com\/index.php\/wp-json\/wp\/v2\/tags?post=18983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}