What is a seller's concession?

Answer

A Seller's Concession or Seller Assist is basically where the seller of a property agrees to pay in part or all of the buyers closing costs.

The seller must agree to the seller assist and it must be stated in the sales contract.

Most banks allow 3% or 6% seller concessions. Some lenders will limit the seller concession based on the amount financed. If you are taking a loan for more than 90% then the lender may only allow a 3% max seller concession. Under 90% they will allow 6%.

Here's where it gets a little complicated, the seller assist is not a part of the loan and can not be financed. Basically the seller is lowering their gain from the sale to pay your closing costs.

So if you have a house selling for 100,000 and the seller gives you a 6% seller concession. Instead of recieving 100k the seller agrees to pay up to 6,000 in closing costs and recieve 94,000. If the closing costs are less then the money left over usually goes back to the seller, since it is their money.

In the end the main thing is that you don't just add it on top of the sales price if you intend to seek financing for the purchase. The max selling price is what ever the buyer and seller agree on but the maximum loan amount will be based on an appraisal. In a purchase usually the lender will order an appraisal.

First answer by ID0000000000. Last edit by Dennhugh. Contributor trust: 48 [recommend contributor]. Question popularity: 98 [recommend question]