Seller Concession
A seller concession is when the property seller agrees to pay certain costs on behalf of the buyer, typically closing costs, repairs, or other transaction expenses. These concessions are negotiated as part of the purchase agreement and effectively reduce the seller's net proceeds.
Example
“The seller offered a $5,000 concession to cover the buyer's closing costs in order to accept their lower offer.”
Memory Tip
Think "seller's concession stand" - like a concession stand gives you extras, seller concessions give buyers financial extras.
Why It Matters
Seller concessions can help close deals when buyers have limited cash for closing costs or when repairs are needed. They provide flexibility in negotiations and can make properties more attractive to buyers with tight budgets.
Common Misconception
Many believe seller concessions always mean the seller is desperate, but they're often strategic tools used in competitive markets to structure attractive offers.
In Practice
A buyer offers $300,000 for a home but asks for $5,000 in seller concessions to cover closing costs. The seller accepts, receiving $295,000 net while helping the buyer who only has enough cash for the down payment.
Etymology
"Concession" comes from Latin "concedere" meaning to yield or grant, as the seller yields to pay certain buyer costs to facilitate the sale.
Common Misspellings
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