In some instances, the seller offers a discount or concession on the asking price for the property. This might be in the form of a decrease in the property price, or some other incentive. This mostly points towards a crumbling realty market scenario, and desperation on the seller’s part to sell the property. As a buyer, you need to identify the right time to clinch the concession, and save a lot of money on the purchase. Here are some facts to help you with the same.
1. It Includes Financing Costs
During the property purchasing process, there are a number of additional costs called closing costs that the buyer has to bear. They include loan processing fees, attorney’s fees, transfer taxes, title insurance costs, and inspection fees. Some sellers, as a part of the concession, agree to bear these costs. This will greatly reduce your overall spending, since closing costs constitute a major part of the selling price.
2. Concession Should Be Mentioned In The Contract
Another important thing you need to know about seller concession is that, any concession that the seller promises to provide you, should be explicitly stated in the purchase contract. If the buyer just gives you a verbal confirmation about the concession, you should make it a point to ask him to add it to the contract. This will not only give a legal standing, but also ensure that you are not cheated on.
3. There Is A Fixed Rate For Seller Concessions
Before agreeing to purchase the property, you must know that there are a fixed set of laws that govern the amount of concession that is appropriate. Presently, the concession amount ranges between 2% to 9% of the appraised value for the property in most countries. If your seller gives you a concession below that bracket, then you can remind him about the guidelines.
4. It Helps Quicken The Selling Process
A property for which the seller is providing concession, is bound to get off the market earlier than a property without any concession. If the buyer is unable to sell the property, a concession can go a long way to bring in many prospective buyers. Also, if you are looking for a tenant for your property, a concession will help lure them in.
Seller concessions can be really advantageous for the buyer, and also help the seller sell the property quickly. All you need is a comprehensive understanding of how seller concessions work.
My name is Abishek Kumar. I’m a Senior SEO Executive at CommonFloor.com, India’s first real estate portal with exclusive focus on apartments. I provide tips and how-to’s on property investment, real estate basics, and community living. For more property-related information, visit