Seller Concessions are seller paid closing costs that are rolled into your mortgage loan.
Seller Concessions are typically used in 100% purchase transactions where the buyer is not putting any money down.
This helps the buyer pay for the closing costs associated with the loan process.
Typically on 100% purchase transactions you are limited to a seller concession of 3% of the purchase price if you are obtaining financing from a conforming lender. This may or may not be enough to pay for all of the closing costs involved, depending on where it is that you are buying your home.
There are also many so-called "Non Conforming" or "Subprime" Lenders that will allow a seller concession up to 6% of the purchase price even on 100% purchase transactions.
A seller concession is offered by the seller as an inducement to a prospective buyer to aid in the sale of a home.
Ask your lender about new Fannie Mae and Community loan programs which may allow 6% seller's concessions on loans with as little as 3% down payment.
A seller concession must be clearly stated in your purchase contract and the contradicted sales price which includes the seller concession cannot exceed the listing price.
Seller Concessions cannot be used towards the down payment.
Home
