Buying a home in Seattle can be a challenging and costly endeavor, especially in a competitive and expensive housing market. However, there are some ways to save money and make your home-buying experience easier and more enjoyable. One of them is asking for a seller concession.
A seller concession is when the seller agrees to pay for some of the buyer's expenses, such as closing costs, repairs, or interest rate reduction. This can lower the buyer's upfront and long-term costs and make the deal more attractive and affordable.
But how do you ask for a seller concession in the Seattle real estate market? And what are the benefits and drawbacks of doing so? Here are some tips and insights to help you navigate this process.
According to the Seattle real estate market forecast, the market has cooled down over the past year or so, giving buyers more negotiating leverage and opportunities to ask for seller concessions.
This means that sellers are more motivated and willing to offer incentives to attract buyers and sell their homes faster. Some of the common reasons why sellers might agree to a seller concession are:
• To make a hard-to-sell property more appealing to buyers
• To address issues or damages that were discovered during the home inspection
• To compete with other similar properties on the market
• To avoid lowering the asking price or making costly repairs
• To close the deal quickly and smoothly
• Save money on closing costs, which typically range from 2% to 5% of the home's purchase price
• Reduce your interest rate and monthly mortgage payments
• Afford a more expensive or desirable home
• Avoid paying out-of-pocket for repairs or improvements
• Have more cash available for other expenses, such as moving or furnishing
A seller concession can be requested at any point during the buying process of a house for sale in Seattle WA, but it is usually done during the negotiation stage after the buyer has made an offer and the seller has accepted it. The seller concession can be written into the purchase agreement or added as an addendum to the contract.
• Work with a professional and experienced real estate agent who can advise you on the best strategy and tactics for your situation
• Research the local market and comparable sales to determine the fair market value of the home and the appropriate amount of seller concession to ask for
• Be flexible and realistic about your expectations and demands, and be prepared to compromise and make trade-offs
• Be respectful and courteous to the seller and their agent, and avoid making lowball offers or unreasonable requests
• Have a strong preapproval letter from a reputable lender and a good credit score to show the seller that you are a serious and qualified buyer
• Be ready to act fast and close the deal quickly, as seller concessions are often contingent on a timely closing
Asking for a seller concession in Seattle can be a smart and beneficial move, but it also comes with some limitations and risks that you should be aware of. Some of them are:
• Mortgage lenders place limits on seller concessions, depending on the type of loan and the loan-to-value ratio. For example, conventional loans allow up to 3% of the purchase price for seller concessions if the down payment is less than 10% and up to 6% if the down payment is 10% or more. FHA loans allow up to 6% of the purchase price for seller concessions, regardless of the down payment.
• Seller concessions can affect the appraisal value of the home, as they are considered sales concessions by appraisers. Sales concessions are adjustments made to comparable sales to reflect the difference between the contract price and the market value of the home. If the seller's concession is too high, it can lower the appraised value of the home and cause the loan to fall through.
• Seller concessions can reduce the seller's net proceeds from the sale, which can affect their motivation and willingness to cooperate. If the seller feels that they are losing too much money or equity, they might reject or counter your offer or ask for other concessions from you, such as a higher purchase price or a shorter inspection period.
Asking for a seller concession in Seattle, WA Homes for Sale can be a win-win situation for both buyers and sellers, as it can help them save money, close the deal faster, and achieve their goals. However, it is not a one-size-fits-all solution, and it requires careful planning, research, and negotiation. If you are interested in asking for a seller concession in Seattle, you should consult with a trusted and experienced real estate agent who can guide you through the process and help you get the best deal possible.