ShareAs a home seller, you have choices when deciding how to market your property, including whether you’d like to offer concessions to attract buyers or close a deal. Here’s what you need to know as you consider whether this approach is right for you:
What are seller concessions and why make them? A concession is when a seller pays for certain costs associated with purchasing a home for the buyer. Concessions could make your property more attractive to buyers or lead to a better or faster offer. Concessions also help make home ownership more accessible for buyers by reducing upfront expenses, so buyers with limited cash reserves may be able to stretch their budget further.
What are some examples of concessions I can offer? You have options. Concessions can include covering costs associated with a title search, loan origination, inspection, homeowners’ associations, real estate taxes, or home repairs and updates. They can also be used to cover fees for professionals like agents and appraisers.
How do seller concessions work? Concessions can be advertised upfront or negotiated as part of a home purchase agreement. In the agreement, a concession is often written as a specific dollar amount. Seller concessions usually aren’t binding until they are put in a contract like a purchase agreement.
What’s the difference between a concession and an offer of compensation? Concessions can cover a variety of costs or fees for a buyer associated with purchasing a home, whereas an offer of compensation is specifically when the seller or their agent agrees to compensate a buyer’s agent for bringing a buyer who successfully closes the transaction. Read more about offers of compensation.
How do I tell buyers I’m offering concessions? Concessions can be advertised publicly, shared on a Multiple Listing Service (MLS)—an online platform that compiles home listings from different sources—or discussed during purchase negotiations. Keep in mind that not all MLSs allow concessions to be advertised, and some only allow you to indicate whether you are offering a concession with a simple “yes” or “no.” If you choose to put a concession on an MLS, it must be written as the total sum of all concessions offered and can’t be conditioned on the use of, or payment to, a buyer’s agent.
Is there a limit to the concessions I can offer? Yes. The limit on the total value of concessions you can offer depends on the terms set by the buyer’s lender and state law. However, any payment you offer toward the buyer’s broker’s fee is excluded from this amount and must be made off-MLS.
How do I know what option is best for me? When you work with an agent who is a REALTOR®, you are working with a professional guided by ethical duties under the REALTOR® Code of Ethics, including the pledge to protect and promote the interests of their clients. Your agent will work with you to weigh your options, answer questions, and develop a strategy you are confident in. Read more about REALTORS’® duty to put client interests above their own.
Practices may vary based on state and local law. Consult your real estate professional and / or an attorney for details about state law where you are purchasing a home. Please visit facts.realtor for more information and resources.