The Seller's Concession

A lot of people have been asking about "seller's concessions". I would like to take a few minutes here just to outline exactly what it is and how it impacts your ability to buy a house. Let's say , for example, that you are buying a house for $200,000. But, you don't have the closing costs (mortgage fees, school taxes, proeprty taxes, title fees, attorney fees, etc.) which are approximately 10% of the selling price. So now, our 200,000 house is actually costing $210,000.
Lately, most buyers don't have $10,000 in closing costs, so they try to get a mortgage for $210,000 to cover the purchase price of the house plus the clsoing costs. This is a great way to buy a house for little or no money down (more on that another time). The only problem however is this...the house has to apprasie for the $210,000 not the $200, 000. A real problem when prices were so high they were already at the top of thier appraisal numbers. Now, however, prices have dropped considerably and last year's values are still being used for appraisals..so....its realtively easy to get a seller's concession on top of a morgage.. Bear in mind though, you will be making payments on $210,000 rather than $200,000. I sell a lot of homes in Orange, Sullivan and Ulster counties and this form of financing is becoming very prevolent with today's buyer's. If you are a seller, expect an offer to contain a seller's concession. If you are a buyer, it a great vehicle to save your "cash on hand" for home repairs and fix ups.