Buyers’ or Sellers’ Market?
The real estate market is shifting. In some areas of the country, it has flipped to a strong buyer’s market. Not so in Asheville! We still have only 1.8 months of inventory in the Asheville Region, which means it is still a sellers’ market. So are seller concessions really necessary?
We are definitely seeing some changes in the local market. Properties need to be priced just right. Pricing your property more than $10,000 over it’s appraised value could mean the difference between multiple offers and sitting for so long that buyers wonder what’s wrong with it!
Asheville Realty Group agents are local area experts. We can advise you of the best price to sell your home. Once you go under contract, there are still challenges that require the expertise of experienced agents who know their market.
For example ~
What if you get your property under contract, the buyer has their inspections, and they find something big? That buyer may have gone under contract with you for a price over what you asked. Now they are asking you to fix what’s wrong or give a monetary concession. (Put yourself in their position – this is what you would want as well.)
Seller concessions are a useful tool in real estate. Used correctly, seller concessions can benefit both buyer and seller. For example, concessions can be offered in lieu of seller repairs or upgrades, saving out of pocket cash. Buyers can also benefit from “financing” some of their own out-of-pocket costs for specified fees and charges.
If the buyer is getting a loan, though, there are limits to what the lender will accept for seller concessions. Understanding this ahead of time can save time and frustration. Here is a snapshot of the most common loan types and concessions possibly allowed (always check with your lender).
Conventional (Fannie Mae/Freddie Mac):
With a conventional loan, the amount the lender will allow for seller concessions is determined by the amount of the buyer’s down payment.
- 25% down payment – 9% concessions
- 10-25% down payment – 6% concessions
- Less than 10% down payment – 3% concessions
6% maximum concession
4% closing costs concession
USDA allows the seller to pay all the closing costs and prepaids for the buyer with no percentage limit. Other restrictions and considerations apply, so speak with your lender.