coykiam

Can someone explain this to me? Been googling and still have a vague understanding. Here is an example taken from yahoo.

"For example, suppose you agree on the price of the house at, say, $200,000. You then ask the seller for a 6% seller concession. So you're now going to pay $212,000 for that house, but the seller is going to give you that $12,000 back when the sale takes place. You're going to use that money to cover all of your closing costs."

Now how does this benefit the seller besides making the sale go faster?

chill_dog

I don't see how that makes the sale go faster . With regard to the buyer using the money to pay closing costs, I guess it's a roundabout way to roll them into the mortgage.

Personally, I've always just thought of that process as a way to launder equity to avoid capital gains taxes for keeping it versus putting it down.

It benefits the seller because it costs them nothing yet it allows them to sell the house.

MR1

Makes sale go faster because usually the buyer does not have enough cash to buy without the concession. Frequently these concessions were not disclosed to the lender. In that circumstance there is a large question about the legality of the transaction. The buyer is not coming to the table with the percentage for down payment and closing cost that they indicate from their own funds.