Making an offer for a house help

[Bobby_M]

A concession is like asking the seller to cover some of the closing costs or to pave the driveway before closing. The reason you'd ask for them is that you think you can get away with them or you want the cost of those repairs to be more easily wrapped into your mortgage. Let's say a house is otherwise awesome but the driveway is crumbling. The seller knows this and priced the house appropriately knowing you would have to spend $5000 to do it yourself when you take ownership. What if you don't have $5000 to spend? If the seller can swing it, you ask them to have the driveway paved and that you'd be willing to put that money into the selling price. Now you pay for that driveway job over the course of your mortgage rather than having to take out a home equity line of credit a year later or whatever.

More typical concessions happen after you have a contract and your home inspection uncovers a need for repair. Let's say the kitchen and bathroom need GFCI outlets. You may ask them to fix it or you may ask them for a $500 concession to have it repaired yourself. In general, it's best to have the seller fix problems that don't involve picking decor. If a bunch of tiles are cracked, wouldn't you rather pick a new type of tile after you move in rather than a contractor grade off white?

Whether the seller is willing to budge on any requests is completely based on how desperate they are to sell, if the house has been on the market long, if you are a strong buyer, etc. When I sold in 2003, it was a major sellers market and my response to a 3 page list of buyer requested concessions was a simple "no". On the other hand, my most recent purchase was the other way around and I got 2500 in repair concessions.

 

[hunter_le five]

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Good point. Well said.

 

[HarborTownBrewing]

If your talking about something like asking the seller to pay your closing costs (to keep this example simple), it's basically that you are just financing your closing costs.

Let's say the house is $150k, and you ask them to pay for $5000 of your closing costs. The seller sees this as a $145k offer.

So, lets say they counter at $154k and $5k in closing. They are basically accepting $149k for the house, and giving you the chance to finance the $5k for whatever rate you are getting.

This is something a lot of people stumble with though, so you may be able to "trick" the seller, but their realtor should know better.

AGAIN, if you don't have your own realtor, please get one. Using the seller's is just...ugh. The only winner there is the realtor.

 

[MattyIce]

Going to echo here that you find your own realtor. If you like the seller's realtor so much, you may even ask for a referral. A realtor cannot ethically represent and provide advice to both sides of a transaction

 

[cannman]

Thanks for all the concern! I'm really using this collection of knowledge from all you fantastic beer buds to get the heads up before talking to my realtor, that way I have my head a bit more prepared for anything to come.

It's my fault for doing the reading, and then getting excited and posting ideas on here, but I'm not going to stop because ya'll help with confidence and great info.

 

[fuzzy2133]

Make your Realtor work a little bit for their 2.5-3%. Our realtor worked his but off selling our house and got an easy 3% "representing" us on buying a new house.

 

[MattyIce]

Make your Realtor work a little bit for their 2.5-3%. Our realtor worked his but off selling our house and got an easy 3% "representing" us on buying a new house.

Agreed. Give this stuff to a pro. It typically costs you nothing when you are the buyer.