Can you spare a couple of (thousand) bucks?
Perhaps you have been in the situation of asking the seller of a property you’re making an offer on to give you some closing cost assistance. It’s a phenomenon that’s been around forever in real estate but has taken on an important role over the last few years.
It’s commonly known as “seller help.” This is where a sales contract to purchase real estate includes a clause requiring the seller to transfer some of their equity to the buyer at the settlement table – “helping” them to acquire the required funds to close.
The use of seller help to seal a real estate deal has increased significantly, from about 25 percent of sales to almost 50 percent in 2012. The amount of seller help has climbed as well, averaging $6,000 in the midstate. Remember, that’s an average; many times that amount is higher.
While there are limits placed on seller help by the mortgage lender, almost half of all transactions now include some amount of seller help.
Why is a seller concession desirable? Because buyers today generally tend to be “payment rich” but “cash poor.” While they can afford the monthly projections for home ownership, their savings have likely taken a hit through the recession. In order to make deals happen, agents and sellers recognize that it’s in their best interests to consider offering some equity to get the property sold.
So don’t be afraid to include a request for a couple of bucks to help you get over the hump with your home purchase – be sure to consult with your buyer agent and mortgage lender as to the appropriate amount. Most sellers will be willing to meet you in the middle.