What is the maximum Seller Concession for a Buyer's Loan?
Well, that depends, and it's always best to consult with the Buyer's lender before your offer includes promises your lender can't keep. When you are negotiating for a buyer, keep the following in mind.
|Type of Loan||LTC/CLTV||Maximum Seller Concession Allowed|
|Conventional Primary and 2nd Homes||Over 90%||3%|
|Conventional Primary and 2nd Homes||75-89.99%||6%|
|Conventional Primary and 2nd Homes||Under 75%||9%|
|Conventional Non-Owner Occupied||N/A||2%|
|VA||N/A||4% Maximum for prepaid closing costs, funding fee & debt payoff|
This information provided by Eileen Burke with Cobalt Mortgage in Seattle, a preferred lender.
Eileen also counsels that Seller concessions can not be paid in cash to the buyer, so if you are leaving money on the table, apply it to future home owner's insurance, property taxes, or *HOA dues.
We are in a very unusual market. For listings where the Sellers properly prepare the home and agree to list at a price the market recognizes as current, we are seeing very short market times and multiple offers. The other half of the market consists of homes that were priced too high originally and/or the Sellers are unwilling to lower them. It's this homes that the seller is often willing to assist the buyer in making the loan more attractive and sometimes just possible.
Representing a Buyer involves getting the best deal possible and this is one avenue to explore.
Representing a Seller and suggesting a Seller contribution in a counter offer may just be the ingredient that makes for a happy transaction.