How Sellers Can Use Concessions to Speed Up Their Sale – A Must-Know Strategy!
With more homes hitting the market, buyers are gaining the upper hand in negotiations. On top of that, high mortgage rates are pushing many buyers to look for better deals. If you don’t want your home sitting unsold for too long, offering seller concessions can help attract more buyers and get you to the closing table faster!
So, what exactly are seller concessions? And are they really necessary?
What Are Seller Concessions & How Can They Help You Sell Faster?
Simply put, seller concessions are when the seller covers part of the buyer’s costs to make the purchase easier and speed up the sale.
Common types of seller concessions include:
? Covering part of the buyer’s closing costs
? Reducing the buyer’s mortgage rate for the first two years (Rate Buydown)
? Providing repair credits to fix home issues
When should you consider offering seller concessions?
? High competition, slow sales (Buyers have more choices—you need to stand out!)
? Younger or first-time buyers (They may have the down payment but struggle with cash flow.)
? Minor home issues (Offering repair credits can be more effective than lowering the price.)
Which Seller Concessions Are Most Effective?
1. Closing Cost Assistance – A Buyer Favorite!
In 2024, the most popular seller concession was covering part of the buyer’s closing costs.
Why? Many young buyers save up for a down payment but struggle to cover closing costs, which can be thousands (or even tens of thousands) of dollars. If a seller offers to help, buyers are more likely to say yes to the deal immediately!
? Real Example: A real estate agent in Salt Lake City—where the average buyer is 33 years old—notes that many first-time buyers can handle the down payment but not the extra closing costs. By offering closing cost assistance, sellers significantly increase their chances of closing the deal!
2. Rate Buydowns – Helping Buyers Save on Interest!
A 2-1 buydown has been one of the hottest seller concessions in the past two years.
? How does it work?
? Year 1: The seller pays to lower the buyer’s mortgage rate by 2%
? Year 2: The rate is reduced by 1%
? Year 3: The original mortgage rate kicks in
This means the buyer enjoys lower monthly payments for the first two years, making it easier for them to commit to the purchase!
? Where is this most common? New construction homes. Many builders offer this incentive because they have the budget for it and can market it more effectively.
3. Repair Credits – Small Investment, Big Results!
Most buyers want a move-in ready home, so offering a repair credit can be more appealing than lowering the price.
? Real Example:
A seller in Miami discovered six roof leaks during the home inspection, and fixing the roof would cost $120,000. If the deal fell through, not only would they need to find a new buyer, but they’d also have to disclose the issue, making the home harder to sell.
The smart move? Instead of losing the buyer, the seller offered a repair credit and let the buyer choose between that or a price reduction. The buyer opted for a lower price, and the deal closed successfully!
How to Use Seller Concessions Wisely
1?? Understand the market: If competition is high, offering concessions can help you stand out.
2?? Get a pre-listing inspection: Fixing issues upfront reduces the need for repair credits later.
3?? Customize your concessions: Some buyers prefer cash assistance, while others want a lower mortgage rate—adjust based on what works best for your buyer!
Bottom Line: Seller Concessions = More Buyers + Faster Sales!
Smart sellers are already using concessions to sell their homes faster—and often for a better price. If you’re planning to sell, talk to your real estate agent about how strategic concessions can help attract more buyers and close the deal quickly!