What Are Seller Concessions?

Contributions made by sellers to buyers to offset closing costs or other expenses.:

• Closing costs, repairs, and other financial incentives.

• Cooperating buyer agent compensation

Concession Limits for Different Loan Types

• Conventional Loans: 3% to 6% for primary residences, 2% for investment properties.

• FHA Loans: Up to 6%.

• VA Loans: Up to 4% (primarily for primary residences).

• USDA Loans: Up to 6%.

Lenders have spoken.

• Seller payment of buyer agent commissions are excluded from concession limits.

• Impact: Continuation of current home transaction practices.

What does this all mean?

• The buyer agent's compensation can still be managed effectively within the escrow closing process. 

• The compensation can be treated as a seller debit, allowing it to be included in the purchase price and subsequently financed. 

• This method ensures that buyers do not have to pay the buyer agent's commission out of pocket.

• The commission becomes part of the overall financial structure of the transaction, maintaining the seamless operation of current home transaction practices. 

Even prior to the NAR settlement taking effect, we negotiated seller concessions to our buyers in about 50% of all transactions.

That was in addition to the seller paying the buyer’s agent compensation nearly 100% of the time.