What is a seller concession?

A seller concession refers to a financial incentive provided by the seller to assist the buyer in covering various costs associated with closing the real estate transaction. This can include costs such as closing fees, prepaids, or other expenses that can often be a barrier for buyers. By offering a concession, the seller helps make the home more affordable and appealing to potential buyers, facilitating the sale process.

This practice is particularly common in negotiations, where the seller might offer to cover a portion of the closing costs as a way to sweeten the deal, especially in competitive markets or if the property has been on the market for an extended period. The actual amount of seller concessions can vary based on local market conditions and the specific terms negotiated between the buyer and the seller.

In contrast, the other options do not accurately define a seller concession. Options referring to mortgage insurance or lender fees are unrelated to concessions and focus more on other aspects of financing. An increase in the sale price could potentially occur if the seller tries to offset their concessions, but that does not define what a seller concession is. Hence, recognizing that seller concessions are specifically aimed at supporting buyers during the closing process is crucial for understanding this term within the context of real estate transactions.