Sellers Make Concessions

November 24th, 2006 categories: Real Estate, Real Estate Tips, Sacramento, Seller

Sold House Sellers need to be aware of what is behind any Real Estate Sales Price or in other words the SOLD price.

Many savvy potential sellers are watching the Real Estate market to see what their neighbors homes have sold for. Good idea to always keep abreast of your neighborhood. But, that price does not necessarily reflect the real price that the sellers settled on with their Home Buyer, in terms of net to the seller.

Many of the contracts today, that the Sellers are accepting have what we call concessions. Concessions amount to money paid by the Seller for the Home Buyer’s Closing Costs at the Close of Escrow.

This can, and does significantly reduce the amount that the Seller nets at the end of the escrow period. For example: A house is listed for $480,000. The Home Buyer offers to pay $470,000. Also, the Home Buyer asks the Seller to pay $15,000 toward his/her Closing Costs.

As you can see the Home Buyer has just reduced the $470,000 by another $15,000. More and more of the Home Buyers are writing offers like this, since it is a Buyer’s Real Estate Market.

Now, the kicker here, is that the price that the property shows as the SOLD price is $470,000 not $455,000. The reason is quite simple, it’s not that we are all trying to hide this fact from the public, but the Lender is loaning money based on $470,000 and the Home Buyer is expected to come to the table with the closing costs which have nothing to do with the money being borrowed on the loan (the seller is paying for those costs in order to sell his/her house).

The taxes and tax base is reported to the County as $470,000. The main reason that I share this information with you, is so that you are completely informed when looking at SOLD prices in the paper, postcards or Internet. Remember that Sellers in today’s Real Estate market are making concessions and that the price does not always reflect a true picture.

That is just another reason why some of these websites like Zillow and How Much Is My House Worth … are off considerably when they post a home sale. Plus these same websites price a house that is in total disrepair the same as the house that has been remodeled. Definitely, a discrepancy.

Later I will discuss the aspects of fraud as seen in many home offers today which you should be made aware of so as to avoid.

Why is Buying A House Stressful?

Why Should a Seller or Buyer Choose Remax?

Where is Chicken Little?

What Every Buyer Should Know

Shall I Buy A House or Rent?

First Time Home Buyer Check-off List Part I

First Time Home Buyer Check-off List Part II

This entry was posted on Friday, November 24th, 2006 at 10:54 am and is filed under Real Estate, Real Estate Tips, Sacramento, Seller. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.