Which statement best describes seller concessions?

Which statement best describes seller concessions?

• A. Seller concessions are credits offered by the seller to cover closing costs.
• B. Lender credits reduce closing costs funded by the lender.
• C. They are credits to be used for property repairs after closing.
• D. They increase the buyer's monthly payment.

Answer: (A)

Seller concessions are credits the seller provides at closing to help the buyer cover closing costs. This means the buyer can bring less cash to closing, or the loan amount can be adjusted to account for those costs. These credits come from the seller and are shown as a buyer credit on the closing statement, making the purchase more affordable upfront. This is different from lender credits, which originate with the lender and reduce closing costs by offering a higher rate or discount points rather than a seller-funded allowance. While a repair credit can be negotiated, it’s not the primary idea of a seller concession, which is focused on closing costs rather than post-closing repairs. And concessions don’t inherently increase the buyer’s monthly payment; they mainly affect the upfront cash needed or the loan amount, depending on how the deal is structured.

Seller concessions are credits the seller provides at closing to help the buyer cover closing costs. This means the buyer can bring less cash to closing, or the loan amount can be adjusted to account for those costs. These credits come from the seller and are shown as a buyer credit on the closing statement, making the purchase more affordable upfront.

This is different from lender credits, which originate with the lender and reduce closing costs by offering a higher rate or discount points rather than a seller-funded allowance.

While a repair credit can be negotiated, it’s not the primary idea of a seller concession, which is focused on closing costs rather than post-closing repairs. And concessions don’t inherently increase the buyer’s monthly payment; they mainly affect the upfront cash needed or the loan amount, depending on how the deal is structured.