What is seller’s help, and how does it affect buyers and sellers? Today, I’ll be explaining just that.
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What is seller’s help, and how does it affect buyers and sellers?
Essentially, seller’s help is money from the seller paid to the buyer at closing. Seller’s help is also known as closing cost assistance, and it's designed to reduce the buyer’s upfront costs at closing.
However, there is a limit to the amount that buyers can ask sellers to pay. Typically, that limit is anywhere between 3% and 6%. The amount will also vary depending on how much a buyer is putting down on their loan, as well as their loan type.
For example: A buyer who is purchasing a $100,000 and is able to ask up to 6% would receive $6,000 toward closing. When making offers as a buyer, you may sometimes have trouble getting sellers to agree to this.
A $100,000 offer where the buyer is asking for $6,000 in seller’s help is essentially the same as a $94,000 offer. To combat this, buyers can consider building their request into their offer. This way, they are supplementing the seller for the expense.
A buyer who wants $5,000 in selller’s help, for instance, might change their offer from $100,000 to $105,000 so that the seller feels as if they are being compensated.
However, sellers should be prepared for buyers to ask for this assistance. Sellers are not obligated to accept a request for assistance, but most offers that are put forward today do come with such a request. It also doesn’t always need to be percentage based. A buyer may ask for a specific dollar amount.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.