Can home buyers receive money from sellers?

Is this real?  Can a home buyer actually ask a home seller to give them money? Can home buyers receive money from sellers? Short answer: Yes. These are typically referred to as “seller concessions”.

Seller Concessions are monies a seller provides a buyer to cover a portion, and sometimes all, closing costs.  Wow, sellers giving money to buyers…  I wonder if I can get the car dealer to give me money to buy one of their cars…hmmm….  Buyers can incur closing costs of thousands of dollars in addition to the purchase price of the home. It is possible to negotiate for seller concessions to be used for other items like repairs and other costs.

Yes, home buyers can ask a home seller to provide concessions.  This starts with annotating this as a term in the offer.  When the seller signs the offer (hopefully), that offer becomes the sales contract and the seller concessions are now a part of the contract.

Just because a buyer can ask for seller concessions, doesn’t mean it’s always a good idea.  Asking a seller for money can make a buyer’s offer less attractive.  The offer could be declined and someone else’s offer accepted.  This is a matter of strategy, so definitely seek advice from your real estate agent.  Your real estate agent may be able to gather information from the seller’s real estate agent and also consider market information to assess the prospects of negotiating for seller concessions.

There are limits to how much sellers can provide, and buyers can accept, for seller concessions.  These limits are set in federal mortgage rules and are applicable to specific types of home loans. In no case can seller concessions exceed the actually amount of a buyer’s closing costs.

CONVENTIONAL HOME LOANS
Down Payment	Limit To Seller Concessions
Less than 10%	3% of sales price
10% – 25%	6% of sales price
More than 25%	9% of sales price
FHA HOME LOANS	6% of sales price
VA HOME LOANS	4% of sales price
USDA HOME LOANS	6% of buyer’s loan amount