It’s natural for a home inspector to find issues with the house. Especially if it was listed “as is” and there isn’t anything about repairs being made in the contract after a home inspection. However, sometimes the price can be negotiated, or a buyer can receive “seller’s credit” to help negotiate a purchase. But what is seller’s’ credit? Allow us to explain.
Seller’s Credit and Assist Explained
Seller’s credit, (also known as seller’s assist or seller’s contribution), is an instance when the seller gives you money to pay for the closing costs on a house. Some or all of your closing costs, fire insurance, and possibly personal hazard insurance can be covered by the seller. In the event that the seller covers the closing costs, you will only pay your down payment. According to law, the seller cannot cover your down payment.
If there happens to be additional money left over from the seller, the seller will be pocketing this money. Under the law, the buyer cannot receive any money from the seller. Sorry!
Seller: Don’t Give Up More Than You Have To!
Always remember that a home inspection report is simply a detailed report of the condition of your home. If you’re selling the home “as is” don’t worry about making repairs unless you absolutely feel it is necessary or beneficial to the sale. Don’t allow the buyer to manipulate you into negotiating sale price or giving seller credit if you know the house is worth what you’re asking.
Buyer’s Will Almost ALWAYS ask for Credit
It’s rare that a buyer won’t try to negotiate or ask for credit. Because of this, as the seller, give yourself some cushion. If the buyer starts to negotiate, instead of getting less than what you think it’s worth, you’ll end up with just what you wanted. It’s a good idea to have any easy repairs or those you’d rather not show on a report done prior to inspection. This will help you avoid having to give credits or dealing with a buyer trying to renegotiate the price.
How Do I get a Seller Credit?
To get a seller’s credit, it must be included in the purchase or sale agreement. This makes it part of the price negotiation for your home and thus your real estate agent will negotiate this for you. However, the sale credit should be stated as a dollar amount and not a percentage. The reason for this being that if it is stated as a percentage, the lender will require an addendum to the purchasing contract stating it in an exact dollar amount. Then there is more hassle, more stress and more things to worry about.
In the end, getting or giving seller credit all depends on what you’re selling the house for, how much its worth, what issues were found during a home inspection, etc, etc. If you’re purchasing a house and trying to negotiate price, seller’s credit may be an option. If you’re selling, consider negotiating seller’s credit in place of repairs or other issues the seller may have brought up during or after a home inspection. Either way, be informed and ask questions to find out what options are best for you.