It is very common for a buyer and seller to negotiate a seller credit in lieu of repairs after a buyer does a home inspection. Most sellers do not want to bother with doing a small amount of repairs. And some sellers may not have the money until after they go to settlement. So they negotiate a credit and offer to pay some money at settlement for these repairs. The problem comes when the Realtors word this incorrectly in the contract and end up causing last minute problems.
Blog Category: seller credits
It is important to know how much a seller can contribute to a buyer’s closing costs. There are maximum seller financing contributions. This also applies to any other interested party, such as a realtor, builder, or lender. Many people get confused as to what is allowed. Some realtors write up a sales contract with dollar amounts that are not allowed per mortgage guidelines. This will cause problems with the loan. Below are the current maximum seller financing contributions allowed:
Watch out for the asterisk in a sales contract! If you are negotiating with a builder to buy a new construction home and are being offered an incentive to use the builder’s preferred lender or title company, watch out for the asterisk! Or sometimes if you are being asked to consider using an “affiliated service provider” by a Realtor, remember you can always say “no thank you.”