Navigating the Shifting Real Estate Market: Why Seller Concessions Could Be Your Best Strategy

For the past few years, the real estate landscape has primarily favored sellers. However, as inventory levels rise and the market dynamics shift, sellers find themselves needing to adapt. According to insights from the National Association of Realtors (NAR), this change in the market signals that sellers may need to offer more attractive deals to encourage buyers. One powerful strategy gaining traction is the concept of seller concessions.

What Are Seller Concessions?

Seller concessions refer to various incentives that a seller offers to make their property more appealing to potential buyers. These concessions can significantly enhance a buyer's experience and could be the deciding factor in closing a deal. As highlighted by NAR data, 24% of sellers opted to include concessions in their sales agreements in 2024. Here are some common types of concessions you might consider:

1. Covering Closing Costs

One of the most prevalent forms of concessions is sellers agreeing to pay a portion (or all) of the buyer's closing costs. These costs may include appraisal fees, title insurance, and loan fees, providing substantial financial relief to buyers.

2. Price Adjustments

Instead of completing repairs that a buyer may require post-inspection, a seller might choose to lower the purchase price, allowing buyers to budget for any necessary updates or fixes.

3. Adding a Home Warranty

To enhance peace of mind for buyers, some sellers offer a home warranty that covers essential repairs for the first year of ownership. This adds significant value and helps mitigate concerns over potential issues with the home.

4. Non-Monetary Extras

Not all concessions have to be monetary. For instance, if the buyer is transitioning from an apartment and lacks certain essentials for their new home, offering to leave behind a lawn mower or patio furniture could make a positive impression.

Worried about the cash flow? Don’t be. Seller concessions are subtracted from your profit at closing, meaning you won't need to show up with additional funds.

How Concessions Help Sellers Achieve Their Goals

Adopting a willingness to offer concessions can serve as a strategic advantage in a more balanced market. Dennis Shirshikov, a Professor of Finance and Economics at City University of New York/Queens College, emphasizes that “pricing homes realistically and being willing to offer concessions will be key to closing deals in a less frenzied market.”

Consider this scenario: You receive an attractive offer from a buyer only to discover, post-inspection, that they require fix-ups before finalizing the sale. Instead of reopening the search for a new buyer, consider offering a concession. You can either handle the repairs yourself or offer a concession that allows them to cover the repair costs with their closing savings.

Partnering with an Agent: The Key to Successful Negotiations

Engaging an experienced real estate agent is essential. A skilled agent can provide invaluable assistance in navigating these negotiations and help ensure that any concessions made align with your financial goals. Striking the right balance is crucial, allowing you to entice buyers without sacrificing your profits.

Bottom Line

As the housing market shifts towards equilibrium, seller concessions are becoming a prominent tool to attract buyers. The right agent can guide you through understanding when to offer concessions and how to make them work in your favor.

What’s a concession you’d consider to move things along?

If you're thinking of selling your home in this new landscape, let's discuss how we can leverage seller concessions to your advantage. Please feel free to reach out, and together, we'll craft a winning strategy to ensure you get the best deal possible!