If you’re unfamiliar with seller credits, seller credits are when the seller offers the buyer money at closing to sweeten the deal. Buyers love seller credits because they go towards their closing costs, resulting in less money the buyer has to spend. In addition to closing costs, these credits can also help cover the cost of needed repairs to the home.
Sellers usually offer credits so they can help a deal move forward. However, this shows that the prevalence of seller credits depends on whether it’s a buyer’s or seller’s market. If it’s a seller’s market, sellers might not have to give these credits as incentives to sweeten their deal.
Here are some of the most common scenarios when giving or using seller credits go into play.
Offset the cost of repairs
After a home inspection, there might be some damage that needs to be repaired. The buyer might ask for the damage to be fixed as part of their negotiation. However, there might be a chance that the seller wants to sell the house faster than it would take to repair this damage. In this case, the seller can offer the buyer the amount of money it will take to repair the damage instead of completing the repairs themselves. These credits would then go towards the seller at closing.
Sweeten the deal for a buyer who is unsure
Say you’ve listed your home months ago yet you can’t seem to lock down any offers. You can use seller credits as an incentive. In this case, you would keep your listing price the same but then include maybe a $5,000 seller credit. This could be attractive to buyers because it could help them save on those extra closing costs that they might not have budgeted into their budget.
Push for a faster sale
In some cases, a seller might need to sell their home as fast as possible. To attract buyers quickly, you could offer a seller credit for buyers to use to reduce their costs on the house. Nowadays, people are looking to save money wherever possible, so seller credits are huge if you’re looking to sell your home quickly.