A monetary concession offered by a property’s seller to the buyer, typically during a real estate transaction. This agreement reduces the amount of funds the buyer needs to bring to closing. For example, instead of lowering the asking price, a seller might offer a $5,000 reduction against the buyer’s closing costs. This can be used to cover expenses such as appraisal fees, title insurance, or property taxes.
This financial arrangement can be advantageous, particularly for buyers who are short on cash but qualify for a mortgage. It helps facilitate deals that might otherwise fall through due to funding constraints. Historically, such incentives have played a crucial role in maintaining market activity, especially in slower economies or when interest rates are high. They provide flexibility in negotiations and allow buyers to address immediate financial hurdles associated with purchasing property.
