Buying a home is a major financial investment, and for many buyers, it can be challenging to come up with the funds needed to cover all of the associated expenses. That’s where a seller’s assist comes in. A seller’s assist is a financial incentive provided by the seller to help cover some of the costs associated with purchasing the property. Here are some tips for using seller’s assist as a buyer.
Related: Why you should buy a house
What is Seller’s Assist?
A seller’s assist is a form of financial assistance provided by the seller to the buyer. You can use this assistance for a variety of expenses, including closing costs, property taxes, and home inspections. The amount of the seller’s assist can vary, but it is typically a percentage of the sale price or a flat rate.
The amount that you can receive will depend on a variety of factors. This includes the type of loan you are using, the lender’s requirements, and the seller’s willingness to provide assistance. In some cases, you may be able to receive up to 6% of the sale price in assist.
Seller’s Assist Example
Let’s break down a real-world example:
You want to buy a house for $200,000 and you offer a conventional loan with 5% down. Closing costs amount to $15,000 for the deal.
Without any assist, the total cost to purchase the house will be $25,000. Now what about if we ask for 6% seller’s assist on the deal?
Your down payment goes down by 6% of the $200,000 home price. Instead of $25,000 at the closing table, you now only need $13,000. That’s a total savings of $12,000 for your overall down payment on the home!
Remember that $12,000 will be added to your loan which will slightly increase your monthly payment. But in this scenario, the increase will be less than $100/month, even with mortgage rates at 7%. However, saving $12,000 in costs could be the difference between buying the house or having to move on.
Work with a Real Estate Agent
Working with a real estate agent who has experience with seller’s assist can be beneficial. They can help you negotiate with the seller and determine the best amount of assistance to request. Your agent can also help you understand the terms and options and ensure that it is included in the purchase agreement.
Once you have identified a property you, you can make an offer that includes a request for seller’s assist. Your offer should include the amount of assistance that you are requesting, as well as any other terms or conditions that you would like to include.
Be Prepared to Negotiate
The seller may not agree to provide the full amount of assistance that you are requesting. In some cases, the seller may counteroffer with a lower amount. It’s important to be prepared to negotiate and work with the seller to come to an agreement that is beneficial for both parties.
A good tip to consider when using seller’s assist is to offer a slightly higher price than you would’ve before. If you were going to offer $10,000 below asking price, it might be advantageous to offer asking price with seller’s assist.
This can help make up for the additional costs the seller is on the hook for and will increase your chances of landing the deal. In the end, you’re just moving the money around. You’ll be paying for it over a 30-year span instead of all at once.
Use it Wisely
If you are able to secure a seller’s assist, it’s important to use the assistance wisely. While the funds can be used to cover a variety of expenses, it’s important to prioritize those that are essential to the purchase of the home. This may include items such as closing costs, property taxes, and home inspections.
In conclusion, a seller’s assist can be a valuable tool for buyers who are looking to purchase a home. By understanding what a seller’s assist is, how much assistance you can receive, and how to negotiate with the seller, you can increase your chances of receiving assistance that can help you cover some of the costs associated with purchasing a home. Working with an experienced real estate agent can also be beneficial in navigating the process.
