Allowances when selling - is this normal?

[Dianne Phelps]

We rehab in San Antonio and when we have our houses under contract to sell there is ALWAYS an offer with an allowance - ex 100k with 4k allowance bringing the net down to 96k.  That being said, these are usually homes for sale for less than 200k.  When I was in Austin I almost never saw these allowances.  Thoughts? Is it common to have all these buyers with no cash on hand to close? Is it just an annoyance we have to deal with? 

[Tim Macy]

When you run comps in the neighborhood, terms and seller concessions should be taken into consideration.  Most areas show some consistency with what you can expect to pay and types of financing types typically used.  Hopefully this can help you run your numbers going in.  

Seller concessions are normal in most neighborhoods in San Antonio. Most buyers in this market have very minimal cash to come out of pocket. Keep that in mind when taking an FHA offer over a conventional, know that if there are any appraisal issues, the buyer will have nothing to cover the difference.