I've read a few books on Negotiation and am interested to finding very creative ways to structure a deal on a rental property using seller concessions. I was wondering what recent seller concessions everyone has asked for that helped make the deal work for both parties. Any particular strategies you used in the process? Thanks in advance.
Seller concessions generally means you're adding the closing costs on top of the loan. Most sellers really aren't going for that these days. Problem is that the property will still have to appraise at the higher amount. Typically, you would offer a higher amount and say in the offer that it includes a % request for seller concessions. In a buyer's market, that's fine. In a seller's market where prices are usually at the top of the market, it's hard to add another 3% (conventional loan max) to 6% (FHA max) on top for seller concessions. Asking for concessions in a seller's market weakens your offer versus other offers with larger cash down payments and not asking for concessions.
That being said, some parts of the country might see a flattening or slow down before other parts of the country. Someone looking to move their property that's been sitting for awhile might go for it. So, if there is some headroom, it's fine to ask for a concession. Just be clear, what you're asking for is to have some of the closing costs added to your loan.
Thanks for the response. Much appreciated. I didn’t mean concessions are purely money at closing. But other options to ask for such as seller financing, less earnest money deposit, home warrantee included, closing date moved, possibly short term rent to the owner if they need time to move out. And so on. Just looking for creative solutions to add value to the seller to get something of value in return.