Sellers Make Concessions

Sacramento home sellers need to be aware of what is behind any Real Estate Sales Price or in other words the SOLD price of a home that has closed.

 Many savvy potential Sacramento home sellers are watching the real estate market to see what their neighbors homes have sold for. Good idea to always keep abreast of your neighborhood. But, that price does not necessarily reflect the real price that the Sacramento home sellers settled on with their Sacramento Home Buyer, in terms of net to the Sacramento home seller.

Many of the contracts today, that the Sacramento home sellers are accepting have what we call concessions. Concessions amount to money paid by the Sacramento home seller for the Sacramento home buyer’s closing costs at the Close of Escrow.

This can, and does significantly reduce the amount that the Sacramento home seller nets at the end of the escrow period. For example: A house is listed for $480,000. The Sacramento home buyer offers to pay $470,000. Also, the home buyer asks the Sacramento home seller to pay $15,000 toward his/her Closing Costs.

 As you can see the Sacramento home buyer has just reduced the $470,000 by another $15,000. More and more of the Sacramento home buyers are writing offers like this, since it is a Home Buyer’s Real Estate Market.  

Now, the kicker here, is that the price that the property shows as the SOLD price is $470,000 not $455,000. The reason is quite simple, it’s not that we are all trying to hide this fact from the public, but the home buyer’s Lender is loaning money based on $470,000 and the Home Buyer is expected to come to the table with the closing costs which have nothing to do with the money being borrowed on the loan (the home seller, in this case  is paying for the home buyer’s  closing costs in order to sell his/her house).

The taxes and tax base is reported to the County as $470,000. The main reason that I share this information with you, is so that you are completely informed when looking at SOLD prices in the paper, postcards or Internet.  Remember that Sacramento home sellers in today’s real estate market are making concessions and that the sold  price does not always reflect a true picture.  

That is just another reason why some of these websites like Zillow and How Much Is My House Worth … are off considerably when they post a home sale. Plus these same websites price value a house that is in total disrepair the same as the house that has been remodeled. Definitely, a discrepancy.

Later I will discuss the aspects of fraud as seen in many home offers today which you should be made aware of so as to avoid.

Related Articles:

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What Every Buyer Should Know

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First Time Home Buyer Check-off List Part I

First Time Home Buyer Check-off List Part II