Are seller concessions taxable?

Yes. According to Intuit TurboTax, sellers’ concessions are considered “sales expenses” and therefore tax-deductible. As the seller, you’re allowed to deduct selling expenses from the sale price, including: advertising.

Are seller concessions paid out of pocket?

The amount is taken from the money the seller makes from the sale of the home. For example, if the seller receives $100,000 from the sale but agrees to pay $3,000 in concessions, they’ll receive $97,000 from the sale of their home.

What does it mean to ask for seller concessions?

closing costs
Seller concessions are closing costs that the seller has agreed to pay. Sometimes, you can ask the seller to contribute to specific closing costs. Other times, sellers may simply pay a percentage of the total closing costs.

What do you need to know about seller concessions?

Sellers concessions are contributions from home sellers to help their buyer offset the costs of buying a home. Often, concessions come in the form of credits towards the buyer’s closing costs. Buyers ask for seller concessions to reduce the amount of money they have to pay at closing.

What does seller concession mean in HUD 1?

Seller Concession is in addition to any sum Seller has agreed to pay or credit Buyer elsewhere in this Contract. Seller Concession will be reduced to the extent it exceeds the aggregate of what is allowed by Buyer’s lender as set forth in the Closing Statement, Closing Disclosure or HUD-1, at Closing. Loading…

Can a seller concession cover a down payment?

Seller concessions cannot cover a buyer’s down payment. Furthermore, the total amount that the buyer can receive will be capped based on their loan type (more on that in the following section). The maximum amount a buyer can receive in seller concessions is capped based on their loan type and how much money they put down.

What kind of disclosure forms do sellers need?

Brokers know that most sellers of residential property are required by law to give the buyer two disclosure forms: the Residential Property and Owners’ Association Statement (RPOADS) and the Mineral and Oil and Gas Rights Mandatory Disclosure Statement (MOGS).

When to use seller concession in closing statement?

The Seller Concession may be used for any Buyer Fee, cost, charge or expenditure to the extent the amount is allowed by the Buyer’s lender and is included in the Closing Statement or Closing Disclosure, at Closing.

When is seller more motivated to offer concessions?

This will heavily influence your ability to negotiate for concessions. Sellers are much more motivated to offer concessions when their home has been sitting on the market for a while, or when it’s a buyer’s market.