Posted by youngsterz (UT) on February 22, 2002 at 23:26:19:
Seller concessions are quite common, and are typically used to cover loan costs or part of the down payment. If they want it as part of the $125,000 price, it does reduce your net. If you agree to the 6% seller concession, but at a $132,500 price (or less; up to you on the price) then it is the same to you. You just have to be sure that the appraisal will come in to cover that purchase price.
You should be able to write that concession off, against the purchase price, so your net is the same.
One of the reasons people do this is to force the higher appraisal, subsequently increasing the actual dollar amounts rolled into the bank loan, while reducing the amount of money the buyer has to come up with out of pocket at closing. Very common practice, and again, as long as the appraisal will cover it, the bank is fine with it, sometimes even suggesting it to their clients.