McDowell Mountain Ranch Trail Talk

What is a “seller contribution?”

Home / Buyer Help FAQ / What is a “seller contribution?”

A sale agreement typically includes both a purchase price for the property as well as terms and conditions.  It sometimes happens that a buyer will make an offer subject to certain terms. (I’ll buy your house, but I want to keep the washer and dryer, etc.)

One possible condition concerns “seller contributions.” (For example, I’ll buy your house if you will pay the first $x of my closing costs.)  Lenders will generally accept seller contributions as part of a transaction providing they are written into the sale agreement, fully disclosed and only represent a limited fraction of the sale price.  Different loan programs have different contribution caps.  Lenders and brokers can provide specific advice.

A seller contribution can be a useful bargaining chip in slow markets.  (Buy my house and you can have a credit of $x at closing.)  It’s a thought that goes a long way with cash-strapped home buyers.