With the recent changes (8/2024) involving buyer agent compensation, we are starting to see more offers with seller credits these days.But, did you know there is actually a cap on how much buyers can receive from the seller regarding these credits? It changes loan type to loan type and also by how much they’re putting down.
It can get super confusing, so New American Funding made a chart to use for reference!
This provides a quick overview of the allowable seller concessions for different mortgage loan types. Seller concessions are a great way to reduce your out-of-pocket expenses for things like closing costs, prepaid items, and discount points.
Joe also has some strategies for buyer agent commission should the seller not be offering cooperative compensation that he would be happy to talk to you about.
information provided by
Joe Demarco
New American Funding
615-735-7431
https://www.newamericanfunding.com/mortgage-loans/joedemarco
USDA Loans (Primary):
Up to 6%
I’ve attached a visual “Seller Concession Cheat Sheet” that provides more details on this topic
Frequently Asked Questions
Are there limits on seller credits?
Yes. Lenders cap seller credits based on loan type and down payment.
Why are seller credits more common now?
Since the August 2024 changes to buyer agent compensation, more offers ask for seller credits.
What happens if a credit exceeds the limit?
The excess cannot be used, so structure the offer with your lender’s limits in mind.
Related reading: When Concessions Make Sense in Real Estate Deals and With Zillow, Google, and AI, Why Do They Still Need a Real Estate Agent?
