Dear Dave,

We’re getting ready to sell our house but know the market is shifting. Someone suggested offering "concessions" to make our listing more attractive. What are concessions exactly, and when does it make sense to offer them?

—Pat & Simone, Grand Junction

Dear Pat & Simone,

Great question—concessions are becoming more common these days, especially as more homes are for sale and buyers get more picky. Before you launch your listing next year, understanding concessions will give you some useful tools to close a deal on favorable terms.

Here’s what you should know, and how to use that knowledge wisely.

What are Concessions?

Concessions are incentives that a seller offers to help sweeten a deal for buyers.

These might include:

• Paying some or all of the buyer’s closing costs
• Covering repairs (or offering credits in their place)
• Lowering the sale price in some way to account for things buyers will have to fix or update after they take possession

Concessions give buyers more breathing room by reducing how much cash a buyer may have to bring to closing (or soon after), and that can make your house much more appealing and ease the pain for buyers who are more and more "cash-strapped".  

When Do Sellers Use Concessions?

With more homes on the market, buyers have more options. That means sellers who want to sell quickly or stand out often need to be more flexible and be willing to think outside the box.

If your home has been listed a while with decent showings but no offers, or if buyer feedback points to certain needed repairs or perceived costs after purchase, offering concessions can help remove those barriers.

What to Watch Out For

• Don’t over-promise. Only offer what you can comfortably deliver. If you offer to cover repairs but underestimate their cost, you may end up eating more than you planned.  In other words, make sure to get a bid on said repairs.....I just dont like surprises. 
• Be clear in the contract. If you agree to a concession—whether credit, repair, or closing cost cover—make sure it’s spelled out in writing with amounts, deadlines, and what’s expected.
• Know your breakpoints. Concessions can help, but if your price is too far out of market range, no concession will totally compensate. Sometimes adjusting the list price or improving the condition is better than increasing concessions.  There is no doubt about it.....Generally speaking, there are not enough concessions to sweeten the deal enough if your home is substantially overpriced. 

My Take If I were advising you, here’s how I’d approach it:

• Watch your early feedback. If people are touring but then saying “we’ll need to spend X to fix this,” offer a credit or repair concession and dont be afraid to call the buyer's agent right away to remove the hurdle.
• Build in some wiggle room from the start. You could list at a strong but realistic price and be ready with a concession strategy, rather than list high and expect buyers to magically show up.  Magic only works in movies, HGTV reality shows and Las Vegas! 
• Use concessions selectively. They can make your listing more competitive without giving up too much.....if used correctly they can be super helpful.

Concessions aren't a weakness—they’re a negotiation tool. Used wisely, they help deals happen without you sacrificing too much. Here’s to getting your home sold with less stress—and strong results!

Dave Kimbrough
The Kimbrough Team – RE/MAX 4000

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