Dana Voelzke

I recently negotiated a transaction on my buyer's behalf. My buyer worked hard over several years to get her finances in order and scrape together enough cash for the down payment. However, she was short the cash to cover closing costs. When she spoke with her loan officer, they decided that the best way to approach this would be to set a ground rule that any home she would buy would need to include a seller's concession for x% of the sales price.

I always consult with the loan officers who have first pre-approved my clients so that I know what to expect. There are a few basic things we need to know up front and whether or not the buyer will require a seller's concession for closing costs and prepaids is one of them.

When I presented my buyer's offer to the listing agent, there was some resistance to the seller's concession. I believe this resistance mainly stems from a mistaken belief that a seller's concession is somehow illegal or dishonest, or that it is somehow a sign of weakness for the seller to grant one. This was confirmed by a quick browsing of some real estate websites offering Q&A discussion for the consumer. Opinions and explanations varied widely and were confused.

A seller concession could be used by the seller to preserve the sales price while sweetening things for the buyer by throwing in any number of incentives ranging from paying a certain amount towards closing costs to buying down interest rates to pre-paying condominium fees as an incentive to sell the property. However, in this case, it is simply a way to enable a sale by rolling a cash cost of the purchase into the mortgage. Of course there are lender rules for seller concessions and of course the buyer may not come away with cash in their pocket. But I also have to make sure our attorney is aware of the sellers' concession and that the amount we're requesting will be fully absorbed (if not, the funds could revert back to the seller).

When negotiating a seller concession I try to simplify by making the seller's concession the buyer's problem (which it is in this case) and direct the discussion toward focusing on the seller's net price, which is what matters to them.

I understand there are circumstances where a seller's concession is not possible, such as when the profits from the sale will be taxed, increasing conveyance taxes (like we have in CT), some short sales/REOs and any number of other situations, which is fine.

What do you think about seller concessions? Are you hesitant to use them?

Are you looking for a home in a great neighborhood with excellent schools with affordable property taxes? This is your opportunity to learn more about the neighborhood and tour some great homes. This Sunday Oct. 25th from 1-4pm McCafffrey will hold simultaneous open houses at seven different properties ranging in price from $250,000 to $550,000 for sale in Southern New Milford and Brookfield. Click here for a map and print out our address list for further details on each home. Sign up to receive a list of the best buys in your price range on my website.

While touring homes in New Fairfield recently with a client who recently relocated from out of town, our conversation turned to sweet corn, one of my summer barbecue favorites. Turns out, her husband is a big corn fan too. "What's Halas?" she asked. Since consistent, good quality sweet corn is hard to come by, I promised her a blog post complete with map about Halas Farm Market, one of the best local spots to pick up fresh produce in Northern Fairfield County. Besides the great corn, Halas has an annual pumpkin painting contest that benefits charity. See their website for details. They also have lovely plants and garden supplies, pictured below. Enjoy!!

Map to Halas

If you're thinking about relocating into the Greater Danbury area, it takes a while to learn to navigate the area. Our roads are were not exactly planned on a grid system around here. The Federal Road shopping hub on the Danbury/Brookfield line has a lot to offer. There is a Home Depot and a Lowes within less than a mile of each other, a Best Buy, a huge movie theater, Stew Leonard's - a great local fresh dairy/farmers market style grocery store, Kohls, numerous furniture stores and more.

One of my favorite places in Greater Danbury to stop in for a quick bite to eat is the Costco snack booth. My husband and I stopped in on our shopping day for a slice of pizza for lunch. A frozen yogurt on a hot day after a long shopping trip certainly hits the spot. Our local Costco parking lot is full almost any given day with customers from Northern Fairfield County, Southern Litchfield County, and even many cars with New York license plates from the eastern part of the state near Brewster.

Click below for a map and directions.

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Below is a snapshot of market data for the six towns in Greater Danbury from January to August.

Coming in to the fall market we see a lot of first time buyers in the market competing for homes because of the $8,000 first time home buyer tax credit, but also because of improved affordability resulting from lower interest rates and prices. In Danbury alone, there were 20 closed sales under $350k in August and there had been 26 in July, whereas typically activity levels would drop off. For more info on this phenomenon I suggest reading Janet Guilbault's blog Outsmart the Crowd: Skip the $8000 Tax Credit and Wait to Buy .

Also, the number of single family home sales in the $350k to $450k price range was 9 in August, compared to an average of 5.3 during the last 12 months. This is and encouraging sign. Investors out buying REO's and multifamily homes in cash. Over two thirds of all multi-family properties on the market right now are short sales or REO's which is making them attractive for distressed investors, even as rents continue to fall. Some are taking advantage of the glut of REOs to purchase their first rental property.

So what does this mean for me? It depends, of course!! When the market enters a down cycle, the cycle doesn't just last one year. For those who are waiting thinking that things will get better in 2010, I assure you it will take longer than than. The drumbeat from economists about the "double dip" recession continues to grow. The fact is that the cycles in real estate are long, 5-10 year cycles. This market presents some interesting opportunities, but only for those who act conservatively and are willing to take a long term view.