Thinking about offering a credit to get your Benzie County home sold this winter? You are not alone. In seasonal markets like Frankfort, Beulah, and the inland-lake communities, concessions can be the difference between more days on market and a smooth closing. In this guide, you will learn what seller concessions are, why they matter in our winter and shoulder seasons, and how to use them strategically without giving away the farm. Let’s dive in.
What seller concessions are
Seller concessions are items of value you agree to pay for the buyer at or before closing. They show up on the purchase agreement and on the Closing Disclosure. Concessions can reduce the buyer’s upfront cash or lower their monthly payment if used for a rate buydown. Lenders must approve them, and loan program rules determine what is allowed.
There are two basic types:
- Direct concessions: A credit at closing for closing costs, prepaids, or a repair allowance.
- Indirect concessions: You pay third parties directly for items like an interest-rate buydown, a home warranty, or repairs completed before closing.
Why they matter in winter
Benzie County’s demand peaks from late spring through early fall. Once the leaves drop, buyer traffic softens, and days on market tend to stretch. Concessions become a smart tool to keep your listing competitive while preserving your sale price. They can help a qualified buyer who is tight on cash or payment, especially in colder months when financing and inspection concerns feel sharper.
Common concession types in Benzie County
Closing cost credit
This is the most common approach. You offer a fixed dollar amount or a percentage of the sale price toward the buyer’s closing costs. For example, on a $400,000 sale, a 1 percent credit is $4,000.
Repair or inspection credit
If the inspection identifies issues, you can credit the buyer at closing rather than completing the work yourself. A typical example is a $2,500 allowance for roof flashing or a septic pump replacement.
Interest-rate buydown
You pay lender points to temporarily or permanently reduce the buyer’s interest rate. Temporary buydowns like 1-0 or 2-1 lower the payment in the first one to two years. A permanent buydown uses discount points to reduce the rate for the life of the loan. Your buyer’s lender must approve and document how points are paid.
Home warranty or service contract
A one-year warranty can reassure buyers considering older systems like furnaces, water heaters, or septic components. You pay for the policy at or before closing.
Prepaids and escrow shortages
Credits can cover upfront insurance, property taxes, or initial escrow funding. This reduces the buyer’s cash-to-close without changing the sale price.
Personal property included
Instead of cutting price, you might include appliances, certain furnishings, or lake items like docks or a boat lift. This increases perceived value for the buyer.
Post-closing occupancy
If you need time to move, you and the buyer can agree on a short rent-back. Terms are written into the contract, and sometimes a credit offsets the occupancy cost.
How concessions make a deal pencil
Example 1: Closing cost help
- Price: $350,000
- Buyer needs $10,500 for 3 percent down plus about $8,500 in closing costs
- You offer a 2.5 percent credit: 0.025 × $350,000 = $8,750
- Buyer brings about $10,250 to closing instead of roughly $19,000
Result: Your credit bridges the gap so a qualified buyer can close, and you preserve the agreed price.
Example 2: Payment relief with a buydown
- Price: $425,000, loan amount about $340,000
- Market rate: 6.5 percent, buyer wants a payment closer to 5.75 percent
- You fund a temporary or permanent buydown that drops the initial rate by about 0.5 percent
Result: The monthly payment falls into the buyer’s comfort zone, which can keep your deal together without a price cut.
Example 3: Repair credit vs price drop
- Inspection recommends $6,000 of septic work
- You offer a $5,500 repair credit instead of reducing price by $6,000
Result: The buyer has funds to handle the work after closing. You keep a higher gross sale price, which can help with optics in valuation.
What lenders allow
Concessions must fit the buyer’s loan program. Always confirm with the buyer’s lender in writing before you rely on a credit in your contract.
- FHA: Seller-paid items like closing costs, prepaids, and points are commonly allowed within program limits.
- VA: VA loans permit certain seller-paid costs and concessions under specific rules.
- USDA: USDA often allows seller-paid closing costs as defined by program guidance.
- Conventional: Fannie Mae and Freddie Mac set limits based on occupancy and down payment.
Appraisers do not raise value because of concessions. If the appraisal is low, a credit might help cover some costs, but it does not change the appraised value. Lenders will also review whether the concession is reasonable and tied to allowable items.
Winter patterns to expect here
In Benzie County’s colder months, you are more likely to see:
- Closing cost credits for cash-strapped buyers after their down payment
- Temporary or permanent rate buydowns to reduce monthly payments
- Repair credits so buyers can handle work post-close
- Seller-paid home warranties for older systems
- Inclusion of appliances, select furniture, docks, or lifts
- Short rent-backs for seller move-out timing
- Pre-paid snow removal or credits toward next-season landscaping
- Help with rate lock extension fees when closings slip into winter
Move-up buyers who are carrying two mortgages or using bridge options often benefit from credits that preserve their cash.
Credit or price reduction?
Choosing between a credit and a price cut depends on your goals.
- Use a credit when the buyer’s cash-to-close is tight, or the payment is just out of reach. You preserve the contract price and may help the buyer qualify.
- Use a price reduction if you need to widen your buyer pool, reposition the listing, or respond to new comparable sales.
Remember that a credit reduces your net proceeds just like a price reduction, but it can keep optics stronger on price and comps.
Smart strategies for sellers
- Pre-listing checks: If you have a waterfront or rural property, consider proactive checks for septic, well, shoreline setbacks, and potential floodplain concerns. A known allowance can be cleaner than last-minute repairs.
- Stage your offer: Market your listing with a clear note that you are open to credits for closing costs, rate buydowns, or a home warranty. This signals flexibility without pre-committing to a number.
- Target what helps underwriting: Credits that lower cash-to-close or reduce the monthly payment often matter most to financed buyers.
- Document everything: Ensure the purchase agreement and closing statement show the concession. For buydowns, the lender needs precise documentation of paid points.
- Mind timing: A fair concession in winter can shorten days on market and keep momentum in colder months.
Tips for move-up buyers
If you are buying in Benzie County while selling another home, focus on concessions that protect your cash and monthly costs.
- Ask for a closing cost credit so you are not stretched thin while carrying two properties.
- Explore a temporary rate buydown to ease the first year or two of payments.
- Consider a home warranty if you are stepping into an older systems profile.
Local prep that pays off
- Seasonal realities: Be upfront about winter access, snow removal, and heating costs. Offering a pre-paid service or a small seasonal credit can build trust.
- Aging systems: Furnaces, water heaters, roofs, and septic systems are common inspection topics. Decide in advance whether you would rather offer a credit or complete repairs pre-close.
- Rural and waterfront nuances: Lenders may require additional review for wells, septic, or shoreline compliance. Credits for inspections or minor remediation can keep underwriting smooth.
When you use concessions strategically, you help qualified buyers say yes without sacrificing your main price story.
Ready to talk through a concession strategy for your Benzie County sale or purchase? Connect with Christina Roberts for local guidance that blends market knowledge with clear, practical negotiation.
FAQs
What counts as a seller concession on a mortgage?
- Any value you agree to pay for the buyer at or before closing, such as closing costs, prepaids, repair credits, interest-rate buydowns, or a one-year home warranty.
How much can a seller pay toward a buyer’s costs?
- It depends on the buyer’s loan program and down payment. Lenders set limits for FHA, VA, USDA, and conventional loans, so confirm allowable amounts with the buyer’s lender.
Are concessions better than a price drop for Benzie County homes?
- Often, a credit preserves your sale price while solving a buyer’s cash or payment issue. A price drop can help attract new buyers if you need broader visibility or repositioning.
Can seller concessions fix a low appraisal?
- No. Concessions do not change the appraised value. They can help with cash-to-close, but a value shortfall may still require price or structure changes.
What concessions are common in winter around Frankfort and Beulah?
- Closing cost credits, temporary or permanent rate buydowns, repair credits, seller-paid home warranties, pre-paid snow removal, and inclusion of appliances or lake items like docks.
Do I need to disclose repairs if I offer a credit instead?
- Yes, you still disclose known property conditions. A repair credit is a negotiation tool, not a substitute for required disclosures.
