Finance
What is 'seller's concession' and how is it used in Hawaii real estate transactions?
AA. The seller's agreement to reduce the purchase price
BB. Funds the seller contributes toward the buyer's closing costs, often used to help buyers afford the transaction while the seller maintains a higher nominal price✓ Correct
CC. An additional payment the seller makes to the buyer's agent as incentive
DD. A cash gift from the seller to the buyer for moving expenses
Explanation
A seller's concession (seller contribution) is an amount the seller agrees to pay toward the buyer's closing costs or prepaids. Lenders limit seller contributions based on LTV (typically 3-6% for conventional loans).
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Math Concepts
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