Contracts
A Virginia buyer includes in their offer a request for the seller to provide a $10,000 closing cost credit. This would appear in the contract as a:
ACommission adjustment
BSeller concession✓ Correct
CEarnest money reduction
DLender discount point
Explanation
A seller's closing cost credit to the buyer is called a seller concession. Lenders may cap the amount of seller concessions based on loan type and LTV ratio.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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