Sellers Assist Guide

By PropertyClub Team
May 6th 2022
If you’re currently in the market for a home or considering putting your home up for sale you’ve probably heard the term seller assist. But, like many real estate terms, most people don’t have a good thorough understanding of the meaning. Maybe you know that it has something to do with mortgages, but you aren’t exactly sure what is involved with a seller assist or how it could benefit you. 

hash-markWhat Is a Seller Assist? 

A seller assist involves a seller providing credit to the buyer to help them cover the closing costs associated with buying a home. The credit can be used for other things, such as lowering the interest rate, paying the first monthly mortgage payment, or be put towards property taxes, but typically speaking, it’s used for closing costs on a sale.

It’s very common for homebuyers to successfully and accurately budget for the things like down payment but forget completely about the high expenses of closing costs. In these situations, a buyer might approach the seller and ask for a seller assist, particularly if they know that they have enough for the down payment and monthly payments, but they just don’t have enough money to make the closing costs work. This is a particularly common situation for first-time homebuyers who aren’t expecting closing costs to be as pricey or don’t have the funds to cover them out of pocket. 

Seller assists can be worked into an offer made on a home. Buyers will usually put in an offer for a sale price with an included percentage for a seller assist. For example, if a home is for sale for $500,000, a buyer might put in an offer for $490,000 plus a 3% seller assist. The seller assist would then be used to cover the closing costs of the home, and the seller would still make a significant profit.

It should be noted that not all loans allow for a seller assist. Even if buyers do qualify, there’s a limit to how much they can apply for in many situations. For example, with an FHA loan the maximum seller assistance allowed is 6%.

hash-markHow Does a Seller Assist Benefit the Seller? 

So, a seller assist is clearly helpful for buyers, but what’s in it for the seller? Well, first and foremost, offering a seller assist can be a huge help when it comes to drawing in potential home buyers. Furthermore, a seller assist can help to secure a pending sale and make sure it goes through. If a buyer and seller have spent months invested in the selling process, it’s more beneficial for a seller to offer a seller assist if a buyer can’t cover closing costs. If the buyer were to back out due to insufficient funds, the seller would have to start the process all over again with a new buyer.

It’s also common for sellers to accept a request for a seller assist only on offers that come in above the listing price. This helps the seller ensure that covering the closing costs doesn’t cut too far into the profit they can make on the home.

hash-markIs Sellers Assist a Good Idea?

All in all, a seller assist can be hugely beneficial for both buyers and sellers alike. Buyers who don’t have the cash to pay closing costs upfront and out of pocket will still be able to afford homes that they are interested in if a seller assist is an option. And for sellers, it can be a good way to attract potential buyers or secure a sale that the buyer otherwise may have to back out of due to lack of funds for closing costs. In these circumstances, a seller assist benefits both parties and can be a win-win situation overall.