Seller-paid concessions (when properly used) can mean the difference between closing a home sale and losing one. A concession is defined as "anything of value added to the transaction by the seller, builder, developer, salesperson or any interested party."

Concessions may also include some closing costs that typically would be paid by a buyer (such as loan fees, appraisal and credit report fees and title/escrow fees). Concessions can also be given in the form of buying temporary interest rate reductions for the buyer.

In today's market with sellers competing for buyers, concessions of just a few hundred dollars can make a huge difference in clinching the deal.

From the viewpoint of the seller, it might make no difference at all in whether or not to offer a concession or just lower the sales price, since to them the bottom line is the same.

To a buyer however, this can make the sale. The concession can be applied to closing costs, thus helping a cash strapped buyer. Or, it might be in terms of the seller leaving an allowance at closing for a new paint job or new fencing that is needed. The borrower now has the money to make immediate improvements to their newly acquired property, thus increasing their property value.

There are specific rules about concessions. There are percentage limits and there are restrictions on how the funds can be applied, so it's important to check with a knowledgeable mortgage broker.

Kim Payne, owner of Folsom Mortgage, Inc. (your hometown lender) has nearly 30 years experience in the mortgage business and remains passionate about educating the mortgage consumer. She can be reached at 916-989-9300 and on line at www.folsommortgage.com