Negotiating Credits

Especially in a buyer's (weak) market, sellers often find that they have to give buyers money in the form of seller-paid financial concessions in order to close the deal. The two most common concessions are for nonrecurring closing costs and corrective work.

Nonrecurring closing costs

Some sellers come right out and tell you that they'll pay your nonrecurring closing costs if doing so will help put a deal together. Nonrecurring closing costs are one-time charges for such things as your appraisal, loan points, credit report, title insurance, and property inspections. Closing costs can amount to 3 to 5 percent of the purchase price.

• Even if the sellers don't offer to pay your nonrecurring closing costs, asking for this concession as one of the terms in your offer usually won't hurt. Two general exceptions to this rule are when it's a seller's (strong) market or when you're in a multiple-offer situation.

Corrective work

Typically, neither you nor the sellers know how much, if any, corrective work is needed when you submit your offer. Therefore, purchase contracts have provisions for additional negotiations regarding corrective work credits after all the necessary inspections have been completed.

If the property inspectors find that little or no corrective work is required, you have little or nothing to negotiate. Suppose, however, that your inspectors discover the $200,000 house you want to buy needs $20,000 of corrective work for termite and dry-rot damage, foundation repairs, and a new roof. Big corrective-work bills can be deal killers.