Whether you’re buying or selling your home, the question of credits always arises. But what do they mean and what role do they play in buying and selling?
What are credits?
Credits are funds and costs depicted in the form of credits. One example of credits can be the closing costs that are determined when you are buying or selling a house. The realtor may negotiate those credits when trying to sell the house in order to allow the buyer a little bit of breathing room by having the seller cover the closing costs. You may also find credits offered or requested after a home inspection discovers an issue.
When are credits asked for and issued?
Typically credits are issued by means of waiving closing costs, or finding issues after a home inspection and requesting a credit, or even as a means of negotiating the price of the house. Home buyers or sellers will either request the credit or negotiate the price of the house.
How to use and prepare for credits?
Homeowners trying to sell their house can take a proactive step by performing an inspection on their house before it goes on the market to find any last minute fixes that can be performed - thus also increasing the value of their home. As a means to negotiate the credits, if there either wasn’t enough time to fix the home before it went on the market or the funds weren’t available, the seller of the house may agree to have the issues fixed before the buyer moves in, instead of offering the credits.
Those that are looking for a home, beware of using credits as a means of lowering the cost of the house. There is never a guarantee that a home inspection will uncover hidden issues, and it isn’t guaranteed that the homeowner is incapable of fixing the issues within the designated time period. Always find a home within your budget and never count on a decrease in price!