As a general rule it considered normal in our market for seller’s to pay for buyer’s closing costs. The question that has been difficult to answer is “what’s typical”. With recent updates to the MLS system we are now able to extrapolate the answers.
Year to date- (It’s November 16th today), there have been 1096 residential sales in the Mat-Su Valley. Of those sales 52% or 580 reported seller concessions*. Of those that reported seller concessions the average amount was $4,431 or approximately 2% of the sales price. What we don’t know is how many concessions were not reported. If the information is reported correctly it shows that 48% of the sales do not have any seller concessions.
In addition to paying for closing costs the data shows that sellers took an additional 1% less than what the property was listed for.
“About 1/2 of the sales reported show sellers paid about 2% of the sales price towards buyer paid closing costs in addition to a sales price of 1% less than the list price. The true number showed approximately a 3% reduction in list to sales price”.
Of the sales that reported no buyer costs were paid, the percent of list price to sold price showed a 4.3% reduction in the list price. In conclusion the market for the year shows that the average “true reduction in list price” to sales price when concessions are accounted is closer to 3.5% less than list price.
With this new data we are better able to explain what is going on in our market. Knowing the numbers allows us to better advise our clients so they can make informed decisions.
*Seller concessions are buyers closing costs paid for by the seller