What are "seller concessions" and is the seller really paying my closing costs?

Seller concessions are one of the most confusing concepts out there......

The bank wants it to look and feel as if the seller is paying all of your closing costs, but here is the deal. They really are not and here is why:

-The seller is simply going to adjust his/her counteroffer to you to compensate for any closing costs thus really just inflating the purchase price. They are not bringing a check to closing to pay for them, in essence you are "rolling the closing costs in to your mortgage."

-If you offer the seller $100,000 that includes $6000 in closing costs, the seller is acutally being offerd $94,000 and you are rolling the rest in to your mortgage. If the seller needs or wants to get $100,000 they are going to counter back at $106,000 to cover your $6000 in closing costs.

It does no harm and the house must appraise but it is important to understand and know that is always best to pay your closing costs if you can!

I'm always open for questions and comments!