In real estate transactions, this term refers to a benefit, incentive, or item that a seller grants to a buyer as part of the negotiated agreement. This may take various forms, such as covering closing costs, providing allowances for repairs or upgrades, or reducing the sale price. As an illustration, a seller may offer to pay a portion of the buyer’s closing expenses to facilitate the completion of the sale.
Such arrangements can be significant in facilitating property transactions. They can bridge valuation gaps between buyer and seller, address concerns related to property condition, and create more favorable terms for prospective buyers. Historically, the prevalence of these arrangements fluctuates with market conditions, becoming more common in buyer’s markets where sellers are more inclined to offer incentives to attract purchasers.
