Buyers often ask, in the market we are currently in here in San Diego (and in other parts of the country) if they should ask for seller concessions.

And people wonder are seller concessions are common? And are there pros and cons about asking for them.

As you are engaged in the process of looking for a home, you may want to consider asking for seller concessions as part of your negotiations. But be aware of some important things to consider.

First, what ARE seller concessions?

Seller concessions are generally things that the seller will offer, either up front or when requested, as an incentive for buyers to purchase the home. You find them in buyer markets when there is lots of competition. Obviously there is no need for these when the market favors sellers. It could be a credit for carpet or paint, or money back at closing for non-recurring costs (i.e., money for repairs and other things). Sellers may agree to contribute some funds towards the buyer's closing costs as well. Buyers often ask for concessions in the case of short sales and foreclosures, too. Builders of new homes may offer concessions as well, or other incentives - a car (for high end homes), a trip, a plasma TV,lender incentives, and more.

1. Find out if seller concessions are common in your marketplace. If they are, it makes more sense, but if not, it may be a tough hoop to jump through. Your agent can advise you.

2. Consider what would be important for you in order to purchase the home. Credit for repairs, rather than the seller fixing them, is fairly common.

3. Think about the competition and whether or not asking for concessions will make your offer unacceptable, or less competitive, than offers from other buyers. All things being equal, sellers will likely look less favorably on these if another offer is cleaner.

4. Know that just because it is a buyers market does not automatically translate into a situation where sellers will be willing to give up everything in order to sell. It will depend on the local demand, prices, the seller's motivation and other factors.

Asking for concessions MAY be something worth considering in your offer and negotiations. But it may not be your best course of action, depending on the circumstances.

Further, intentionally bumping up the asking price and then requesting a large sum of money back at closing can be fraud. It is a common scam in this market, where some folks want to offer, say $30K more than the home is worth, then to get this money back as closing to do other things. There are cases where lenders, buyers and even sellers and agents have participated in such illegal activities.