An agreement during a real estate transaction where the seller provides funds to the buyer, typically to cover closing costs or reduce the purchase price, is a common financial tool. For instance, a buyer struggling to afford all upfront expenses might negotiate with the seller for a specified sum to be deducted from the final selling price. This negotiated amount effectively reduces the cash the buyer needs to bring to closing.
This financial arrangement can facilitate smoother transactions, particularly in markets where buyers have limited capital. It may allow buyers to qualify for a mortgage they might otherwise be denied or to allocate funds to essential improvements after the purchase. Historically, it has provided a viable alternative during periods of tight credit markets, enabling sales that might not have occurred otherwise.
