FACTS:                 

An escrow officer is advising agents to write on Page 8 of the new February 2017 Contract, “Seller concessions shall include prepaids.”

ISSUE:                  

When requesting seller concessions in the Contract, can the Buyer  ask for the Seller to pay for “prepaids”?

ANSWER:                

See discussion.

DISCUSSION:    

The February 2017 Contract does not include “prepaids” in the Seller Concession clause of the Contract.  This allows each party to negotiate those terms.  If the Buyer wants the Seller to pay certain fees at closing, then the Buyer should specifically list those fees in Section 8a, so that there is a meeting of the minds and all parties understand the terms of the Contract.

Note: In some instances the lender may require that certain expenses be prepaid as a condition of the loan, such as insurance. To the extent that this “prepaid” is a requirement of the loan, it constitutes a “loan cost” and is a proper seller concession under Section 2j.