What does a 5000 sellers concession mean?

The seller is offering to pay up to $5000.00 of your fees, usually closing costs. Be careful with this, as many lenders are aware that seller concessions are often used to increase the sales prices, and thus with a goal of increasing the dollar amount of the mortgage for which the buyer will qualify. They put strict limits in response to this practice on available loan programs which specify the highest seller concession that they will allow. So, if you sign a contract that says that the seller will give a $5000 seller concession and the bank will only allow a $2000 seller concession, you may end up not closing, or being drawn into doing a deal on the side for the remaining funds, which would constitute mortgage fraud. Also, just because a house price is $5000.00 higher due to seller concessions, doesn't mean it is going to appraise at the sales price. Loans are based on the lowest of either the sales price or the appraisal price and appraisals are becoming drastically more legitimate. One more thing to remember is that if you are using realtors in your transaction, you may want to also consider having your contract reflect that the realtors will be paid based on the sales price minus the amount of concession, instead of letting them make commission on an inflated sales price. If you do not make sure that you specify this in the beginning, you will be over-paying for the oversight. I believe a big reason that realtors encourage a "seller's concession" versus a lower sales price is so they can retain a higher commission. Further, any home that you cannot afford to get a mortgage on within the perameters of the loan program, is probably a home you should pass on because it is a strong signal to buy a home you can more easily afford. Just ask anyone who is currently in foreclosure if they wish they had done just that.