What is a Seller's Assist?

A sellers assist is frequently included in offers to purchase a home.

A sellers assist is a credit that the seller pays towards the buyer’s closing costs. It is sometimes requested by a buyer when an offer is made on a property in order to reduce the amount of cash the buyer is required to pay at settlement for closing costs. Requesting a seller's assist will make a property more affordable for some buyers. If the down payment and closing costs on a $200,000 property are $25,000, a buyer might ask the seller to pay $5,000 towards closing costs, thus reducing the cash needed to purchase the property by $5,000.

A seller’s assist will reduce the proceeds paid to a seller, and, for the seller, it is equivalent to a reduction in the sale price. On the property with the $200,000 sale price, the net sale price would be $195,000.

A seller’s assist may also result from a buyer’s request for repairs due to issues raised during property inspections. In lieu of a seller making requested repairs before settlement, some buyers and sellers will agree that the seller will provide a credit to cover the cost of repairs. This credit will be labeled as a “seller’s assist “ on the final sale proceeds sheet.

Mortgage lenders set limits on the amount that sellers can pay in the form of a seller's assist; so, the amount should be approved by the lender early in the mortgage application process.

Credit Scores and Interest Rates

Most people realize that credit scores have a major impact on whether they can obtain loans and whether they can obtain favorable interest rates; but, credit scores can also impact insurance rates and even how you are perceived by a potential employer. A good credit score is key to obtaining a mortgage, favorable insurance rates and maybe even getting a job.

So, what is a credit score? A credit score is a number assigned to individuals and is meant to predict the likelihood of their repaying a loan.  The formula was developed by a company called Fair Isaacs, and the result of the formula is called the FICO score.

The intricacies of the formula remain a company secret, but its general components are well known. Here is the weighting given to each of the factors:

1)      35%  Bill Payment History- If you pay your bills on time you will rate high in this category.  Those who pay late, have had bills sent to collection agencies or have had bankruptcies will be rated lower.

2)      30%  Amount of Debt Outstanding-The ratio of debt to available credit should not be great.  Persons who max out their credit cards will rate lower in this category than someone who maintains a ratio of 10-30%.

3)      15%  Length of Credit History-Being a responsible credit card user over a long period of time increases your score as does maintaining credit with the same credit card issuers for a long time.

4)      10% Credit Mix-If you have had several types of credit, for example, a mortgage, car loans, student loans and credit cards, you will score higher than if you just had credit cards. This factor assumes a mix of credit demonstrates that you can handle various types of debt.

5)      10%  New Credit and Credit Inquiries- A number of inquires about your credit in a short period of time, suggests you may be in financial difficulty and trying to increase your credit limits.  It’s prudent to avoid opening up new accounts unless you need to, and to avoid doing so within a short period of time.

The national average credit score is around 690 and the median score is around 710. 

If you are thinking of refinancing a mortgage or buying a new home and are concerned about your credit score, a good mortgage broker may be able to help you.  Many are knowledgeable about credit scoring and may be able to help with a strategy that will have the greatest impact on improving your score. There is no quick fix, but paying down some debts will have a greater impact on your score than others.