What is it? When do we see it? Should I expect it?
Seller contribution is often termed "closing credit", "closing help", "seller help", and a dozen other names by agents and consumers. In our contracts in Maryland, it's usually dubbed "Seller Contribution" because its a portion of the sellers proceeds that gets contributed towards the buyer's side of the transaction.
For example, if a buyer and seller have agreed to a contract with terms of $500,000 sale price and $10,000 seller contribution, the net price for the seller is $490,000. But Shane, why not just do a contract for $490,000? Shhhh I'm getting to that! Simmer down!
A buyer asks for a seller contribution for a multitude of reasons. It can mean the buyer can afford the mortgage but doesn't have all the cash they need to bring to closing. It can mean there are repairs to be made and in lieu of the seller doing them, the buyer will get compensated at closing and do the repairs on their own. It can mean seller has delayed closing and buyer is stuck in temporary housing for a few extra days and this is compensation for that. There's more ways to use it but these first two are by far the most common.
We see this a lot more in the entry level markets and the middle class markets. First time buyers are often "cash poor" but make good money. Especially these days. Again, that means that we have a buyer that can afford the monthly payments, but they don't have or aren't comfortable having all the cash that's needed to actually close on the property.
In our move-up buyers (buyers selling their first or second homes and moving up in the market to a bigger or more expensive home), we set it a little less and it's usually related to inspection items. Bigger houses mean more maintenance and thus more issues that can come up at an inspection. A lot of the houses they are buying will be bought from owners who are downsizing and therefore not interested in fixing much, so they offer money in lieu of repairing items.
If you're selling a house that is in either of those two categories - expect some seller contribution attached to the offer.