How to Sell Your Oahu Condo Without "Giving It Away"

What Exactly is a "Seller Concession"?

Think of a concession as a "closing gift" that makes your property significantly more attractive without requiring you to drop your asking price into the basement. Essentially, you, the seller, agree to pay for certain costs that the buyer would normally cover out of pocket.

In today's market, buyers are often tight on liquid cash. Instead of reducing your price by $20,000, offering that same amount as a credit toward their closing costs can be the "make or break" factor that gets your condo sold.

Real-World Examples for Your Oahu Condo

Not sure what to offer? Here are the most effective ways we can structure concessions to get buyers excited:

• Buying Down Their Interest Rate: This is the "gold standard" right now. You can offer a "2-1 buydown," where you prepay a portion of the interest to lower the buyer's mortgage rate for the first two years. It makes their monthly payment much more affordable.
• Covering Closing Costs:  Many buyers have enough for a down payment but struggle with closing costs. A concession directly reduces the cash they need at the closing table, which can be a bigger "win" for them than a slightly lower total loan amount.
• Improvements: If your unit needs a little TLC—perhaps the carpet is dated or the appliances are original—you can offer to pay for "home updates." This allows the buyer to pick out exactly what they want before closing.
• Professional Fees: Concessions can also cover the costs of appraisers or other professionals required to get the deal to the finish line.

Pro-Tip for Oahu Sellers: Since many of our local condos have high maintenance fees, offering to prepay six months of HOA fees is a massive selling point that catches a buyer's eye immediately!



Why Concessions Often Beat a Price Drop

For many sellers, a concession is a more surgical tool than a flat price reduction. Here’s why it works:

1. Higher Monthly Impact: A $10,000 price drop might only lower a buyer's monthly mortgage payment by $30 to $100. However, using that same $10,000 to buy down their interest rate can slash their payment by $300 or more.
2. Protects Your Property’s Value: Dropping your price can sometimes signal "damaged goods" or desperation. Keeping your list price higher while offering a credit helps maintain the comparable sales (comps) in your building. This protects your appraisal and ensures your neighbors won't hate you for selling below market value!
3. The Psychological Edge: Buyers often view a price reduction as a sign of a "stale" listing, whereas they view a seller credit as a generous incentive—a "gift" that helps them close the deal.

Note: Lenders cap seller concessions by loan type — Conventional (3–9%), FHA (6%), VA (4% + allowable closing costs), and USDA (6%) — so always verify the buyer’s specific program before structuring credits.

The Tax Benefits for You

One of the best-kept secrets about seller concessions is how they help you when tax season rolls around.

Reducing Taxable Gain

When you offer a credit for repairs or closing costs, it is usually categorized as a selling expense.

• How it works: It is subtracted directly from your final sales price.
• The Benefit: If you sell for $600,000 but give a $10,000 credit, the IRS effectively sees your sale price as $590,000. This lowers your "amount realized," which reduces your taxable gain

Capital Improvements (Customized for the Buyer)

This is a high-level strategy where you agree to pay for specific upgrades before the sale is finalized, but you let the buyer choose the finishes. This gives the buyer a "turn-key" home in their own style, while you maximize your tax position.

• How it works: You and the buyer agree on a budget for specific improvements (like new luxury vinyl plank flooring or quartz countertops). You, the seller, pay the contractors directly from your proceeds or cash on hand, and the work is completed prior to the actual closing date.
• The Benefit to the Buyer: They get a renovated home without needing the extra cash after closing, and they got to pick the design!
• The Benefit to You (Adjusting Your Basis): Because these are "capital improvements" you paid for, they are added to your Cost Basis (what you originally paid for the home).
• Example: If you bought the condo for $400,000 and spent $50,000 on a kitchen renovation tailored to the buyer's choice, your "adjusted basis" is now $450,000.
• The Result: When you sell, you only pay taxes on the profit earned above that $450,000 mark.

Important Note: To qualify for this tax treatment, the work must be completed before the deed is transferred. If you simply give the buyer cash to do it themselves later, it’s treated as a price reduction or credit rather than an adjustment to your cost basis.

From Frustration to Freedom

You don’t have to do this alone, and you don’t have to settle for the "standard" approach.

I specialize in taking the weight off your shoulders. My goal isn't just to list your home; it’s to build a strategy that protects your investment and your peace of mind. By finding creative ways to bridge the gap for buyers, we don't just find a "lead"—we find a closed deal.

Let’s sit down and look at the numbers. I’ll show you exactly how we can structure a deal that gets buyers excited and keeps your hard-earned equity where it belongs—in your pocket. Let's Build Your Strategy