In what scenario is a closing credit typically issued?

A closing credit is typically issued when a seller offers concessions. This is a common practice in real estate transactions to make the deal more appealing to buyers. Concessions can include financial credits towards closing costs or other expenses, effectively reducing the buyer's out-of-pocket expenses at closing.

This practice allows sellers to provide incentives that may help in selling the property faster or at a price that reflects the current market conditions. By offering closing credits, the seller is acknowledging potential costs the buyer may incur and is willing to assist in making those costs more manageable.

In this context, while situations such as closing costs exceeding estimates or repairs required after inspections could impact the financial negotiations, they are not directly tied to the issuance of a closing credit in the same way concessions are. Similarly, although property taxes being paid in advance affects the financial obligations between the parties, it does not involve the seller directly offering a concession as part of the closing process.