Q: We are selling our home in Maryland and it is listed for $499,900. We’re willing to offer $10,000 to the buyer, and we’re wondering whether we should offer to pay $10,000 towards closing costs or if we should reduce our price by $10,000. Which benefits us most (as sellers)?

A: The short answer to your question is whichever methods gets the home sold. Both methods have their benefits and problems.

In some states that require you to pay transfer taxes on the sale of your property, the higher sales price will cause you to incur additional closing expenses. Also, the higher sales price will cause you to pay a higher commission to your listing broker for the sale.

For example, if you’re required to pay 2 percent in taxes on the sale of the home and a 6 percent commission on the sale of the home, that higher purchase price will cause you to incur $800 in additional closing costs.

Some real estate agents, however, will agree to base their commission amount on the net you receive and not charge you a commission on the $10,000 credit. If you can get your real estate agent to agree to do it that way, your costs are about the same.

If you decide to give the buyer a $10,000 closing cost credit, make sure that the credit is clearly spelled out in the purchase and sale agreement. You need to make sure the buyer’s lender is fully aware of the credit and approves of the credit well in advance of the closing or settlement of the transaction.

If you don’t get the credit approved in advance, you’ll have issues trying to pay the money to the buyer and you should not transfer any money between you and the buyer except on the closing statement prepared by the title company or escrow closing agent.

Finally, from a federal income tax perspective, financially you should be about the same whether you get the higher price for the home or give the buyer a closing cost credit. So you shouldn’t have to pay any more to the federal government in either case.

Due to the recent economic and real estate problems, some people are eager to get a little extra cash to do work on their homes. If the lender will agree to the closing cost credit, the buyer will be able to get a slightly higher loan amount and have some cash left over to make repairs to the home or buy some new furnishings.

From the buyer’s point of view, however, the buyer may want the lower price. In some parts of the country, real estate taxes are based on the sales price of the home. If the buyer accepts the closing cost credit, he or she will start out paying a bit more in real estate taxes from that point forward. For some buyers, paying more in taxes from the purchase on may be less of their liking than just getting the home for less.