Seller concessions
Money the seller agrees to put toward the buyer's side of the deal, usually as a credit against the buyer's closing costs or a repair. It is written into the offer, comes off the seller's proceeds at closing, and lenders cap how much a buyer may accept depending on the loan type.
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Why a seller cares
A concession is money you agree to put toward the buyer's costs, and it comes out of your proceeds at closing just as a price cut would. Buyers ask for them instead of a lower price so their loan covers more.
Part 2 of 4
A simple example
The buyer asks for $5,000 toward their closing costs at a $300,000 price. To you it nets the same as $295,000 with no concession.
| The offer | What you net before fees |
|---|---|
| $300,000, no concessions | $300,000 |
| $300,000 with $5,000 in concessions | $295,000 |
| $295,000, no concessions | $295,000, and the buyer's loan is smaller |
A concession and a price cut cost you the same. They differ in what the buyer's lender will finance.
Part 3 of 4
What people get wrong
That a concession is a gift on top of the price. It is part of the price, paid out at closing from your side of the table.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
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