Seller concessions
Seller concessions are 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.
Your Room opens on this part of the sale, with the offer and everything before it already ticked.
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See how it worksWhere this comes up in a sale, and what follows
- Title work (comes before)
Part 1 of 5
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 5
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 5
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 5
Common questions
What are seller concessions?
Money the seller agrees to put toward the buyer's costs, usually closing costs or a repair. It is written into the contract and paid from the seller's proceeds at closing.
Is a seller concession the same as a price cut?
To the seller they net the same. A $5,000 concession at $300,000 leaves what $295,000 with no concession would. They differ in what the buyer's lender will finance.
Is there a limit on seller concessions?
Yes, and the buyer's loan type sets it. Lenders cap concessions as a share of the price, and the cap differs for conventional, FHA, VA and USDA loans.
Part 5 of 5 · 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
In your Room, this word explains itself where it appears.
Your Room defines seller concessions in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
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