When buying a house, people think the heaviest lift is the down payment. It’s not. It’s the 2 percent to 5 percent of additional money buyers need to close the transaction. Closing costs come as a surprise to many.
Seller concessions are one way to keep that cash requirement from killing an otherwise workable transaction. But how do they work, how much can they cover, and how common are they?
Before anything else, a buyer wanting to ask a seller for concessions needs to put it into their initial offer, because once the contract is signed, the seller’s obligation disappears and the buyer’s leverage does, too.
And the request is not a long shot. According to Redfin data, asking for seller concessions happened in roughly 44 percent of home sales nationwide in early 2025, meaning nearly one in two sellers was already offering money toward the buyer’s costs.
What seller concessions are
A seller concession is a credit the seller agrees to provide toward the buyer’s allowable closing costs, prepaid expenses, discount points or other approved financing costs.
The National Association of Realtors defines them simply as payments made by a seller to offset certain costs or fees generally associated with buying a home, and they can be negotiated as a percentage of the purchase price or a fixed dollar amount.
What seller concessions do
The buyer brings less cash to the closing table. That is the whole point. Concessions cover costs the buyer would otherwise have to pay out of pocket, which means buyers don’t need to scramble to cover them.
The seller keeps the contract price intact. A $5,000 concession solves a buyer’s cash problem without signaling desperation to the market the way a $5,000 price reduction does, and that difference can protect the comparable sale for everyone else in the neighborhood.
What the money can cover
Seller concessions can generally be used for expenses such as loan origination charges, discount points, title insurance, escrow fees, recording charges, prepaid taxes, insurance and approved rate buydowns.
Those costs fall into two categories.
Recurring costs are ongoing expenses collected at closing, such as mortgage interest, property taxes and homeowners insurance.
Non-recurring costs are paid once, such as lender fees, appraisal charges, title insurance, escrow fees, recording fees and notary fees. Both categories count toward the same single limit under Fannie Mae’s Interested Party Contribution rules.
Question: What is a seller concession in the simplest terms?
Answer: A seller concession is money the seller agrees to pay toward the buyer’s closing costs as part of the deal.
It is not a discount on the price. It is the seller covering expenses that would normally come out of the buyer’s pocket — loan origination fees, title insurance, prepaid property taxes, points, even some repairs.
This is how it works: You agree to pay $400,000 for a house. The seller also agrees to a 3 percent concession, which is $12,000. At closing, that $12,000 goes toward your closing costs instead of you writing a check for the whole amount. The seller gets their price, and you get into the house with less cash and less stress.
Think of it as the seller sweetening the pot to get the deal done. Sellers offer concessions to close faster, to attract buyers with limited cash or to move a property that has been sitting. Buyers ask for them when they have the down payment but not a lot of cushion left over for closing costs.
Question: The seller agreed to a credit bigger than my closing costs. Do I get the difference in cash, or does it just disappear?
Answer: The seller cannot credit more than your actual closing costs — at least not in a way that puts money in your pocket. Lender rules are strict: Any seller contribution beyond your allowable closing costs is not returned to you as cash. It is simply forfeited.
Why? A seller credit is a concession the lender caps and approves. If you pocketed the difference, it would look like cash back outside the loan — a fraud red flag. So the credit can only cover real costs.
But do not let it vanish. Before closing, ask your agent and lender to restructure: lower the purchase price by the excess amount, or use it to buy down your rate, which counts as an allowable cost.
Question: Does asking for concessions hurt my offer in a market where other buyers are going in clean?
Answer: It depends on the market — buyer’s markets eat and drink seller concessions, seller’s markets put them in the penalty box.
The data is clear. In the first quarter of 2025, sellers gave concessions in 44.4 percent of U.S. home sales — just shy of the all-time record. In Seattle, it was 71.3 percent. In Portland, 63.9 percent. In Denver, 59.2 percent. Sellers are offering closing cost credits, rate buydowns and repair allowances because inventory is up and buyers have choices. In that kind of market, asking for a concession does not hurt your offer. It is expected.
The problem is when you bring buyer’s-market behavior to a seller’s-market. If a house has three offers in three days, a concession request moves you to the bottom of the stack — a “clean” offer with no strings attached wins every time.
The rule is simple. Concessions are not inherently bad. They are just out of place in a market where the seller does not need you. Read the market before you write the offer.
Each week in America Answers, Inman contributor America Foy answers questions from the industry at large and offers advice on how to handle the situation.
Have questions? Email America Foy
America Foy is a broker associate at The Grubb Co. Get connected on LinkedIn and Instagram.
