Seller Concessions: How Much Can the Seller Pay?

A seller concession is when the seller agrees to pay part of your closing costs as a term of the sale. It's a legitimate, common way to reduce your cash to close, and depending on the loan type and your down payment, a seller can contribute anywhere from 2% to 9% of the purchase price toward your costs.

What a seller concession actually covers

Seller concessions go toward your closing costs and prepaid items, things like loan fees, title costs, the appraisal, and prepaid taxes and insurance. They generally cannot go toward your down payment (that's a key distinction from gift funds). The concession lowers the cash you bring to closing, not the price of the home itself, though functionally it can be negotiated in place of a price reduction.

How much the seller can pay, by loan type

The limits vary by program and down payment: On conventional loans, the cap depends on your down payment, roughly 3% with less than 10% down, 6% with 10-25% down, and 9% with more than 25% down. FHA loans allow up to 6%. VA loans allow up to 4% for certain concession types. USDA loans allow up to 6%. These are ceilings, what you actually negotiate depends on the deal.

When sellers agree to concessions

Concessions are most achievable in a buyer-favorable market, or when a home has been sitting unsold. A seller who wants to move the property may prefer to cover your closing costs rather than drop the asking price, because it helps you afford the purchase while keeping the headline price intact. In a hot market with multiple offers, concessions are harder to get, since the seller has leverage.

Concession vs. price reduction

Here's a strategic point worth understanding: a seller credit toward closing costs and a price reduction aren't identical. A $10,000 price cut lowers your loan amount slightly and your monthly payment marginally. A $10,000 concession toward closing costs reduces the cash you need on day one, which matters more if your constraint is upfront money rather than monthly payment. Which is better depends on whether you're short on cash to close or focused on the long-term payment, part of the broader home buying math worth thinking through with your agent and lender.

How to ask for them

Seller concessions are negotiated as part of your offer, your agent structures it into the purchase agreement. It's a normal ask, especially in the right market conditions. Just know the cap for your loan type so you don't request more than the program allows, since a concession above the limit gets reduced to the maximum anyway.

Because concessions are really about covering closing costs, it helps to know those numbers before you negotiate. When you're ready to structure an offer, ask Emmett how much to request for your loan type, and see our home buying guide for how this fits the wider process.