Home buyers are flexing their negotiation muscle as a robust seller’s market weakens in many areas of the country. Buyers are increasingly asking for seller concessions or sellers are offering them as a buyer incentive. These concessions are financial contributions a seller makes to help offset a buyer’s closing costs, loan fees, repairs or other property-related expenses. Nearly half (46)% of home sellers gave concessions to buyers in May 2026, the highest share ever recorded for that month by Redfin, according to Redfin News.
If you’re a seller in an area where concessions are popular, you’ll want to choose them carefully, because they can be costly. In addition, make sure the concessions are written into the purchase agreement so they’re legally binding.
What Are Seller Concessions?
Seller concessions cover fees for areas such as property tax, title insurance, loan origination, attorney services, appraisal, home inspection or points, which are upfront fees to lower the interest rate over the life of the loan, according to Rocket Mortgage. Credits are also considered concessions, and sellers may offer them to fund repairs instead of fixing problems identified by the buyer or in a home inspection. Concessions are usually applied at closing.
Mortgage Assistance Concessions
With interest rates for a 30-year fixed mortgage hovering at mid-6%, mortgage rate buy-down assistance can be helpful, says Erik Schmitt, head of consumer direct sales for Chase Home Lending. “The seller provides a credit at closing that can be used to pay discount points or fund a rate buy-down. This can lower the buyer’s interest rate and monthly payments within program limits, he says. On the seller side, the credit can help sellers attract more buyers in a slow market, he adds.
Concessions have limits. State law, the buyer’s mortgage lender or the loan program can restrict the type and the total value of concessions. With FHA and USDA loans, seller concessions are capped at 6% of the home’s sales price; a VA loan allows the seller to cover closing costs plus up to an additional 4% in concessions. “At those levels, sellers can provide meaningful benefits and make that payment more affordable for a home buyer,” Schmitt says.
How Seller Concessions Differ from Price Cuts
Concessions reduce the amount of cash a buyer needs at closing, but a price reduction lowers the amount financed and reduces monthly payments over time. “Buyers [can] consult with a home lending professional to run the numbers on which scenario would work best for their financial picture,” Schmitt says. For the seller, concessions can preserve the sales price and make their property more attractive in a competitive market, he adds.
Avoid Overpaying on Seller Concessions
Sellers don’t need to agree to every concession. “The best way to avoid overpaying on concessions is not to negotiate harder at the end, but to create leverage before negotiations even begin,” says Ryan Melvin, broker/salesman at Huntington & Ellis in Las Vegas, a market that’s seeing a lot of seller concessions. Correct pricing, proper preparation and presentation, and strong buyer interest “will put sellers in the best position to say no when they can and negotiate when necessary.”
He lists three strategies to minimize concessions during negotiations:
- Price the home correctly so you’re negotiating from a position of strength.
- Take care of obvious maintenance issues before listing to avoid giving buyers negotiating leverage.
- Look at the entire transaction, not just the concession request. Sometimes a small concession protects a great offer and results in a better overall outcome for the seller. “If a $5,000 concession helps preserve a full-price offer and keeps the transaction together, it may actually put more money in the seller’s pocket than rejecting the request and starting over,” Melvin says.
Look Beyond Seller Concessions
“The agent’s knowledge of the local market is very important when determining concessions,” says Nadia Evangelou, principal economist and director of real estate research at the National Association of REALTORS®. A real estate agent will look at the number of days a property has been on the market and whether similar properties are selling more quickly or sitting longer. They’ll look at price reductions locally and maybe the history of the property. “All these things can tell an agent something about how much negotiating room may exist,” she says.
Keep in mind that concessions that are too high relative to the price can derail a sale. “If a buyer offers a higher price in exchange for concessions, the property still needs to support the contract price through the appraisal,” Evangelou says. That’s why the agent, the lender, the buyer and the seller need to look at the whole transaction rather than solely the size of the concession — and why it’s important to work with an expert agent.
Stacey Freed writes about the built environment, lifestyle issues, education and pets. Her work has been published in “The New York Times,” “Real Simple” and “USA Today,” as well as at AARP.com and Forbes.com. She sits on the board of the American Society of Journalists and Authors.
