Seller Concessions


Here’s how seller concessions work:

Seller concessions are money paid toward the closing on your behalf. This money is generally applied to the buyer’s closing costs. It can allow you to roll the closing expenses back into your home loan.

As an example, let’s say your sellers want to net $300,000 on the sale of their home. You might have the necessary down payment, but you need some assistance with closing costs.

Using this scenario, the seller may consider an offer of $305,000, contributing $5,000 towards the buyer’s closing costs.

This can be a win-win scenario for both buyer and seller. Due to increasing the purchase price by $5,000, the seller can still net their target amount of $300,000.

It helps the buyer, as they end up needing $5,000 less out-of-pocket at closing. Again, the buyer is essentially financing the $5,000 into the amount borrowed for their loan.

Seller concessions vary by loan program:

Seller-paid closing costs vary by the type of loan program for which you’re applying.

It is important to know how much a seller, or any interested party, can contribute to a buyer’s closing costs.


Other programs, such as portfolio loans, jumbo loans, and non-prime loans may have their own rules about seller contributions. If that’s a factor for you, ask lenders about their policies when you call them for mortgage quotes.