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Seller concessions, seller contributions, seller credits and closing cost credits—what do these things have in common? Well, how about the fact that they’re all the exact same thing? Seller concessions are essentially monetary contributions the buyer asks the seller to put towards a variety of things, such as closing costs, escrows, etc. The money is deducted from the seller’s net proceeds at closing.

However, if a buyer plans to buy a home using a loan, they’ll want to check and see if their lender allows for seller concessions. Additionally, the buyer is basically financing whatever amount they ask for as a contribution from the seller, since closing costs will still be based on the original sales price. For instance, if you bought a $250,000 home but asked for an $8,000 concession, the rates would still reflect the $250,000 price tag rather than the $242,000 that the seller is actually netting.

Seller concessions are generally most useful because they can help the buyer pay the upfront fees associated with buying a house that might otherwise serve as a barrier to homeownership, and agreeing to concessions can help sellers sweeten the deal in order to make the sale.

That being said, it doesn’t pay to be greedy—asking for more money than is necessary to cover the costs associated with the concession will simply go right back into the seller’s pocket, so the buyer should consult with their lender in order to have a general idea of how much is needed to cover the agreed-upon expenses.


At Title Junction we care about helping you stay informed throughout your real estate transaction. Have questions? Give us a call at 239.415.6574.

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