What Is Seller Concessions?

Seller concessions are costs the seller agrees to cover on the buyer’s behalf as part of a real estate transaction, typically paid at closing. They can be applied toward closing costs, prepaid property taxes, title insurance, appraisal fees, and even discount points to reduce your mortgage rate. On a $350,000 home, a 3% seller concession puts $10,500 back in your pocket.

The maximum concession a seller can contribute depends on your loan type and down payment amount. Conventional loans cap seller concessions at 3% of the purchase price when your down payment is under 10%, 6% when it’s between 10% and 25%, and 9% when it’s above 25%. FHA loans allow up to 6%, VA loans allow up to 4%, and USDA loans allow up to 6% of the loan amount. Per CFPB guidelines, concessions are calculated based on the lesser of the sale price or the appraised value.

Concessions are negotiated during the offer stage, not after. Your agent includes the request in the purchase agreement, and the seller either accepts, counters, or declines. In a market where homes are sitting longer and sellers are motivated, concessions are more common — and smart buyers are using them strategically, not just for closing costs but to buy down their rate or fund a temporary buydown.

Key Facts

• Seller concessions are appearing in roughly half of all transactions in early 2026, according to industry data.
• Conventional loan concessions max out at 3%, 6%, or 9% depending on your down payment amount.
• FHA allows up to 6%, VA allows up to 4%, and USDA allows up to 6% of the loan amount.
• Concessions can be used for closing costs, discount points, prepaid taxes, title insurance, and temporary buydowns.
• The concession amount is based on the lesser of the sale price or the appraised value.

Frequently Asked Questions

Can I use seller concessions to buy down my mortgage rate?

Yes. You can apply concessions toward discount points, which reduce your interest rate and lower your monthly payment for the life of the loan. One point costs 1% of the loan amount and typically reduces your rate by about 0.25%. This is one of the most effective uses of seller concessions in a high-rate environment.

Do seller concessions affect my loan amount?

No. Concessions reduce how much cash you need at closing, but they don’t change your loan balance. The seller is paying fees that you would otherwise owe out of pocket. Your mortgage amount stays the same as if you’d paid those costs yourself.

When are seller concessions easiest to negotiate?

Concessions are easiest to get when the market favors buyers — when homes are sitting on the market longer, inventory is high, and sellers are competing for fewer active buyers. Homes that have been listed for 60 or more days are prime candidates for concession requests.