Seller Concession

A seller concession is when you agree to cover some of the buyer’s costs — usually closing costs — to sweeten the deal and get your home sold. Think of it as a discount that doesn’t show up in the sale price but definitely shows up in your net proceeds.

How Seller Concessions Work

Instead of lowering the listing price by $10,000, you keep the price where it is and agree to pay $10,000 of the buyer’s closing costs at settlement. The buyer gets the same financial benefit, and you maintain a higher sale price on paper — which helps with comparable sales in the neighborhood.

Common concessions include covering the buyer’s title insurance, appraisal fees, loan origination points, prepaid property taxes, or homeowner’s insurance. The exact items are negotiated in the purchase agreement.

How Much Is Typical

Concessions usually range from 1% to 6% of the sale price, depending on the buyer’s loan type. FHA loans cap seller concessions at 6%. Conventional loans with less than 10% down cap at 3%. VA loans allow up to 4%.

On a $350,000 home, a 3% concession means you’re handing over $10,500 at closing. That comes directly out of your proceeds.

When Concessions Make Sense

In a buyer’s market where homes sit for weeks without offers, concessions can break the logjam. A buyer who’s short on cash for closing costs might choose your home over a competitor that’s $5,000 cheaper but offers no help with fees.

They’re also useful when an appraisal comes in low. Rather than dropping your price (which affects comps for the whole neighborhood), you can offer a concession that bridges the gap for the buyer.

The Bottom Line

Concessions reduce your take-home amount just like a price reduction would. The math is nearly identical — you’re just moving the discount from one line item to another.

Use a net proceeds calculator to see exactly how concessions affect your payout. The selling guide covers negotiation tactics for handling concession requests from buyers.