What Are Seller Concessions and Closing Credits? (And How They Can Help You!)

If you’re getting ready to buy a home, you’ve probably heard the terms seller concessions or closing credits — but what do they really mean? And how can they help you?

Let’s break it down in a simple way:
Seller concessions (or closing credits) are when the seller agrees to cover part of your closing costs, like loan fees, title charges, or prepaid items like property taxes and homeowners insurance. Instead of you bringing all the cash to closing, the seller pitches in to help cover some of those expenses.

How Does It Work?

  • You work with your lender ahead of time to find out how much you’re allowed to have covered by the seller. (There are limits depending on your loan type and down payment — but your lender will help you navigate that.)

  • You can write seller concessions into your offer up front.
    We’ve seen buyers who know they’ll want to update things like flooring, paint, or appliances after closing. To free up their cash, they’ll build closing credits into the offer from the start.

  • You can also negotiate them during inspections.
    Sometimes, instead of asking the seller to fix something found during an inspection (roof repairs, a furnace that needs replacing), buyers simply ask for a closing cost credit instead. It gives you flexibility to handle updates your way after you move in.

A Common Strategy: "Tacking It On"

One creative (and pretty common) strategy is tacking the closing credit onto the purchase price.
For example:

  • Let’s say you want $5,000 in closing credits to cover some updates.

  • You offer $5,000 more on the purchase price than you originally planned — as long as the seller agrees to give you that $5,000 back as a credit at closing.

  • To the seller, the offer looks nearly the same net price-wise, but it saves you from draining your bank account right away.

This way, you still get the home you love — and you keep more cash in your pocket for renovations, repairs, or just to give yourself a little breathing room.

Why Talk to Your Lender First?

Not all loan types allow the same amount of seller-paid costs, and there are maximum percentages based on your down payment. That’s why it’s important to chat with your lender early — they’ll tell you exactly how much you can ask for and what will work best with your financing.

Bottom Line:

Seller concessions and closing credits are a smart tool to help you manage your upfront costs.
Whether you work it into your offer right away, or use it as a negotiating tool during inspections, it’s all about helping you land in your new home with less financial stress.

If you want to talk about ways to structure your offer — or if you want to see what creative options might work best for you — we’re here to help!

jennifer Sloan