Seller Concessions: The Closing Cost Fix More Buyers Are Asking For

Most buyers brace for the down payment. What catches them off guard is the 2 to 5 percent in additional cash they need just to close. Closing costs sneak up on people, and they can be the difference between a deal that works and one that falls apart.

Seller concessions are one of the best tools to close that gap. Here's what you need to know.

Ask early, or don't ask at all

If you want a seller to cover part of your closing costs, it has to be in your initial offer. Once the contract is signed, that opportunity is gone. The seller has no obligation to help, and you've lost your leverage to ask.

This isn't a long shot either. Redfin data shows buyers requested concessions in roughly 44 percent of home sales nationwide in early 2025. Almost one in two sellers were already putting money toward the buyer's costs.

What a seller concession actually is

It's a credit the seller agrees to give toward your allowable closing costs, prepaid expenses, discount points, or approved financing costs. The National Association of Realtors defines it as money the seller pays to offset costs tied to buying the home, and it can be a percentage of the price or a flat dollar amount.

Why it works for both sides

For the buyer, it means less cash out of pocket at the table. Instead of scrambling to cover fees, that money is already handled.

For the seller, the contract price stays intact. A $5,000 concession solves your cash problem without the market reading it as a $5,000 price cut. That matters. It protects the comparable sale for every other home in the neighborhood.

What the money can cover

Concessions typically apply to:

• Loan origination charges
• Discount points
• Title insurance
• Escrow fees
• Recording charges
• Prepaid taxes and insurance
• Approved rate buydowns

These fall into two buckets. Recurring costs are ongoing, things like mortgage interest, property taxes, and homeowners insurance. Non-recurring costs are one time fees, like lender charges, appraisal fees, title insurance, escrow, recording, and notary fees. Both count toward the same limit under Fannie Mae's Interested Party Contribution rules, so it's not an unlimited pool of money.

One more cost buyers need to plan for

Here's something that trips people up. Buyers are now responsible for their own agent's commission, which can run up to an additional 3 percent. You can ask the seller to cover this too, but just like everything else, it has to be part of your initial offer. If the seller says no, you'll be paying it yourself at closing.

The takeaway

Closing costs are the real hurdle for most buyers, not the down payment. Seller concessions are one of the most effective ways to bridge that gap, but only if you ask for them before you sign. If you're getting ready to buy and want to know what you could realistically request, let's talk it through.