Seller Concession

A seller concession is money the seller agrees to credit the buyer at closing, most often to help cover the buyer's closing costs. Rather than lowering the sale price, the seller effectively pays a set amount, say 5,000 dollars, toward the buyer's lender fees, prepaid taxes and insurance, or points to buy down the interest rate. This can help a buyer who has enough for the down payment but is short on cash for closing. Concessions are negotiated as part of the offer and written into the purchase agreement. Lenders cap how much a seller can contribute, and the limit depends on the loan type and down payment, so confirm the current cap with your loan officer before counting on it.