What is Seller Concession?
A seller concession is an agreement where the seller pays some of the buyer's closing costs or prepaid items to facilitate the sale.
A seller concession is a negotiation in which the seller agrees to cover a portion of the buyer's closing costs, such as appraisal fees, title insurance, or loan origination fees. Borrowers encounter it in buyer's markets or when the seller is motivated. Watch for limits set by loan programs and lenders, which vary by loan type and down payment. Concessions cannot exceed actual closing costs, and the amount must be documented on the Closing Disclosure. They can reduce the cash needed at closing but may affect the purchase price or appraisal. Ensure the contract clearly states the concession amount.
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