What are seller concessions?

Seller concessions, also known as seller contributions, are incentives that a seller may offer to a buyer to make a purchase more appealing. These concessions are typically financial and can cover a variety of costs associated with the purchase of a property.

Common examples of seller concessions include paying for a portion or all of the buyer's closing costs, providing a credit towards repairs or home improvements, or reducing the purchase price of the property. The amount of the seller concession is typically negotiated as part of the purchase agreement between the buyer and seller.

Seller concessions can be a useful tool for both buyers and sellers.

For buyers, they can help to reduce the out-of-pocket expenses associated with purchasing a home, making it easier to afford.

For sellers, offering concessions can make their property more attractive to potential buyers, potentially leading to a quicker sale.

Another type of seller concession that may be offered is a buy-down of the interest rate on the buyer's mortgage. Essentially, the seller agrees to pay a certain amount of money upfront in order to reduce the interest rate on the buyer's loan. This can be a valuable incentive for buyers, as it can result in significant savings over the life of the loan.