Buyer and Seller Concessions: What They are and How They Work

Introduction

Whether you’re buying your first home or selling one you’ve owned for years, you may hear the term concessions come up in negotiations. In real estate, buyer concessions y seller concessions are incentives one party offers to make a deal more attractive or to help cover certain costs.

Understanding the difference between buyer and seller concessions—and how they can be used strategically—can help you save money, speed up the sale, or make your offer stand out.

What Are Seller Concessions?

Seller concessions are costs the seller agrees to pay on the buyer’s behalf at closing. These can make it easier for a buyer to afford a home by reducing their upfront expenses. Common examples include:

• Loan origination fees
• Title insurance
• Appraisal and inspection costs
• Attorney or escrow fees
• Prepaid property taxes or homeowner’s insurance
• Discount points to lower the buyer’s interest rate
• HOA transfer fees
• Home warranty coverage

Seller concessions are negotiated during the offer stage and are usually expressed as a dollar amount or a percentage of the purchase price.

What Are Buyer Concessions?

Buyer concessions are incentives or benefits that the buyer offers to the seller to make their offer more appealing—especially in a competitive, seller’s market. Instead of asking the seller to pay extra costs, the buyer offers terms or perks that can help the seller close quickly and smoothly.

Examples of buyer concessions include:

• Waiving certain contingencies (like minor repair requests)
• Offering a faster closing timeline
• Covering some or all of the seller’s closing costs (e.g., transfer taxes, recording fees)
• Agreeing to purchase the property “as-is”
• Offering a rent-back period to give the seller extra time to move

Buyer concessions can help you win a bidding war without necessarily increasing your offer price.

How Concessions Benefit Both Sides

For Buyers:

• Seller concessions reduce the cash needed at closing
• Can help lower the interest rate through discount points
• Make homeownership possible for those with limited upfront funds

For Sellers:

• Buyer concessions can mean fewer requests and a smoother path to closing
• Seller concessions can help a home stand out in a slower market
• Both types of concessions can create goodwill and lead to a quicker sale

Lender Limits on Seller Concessions

Most loan programs cap how much a seller can contribute:

These limits apply to the lower of the purchase price or appraised value, and seller concessions can only be used toward allowable closing costs—not the down payment.

Tips for Negotiating Concessions

1. Know the market – In a buyer’s market, seller concessions are more common. In a seller’s market, buyer concessions can help your offer rise to the top.
2. Prioritize needs – Decide which concessions matter most (closing cost help, quick closing, repairs, etc.).
3. Work with an experienced agent – They can help you structure offers and counteroffers so concessions work in your favor.
4. Stay within lender rules – For seller concessions, ensure you don’t exceed your loan program’s limits.

Bottom Line

Buyer concessions y seller concessions are valuable tools in real estate negotiations. They can bridge the gap between what one side wants and what the other can offer, helping deals close faster and with less friction. Whether you’re buying or selling, understanding how concessions work—and when to use them—can give you a strategic advantage in today’s market.