In today’s real estate market, knowing when to ask for seller concessions can be just as important as knowing how. Whether you’re a first-time buyer, mortgage advisor, or seasoned real estate agent, understanding the timing of these negotiations can save thousands in closing costs and even make or break a deal.
This comprehensive guide explores optimal timing strategies, negotiation best practices, and the broader impact of seller concessions on your home financing journey.
Key Takeaways
- Seller concessions are costs the seller agrees to cover to help close the deal — usually related to closing costs, repairs, or mortgage rate buydowns.
- The best times to request concessions are in a buyer’s market, when a home sits on the market longer than average, after a problematic home inspection, or near the end of fiscal periods.
- Timing and strategy are everything — knowing when to ask can dramatically improve your negotiating power and financial flexibility.
What Are Seller Concessions?
Seller concessions are negotiated agreements in which the seller agrees to cover certain costs traditionally paid by the buyer at closing. These concessions can include:
- Title insurance
- Appraisal fees
- Loan origination fees
- Property taxes
- Attorney fees
- Discount points (used to buy down the mortgage interest rate)
- Repairs identified during inspection
In essence, seller concessions function as a financial incentive from the seller to the buyer. They can ease the financial burden of closing and make the home purchase more appealing — especially for buyers with limited upfront cash.
Seller Concessions vs. Price Reduction
While a price reduction lowers the sale price of the home, seller concessions reduce the buyer’s out-of-pocket expenses by shifting specific costs to the seller. In some cases, buyers prefer concessions because they provide immediate financial relief rather than long-term savings via a slightly smaller mortgage.
Why Seller Concessions Matter in Mortgages
Seller concessions can have a direct impact on a buyer’s financing strategy:
- Lower Cash-to-Close Requirement: Buyers need less upfront cash, which can be especially helpful for FHA, VA, or USDA loan borrowers with limited reserves.
- Improved Loan Qualification Chances: Lower out-of-pocket expenses may help buyers stay within debt-to-income (DTI) thresholds required by lenders.
- Buydown Opportunities: Concessions can be used to buy down the mortgage rate, reducing monthly payments in the long term.
For mortgage professionals, understanding seller concessions can help you guide clients more effectively — aligning loan products with their cash flow capabilities and financial goals.
Best Times to Ask for Seller Concessions
Knowing when to request concessions is crucial. Sellers don’t always advertise that they’re open to them, but the right market signals and timing can open the door.
1. In a Buyer’s Market
In real estate, a buyer’s market occurs when supply (homes for sale) exceeds demand (buyers). This shifts leverage toward buyers and opens the opportunity to request extras — like seller concessions.
Why it works:
Sellers are competing for a smaller pool of buyers. A concession can sweeten the deal and get the property off the market faster.
Stat: Redfin reported that 42% of homes sold in Q1 2025 included at least one seller concession — most commonly closing costs or repair credits.
2. After a Home Inspection Reveals Issues
This is one of the most effective points to ask for concessions. If the inspection uncovers repairs, structural concerns, or code violations, the buyer can request a concession rather than ask the seller to complete the repairs.
Why it works:
Many sellers prefer to avoid repair delays and offer credits instead — especially if they’ve already moved or want to close quickly.
3. When a Property Is Overpriced or Stagnant
If a home has been sitting on the market longer than average (more than 30–45 days in many markets), the seller may be more open to incentives like concessions.
Signs to watch:
- Multiple price reductions
- Empty home listings (staged but unoccupied)
- Listings relisted after previous withdrawal
Why it works:
Time on the market increases carrying costs for the seller, incentivizing them to negotiate concessions to close the sale.
4. End of the Month or Fiscal Quarter
Sellers — and their agents — often face deadlines. Whether it’s to meet sales quotas, complete tax paperwork, or align with relocation plans, the end of the month or quarter can create urgency.
Why it works:
Urgency increases motivation. Sellers may prioritize a fast close over holding out for full price — making concessions a practical bargaining chip.
Mortgage Guidelines on Seller Concessions
Different loan types impose limits on how much a seller can contribute in concessions. Here’s a breakdown:
Loan Type |
Max Seller Concessions |
| Conventional (3%–10% down) | 3% of purchase price |
| Conventional (>10% down) | Up to 6% |
| FHA Loan | 6% |
| VA Loan | 4% (plus certain prepaid items) |
| USDA Loan | 6% |
Tip: Check with the lender before finalizing any agreement. Exceeding concession limits can void the loan approval.
How to Negotiate Seller Concessions
Here are five actionable steps to secure seller concessions at the right time:
1. Know Your Leverage
Before making an offer, research market trends. Is inventory high? Have prices recently dropped? Is the listing stale? These signals will shape your approach.
2. Lean on Your Agent
Your real estate agent can review listing history, seller motivation, and local norms. They’ll also structure your offer strategically to avoid overplaying your hand.
3. Frame the Ask Tactfully
Use phrasing that positions the concession as a win-win:
- “To make this deal work financially, we’d like to request $6,000 in closing cost assistance.”
- “Based on the inspection, we’re comfortable moving forward if the seller offers a $5,000 credit for repairs.”
4. Avoid Requesting Too Much
Keep concession requests reasonable and based on documented needs (e.g., inspection results or high closing costs). Excessive demands may push a seller toward another offer.
5. Get It in Writing
All concessions must be included in the purchase contract. Use exact language, such as:
“Seller to contribute up to $X toward buyer’s closing costs, prepaid items, and points.”
FAQs
Can seller concessions help lower my monthly mortgage payment?
Yes — if applied toward discount points, concessions can buy down your interest rate, reducing monthly payments.
Can I ask for both a price reduction and seller concessions?
Yes, but it depends on the seller’s flexibility. Combining both strategies is possible, but may affect appraisal and lender approval.
Do seller concessions affect home appraisal?
They can. If the concessions inflate the purchase price beyond market value, the home may not appraise, impacting loan approval.
Can seller concessions be used for furniture or appliances?
Not usually. Lenders typically restrict concessions to allowable closing-related costs and mortgage expenses.
Final Thoughts
Seller concessions are one of the most underused — yet highly impactful — tools in a buyer’s negotiation toolkit. Whether you’re buying your first home or assisting clients as a mortgage advisor, knowing when and how to ask for concessions can unlock substantial savings.
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