Seller Concessions: How to Negotiate Closing Cost Help
A seller concession is an agreement in the purchase contract for the seller to pay some of the buyer's closing costs. Instead of lowering the price, the seller contributes toward costs like lender fees, prepaid items, or a rate buydown. For buyers short on cash, that can matter more than a lower price. How a concession works The buyer and seller agree on a price and a dollar amount (or percentage) the seller will credit at closing. The credit appears on the Closing Disclosure and reduces the cash the buyer must bring. Nothing changes about the loan amount unless the price was raised to cover the credit. Why a buyer might prefer concessions over a price cut A price reduction lowers the loan balance and the monthly payment slightly for the life of the loan. A concession lowers upfront cash needed. A buyer who has limited savings after the down payment may get more value from the credit, particularly if it funds a temporary or permanent rate buydown that lowers the monthly pay...