Know when concessions close the deal — and when they cost you more than they should.
Seller concessions are credits or payments the seller agrees to make toward the buyer's transaction costs. Instead of lowering the sale price, you're covering expenses the buyer would otherwise pay out of pocket — things like closing costs, loan origination fees, title insurance, or pre-paid property taxes.
They're a negotiation tool. In competitive markets, you may never see a concession request. In slower markets or with cash-constrained buyers, concessions can be the difference between a deal and no deal.
Lenders and loan programs cap how much the seller can contribute. Exceeding these limits can kill the deal.
| Loan Type | Max Seller Concession | Notes |
|---|---|---|
| Conventional (≥25% down) | 9% of sale price | Most flexible for higher down payments |
| Conventional (10–24% down) | 6% of sale price | Standard limit for most conventional buyers |
| Conventional (<10% down) | 3% of sale price | Tight limit — common with first-time buyers |
| FHA | 6% of sale price | Government-backed, popular with first-time buyers |
| VA | 4% + all closing costs | 4% cap on certain items; closing costs unlimited |
| USDA | 6% of sale price | Rural development loans |
| Cash | No formal limit | Whatever both parties agree to |
Your home has been sitting. If you're past the 30-day mark with limited showings, concessions can re-energize buyer interest without a visible price cut on the MLS.
The buyer is qualified but cash-poor. Some buyers qualify for the mortgage but struggle with closing costs. A concession keeps the sale price intact while removing the buyer's cash barrier.
Inspection found issues. Rather than delaying closing for repairs, a repair credit lets you close on time while the buyer handles the fix on their schedule.
You need to sell quickly. Job relocation, carrying two mortgages, or a market shift — speed sometimes matters more than squeezing out the last dollar.
They both reduce what the seller takes home, but they work differently:
| Seller Concession | Price Reduction | |
|---|---|---|
| Sale price on record | Stays at original price | Lower recorded sale price |
| Buyer's loan amount | Based on original price | Lower loan amount |
| Appraisal impact | Must still appraise at contract price | Easier to appraise at lower price |
| Buyer benefit | Less cash needed at closing | Lower monthly payments |
| Comparable sales impact | Higher comp for neighborhood | Lower comp for neighborhood |
A managing broker with construction and finance experience can model both scenarios against your specific numbers — net proceeds, carrying costs, and time on market — to determine which approach puts more money in your pocket.
Here's where it gets interesting. Concessions reduce your net proceeds. So does commission. When both are high, they compound.
Example on a $1,000,000 home with a 3% seller concession:
| Traditional Agent (3%) | ShopProp ($4,495 flat) | |
|---|---|---|
| Sale price | $1,000,000 | $1,000,000 |
| Seller commission | $30,000 | $4,495 |
| Buyer agent (2.5%) | $25,000 | $25,000 |
| Seller concession (3%) | $30,000 | $30,000 |
| Total deductions | $85,000 | $59,495 |
| You keep | $915,000 | $940,505 |
That's $25,505 more equity preserved with ShopProp's flat fee — before concessions even enter the picture, you're already in a stronger position to negotiate.
At ShopProp, a managing broker reviews every concession request before you respond. With backgrounds in construction and finance, they evaluate:
This isn't a back-office review. It's direct, active involvement in your transaction — at a flat $4,495, not a percentage of your sale.
Use ShopProp's commission calculator to model your net proceeds — including concessions, commission, and closing costs.
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