What Are Seller Concessions?

What Are Seller Concessions?

Written for Louisiana Mortgage Handbook by Chasity Graff, Mortgage Broker/Owner of LA Lending, LLC.

Last reviewed: 2026-06-24

Quick Answer

Seller concessions are amounts the seller agrees to contribute toward certain allowable buyer costs.

They may help lower the buyer’s cash needed at closing, but they must fit the loan program, contract, lender guidelines, and final settlement figures.

What Seller Concessions Can Help With

Seller concessions may be used toward certain closing costs, prepaid items, escrows, and other allowable costs depending on the loan program.

They usually cannot be used however the buyer wants. The rules depend on the loan type, occupancy, down payment, and lender guidelines.

Why Limits Matter

Loan programs have limits on how much seller contribution may be allowed.

If the seller credit is too high for the file, it may need to be reduced or handled another way. Extra seller credit does not automatically become cash back to the buyer.

My Thought Process

Seller concessions can be very helpful, but they need to be structured correctly from the beginning.

I like to review the estimated numbers before the offer is written so the credit fits the loan program and actually helps the borrower.

Common Mistakes

  • Asking for a seller credit without knowing the loan program limits.
  • Assuming unused seller credit comes back as cash.
  • Forgetting that taxes, insurance, and rate can change how much credit is needed.
  • Writing the contract before reviewing estimated cash to close.
  • Assuming all costs are eligible to be paid by the seller.

Bottom Line

Seller concessions can help reduce cash to close, but they need to fit the loan rules and the real numbers.

The best time to plan seller concessions is before the offer is written.

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Educational Note

Educational note: This page is meant to explain the mortgage process in plain English. It is not a loan approval, commitment to lend, rate quote, or legal/tax advice. Mortgage programs, pricing, payments, documentation requirements, and guidelines can change. Final approval depends on credit, income, assets, property approval, appraisal, title review, underwriting review, lender guidelines, and approved credit.

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