Concessions are simply a part of the negotiations between buyer and seller, much like the purchase price. The buyer may request that the seller pay for closing costs, but it’s up to the seller to accept or reject the offer. Sellers may choose to pay for concessions in order to sell their home more quickly.

Common examples include a seller agreeing to cover part of a buyer’s closing costs, paying for a home warranty or offering to cover the cost of needed repairs uncovered during the home inspection. Seller concessions are just one of many negotiating strategies in real estate transactions.

A financing concession is when the seller offers to pay a higher portion of the buyer’s closing costs (typically 2 to 5% of the mortgage). Here are some examples of closing costs a seller can offer to cover as a concession: Origination fees: The amount the buyer pays their lender for processing the loan application.

The home’s sale price is far less important than what a seller nets from the sale. For example, if you sell a $400,000 home and the buyer offers $395,000 with a $5000 seller’s concession, this is no different than a buyer offering $390,000. A $390,000 net to the seller may be great, depending on the real estate market.