Seller concessions and seller credits are often used interchangeably, but they’re not the same. Concessions are incentives sellers offer to make the transaction more attractive. A seller credit is one type of seller concession designed to lower closing costs.
And in the current buyer’s market, more and more sellers are offering concessions. In May 2026, over 46% of sellers offered concessions, according to Redfin.
Here’s what you need to know about the two.
What are seller concessions?
A seller concession is any financial or material benefit a seller provides to make the purchase more attractive to the buyer.
Seller concessions can come in many forms, such as:
Closing cost credits: A fixed dollar amount that sellers offer that can cover loan origination and underwriting fees, prepay property taxes or HOA fees, or buy down the mortgage interest rate.
Valuable property: Sellers may leave behind staging furniture or other expensive items that don’t typically come with a home.
Additional allowances: Sellers can include funds for repairs, moving expenses, home warranties, and other perks unrelated to closing.
These concessions can benefit both the buyer and the seller, lowering the home’s cost for the buyer without diminishing its value for the seller.
What is a seller credit?
A seller credit is a type of seller concession, specifically a cash credit that goes toward the buyer’s closing costs.
Seller credits can cover loan origination, inspection, title insurance, and other common fees required to close the transaction. The seller credit can also be used to purchase discount points that lower the buyer’s interest rate.
There are limits to how much a seller can contribute, generally 3% to 9%, depending on the loan type and down payment.
For example, a conventional loan financing a $400,000 home purchase with a 5% down payment allows up to $12,000 in seller credits.
These credits can only be applied toward closing costs — not the down payment or cash back to the buyer. The buyer never receives the credit directly; it simply reduces what they owe at closing, freeing up cash they can then use for things like a rate buydown or repair expenses. If the credit exceeds the closing costs, the excess is deducted from the purchase price, which can affect the approved loan amount and how much cash the buyer needs to bring to the table.
Seller concessions vs. seller credits
Understanding seller concessions vs. seller credits can be confusing. Here’s a summary of how each one works.
Which is better for buyers?
Whether a seller credit or a different type of concession makes sense for you depends on your goals, financial situation, and the market.
A seller credit could be ideal if you’re short on cash or don’t want to deplete your savings, since it directly reduces your closing costs.
The current high-interest-rate environment may leave many home buyers preferring a rate buydown that lowers their long-term expenses. Or if the home inspection uncovers major repairs, you may opt for a repair credit.
Which is better for sellers?
Generally, sellers prefer not to make concessions, since those can eat into profits.
However, concessions can be an effective sales strategy in a buyer’s market, where there’s more home inventory than there is demand, and sellers compete to stand out.
The type of concession the seller prefers will likely depend on the local market, how long the home has been listed, its condition, and more.
Seller concessions vs. seller credit FAQs
Are seller concessions and seller credits the same thing?
No, seller concessions and seller credits are not the same, though they are related. A seller concession is any incentive a seller provides to make a transaction more attractive. A seller credit is a concession that directly lowers the buyer’s closing costs.
Can seller concessions be used for a down payment?
A seller concession cannot be used for a down payment. The down payment demonstrates to lenders that the buyer has sufficient assets to finance the home purchase. So lenders typically don’t allow the seller, real estate agent, or others involved in the real estate transaction to fund the down payment.
How much can I ask for in seller concessions or credits?
Closing cost credits are limited to 3% to 9% of the home’s purchase price and cannot exceed closing costs. Other concessions, including cash credits above the maximum limit, are deducted from the purchase price, which can lower the loan approval amount and ultimately how much the buyer has to pay out of pocket.
Can I ask for both a price reduction and seller concessions?
While there’s no rule against asking for both a price reduction and a seller concession, doing so can make your offer less attractive to the seller, especially when there are competing offers from other buyers. However, if you’re under contract at a reduced price, and items come up in the inspection that you’d like taken care of, you can absolutely ask for seller concessions at that time.
