Seller Concessions
Direct definition
Money contributed by the seller toward the buyer's closing costs, prepaid items, or rate buydown.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Concessions are capped by program and occupancy — often 3%–6% of price. They can eliminate cash-to-close friction without lowering the purchase price.
Why it matters
Concessions can unlock a purchase for a buyer short on cash, and they're often negotiable in slower markets.
Where you may see it
- Purchase agreement
- Loan Estimate
- Closing Disclosure
A real-world example
On a $500,000 purchase, a $10,000 seller concession covers most of your closing costs.
Educational and illustrative only
A common misunderstanding
Seller concessions aren't unlimited — loan programs cap how much can be applied toward a buyer's costs, and they can't be used to fund the down payment itself.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026