A seller's credit, or seller concession, is a financial agreement where the seller covers part of the buyer's closing costs instead of lowering the home price. It is negotiated as part of the purchase agreement. This credit aids in making home purchases more affordable, especially in high-cost, competitive markets. Sellers may use credits for various reasons, including attracting buyers, avoiding repairs, or maintaining the sale price. Limits on how much a seller can contribute depend on the type of loan and down payment.
A seller's credit is a financial agreement where the home seller agrees to cover some of the buyer's closing costs, typically negotiated as part of the purchase agreement.
Seller credits can make home purchases more affordable, especially in competitive markets, where buyers commonly face high prices and closing costs.
Sellers may offer credits to attract buyers in slower markets, avoid repairs, keep deals alive after problem inspections, and maintain the list price.
Seller credit limits vary based on loan type and buyer down payment, generally allowing contributions from 3% to 6% for conventional loans, and up to 6% for FHA and USDA loans.
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