Seller Concessions: What They Can and Cannot Pay For

Asking the seller to cover costs is one of the most common moves in a negotiation, and one of the easiest to write incorrectly. The contract can say anything the parties agree to. What actually gets paid at closing is decided by the program. Snapshot as of 2026-08. This page does not quote a cap percentage or promise a seller credit will be allowed on your file. The program guide in force and the lender reviewing the contract decide that.

What a concession is

A seller concession is money the seller credits the buyer at closing toward closing costs, prepaids, or a rate buydown. It is negotiated in the contract and shown on the closing disclosure.

That is the whole mechanism — money moving from the seller's side of the settlement statement to the buyer's costs. It is not a discount applied to the loan, and it does not reduce the amount being borrowed.

What it can pay for

Closing costs, prepaids, and a rate buydown are the usual targets. Those are the lines described in Utah closing costs and cash to close.

Concessions are often used to fund a temporary or permanent rate buydown. Whether that beats a price reduction depends on how long the buyer keeps the loan, which is a break-even question, not a rule.

The cap

Every program caps what the seller may contribute, and the cap varies by program, occupancy, and loan-to-value. A concession above the cap is generally reduced or reallocated rather than paid, which is why the number belongs in the offer only after a loan officer confirms it.

We deliberately do not print a percentage here. Caps differ across programs and move with occupancy and loan-to-value, and a stale number in a blog post is exactly how an offer gets written wrong. Ask the loan officer for the cap that applies to this file before the concession goes into the contract.

Credit or price reduction?

A concession is usually paid for somewhere. Raising the price to fund a credit changes the loan amount and has to appraise at the higher figure. The appraisal does not care how the parties labelled the money.

What happens next

Before the offer goes out, get the applicable cap and a rough closing-cost figure from the loan officer so the concession you ask for is one that can actually be paid. If the appraisal is the real risk, read when the appraisal comes in low. Start a conversation.