If you’ve been shopping for a home, you’ve probably heard the term “sellers assist,” also called seller concessions. So, what is sellers assist? In a home sale, it’s when the seller agrees to pay a portion of the buyer’s closing costs to increase the chances of closing a deal.
This kind of arrangement is also known as seller credits or closing cost assistance. It’s a win-win situation — for the buyer, less cash is needed at closing, making homeownership more achievable. And for the seller, it increases the chance of closing the deal.
It’s important to note that seller assists can never cover your down payment. Seller concessions only apply to allowable closing costs, prepaid expenses, and certain fees.
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How does sellers assist work?
Let’s say you’re buying a $250,000 home. Your closing costs run about $8,000. With a seller assist, the seller might agree to cover $5,000 of those costs. That means you only need to bring $3,000 to closing instead of the full $8,000.
| Without seller assist | With $5,000 sellers assist | |
|---|---|---|
| Purchase price | $250,000 | $255,000 |
| Closing costs | $8,000 | $8,000 |
| Buyer pays at closing | $8,000 | $3,000 |
| Seller credit | $0 | $5,000 |
Here’s how seller assist works in practice.
1. Negotiate the concession
During the offer stage, the buyer can ask the seller to cover part of the closing costs. This can be a flat dollar amount or a percentage of the closing costs. The seller can agree, counter, or decline.
2. Put it in writing
Once both parties agree, the concession must be written directly into the purchase contract or attached as an addendum.
3. Get an appraisal
You’ll likely need an appraisal if you’re getting a mortgage loan, and if the seller raises the purchase price of the home to offset the concession, the appraisal helps confirm whether the property is worth the amount being paid.
For example, if the home was listed at $250,000 but the contract is written at $255,000 with a $5,000 concession, the appraiser must confirm it’s worth $255,000.
4. Close on the house
During closing, the concession shows up as a credit on the buyer’s side of the settlement statement. This reduces what the buyer needs to pay.
⚠️Seller concessions in real estate can only be applied to allowable closing costs. They cannot go toward your down payment.
Sellers assist limits by loan type
Every mortgage program sets rules for how much the seller can contribute toward your closing costs. These limits prevent sellers from using concessions in ways that inflate prices or reduce buyer equity too much.
Here’s a quick comparison of seller assist limits by loan type.
| Loan type | Maximum seller concession % |
|---|---|
| FHA | 6% |
| Conventional | 3%-9% |
| VA | 4% |
| USDA | 6% |
Let’s look at each loan type in more detail.
FHA sellers assist limits
With Federal Housing Administration loans, sellers can contribute up to 6% of the home’s purchase price toward a buyer’s closing costs. For example, on a $250,000 home, that’s as much as $15,000 in seller concessions.
However, FHA seller concessions can only be applied to specific costs, like loan origination fees, discount points, prepaid property taxes, title, and appraisal fees. You cannot use it to cover the buyer’s minimum 3.5% down payment.
The 6% limit is generous compared to other loan types, which makes FHA a popular choice for first-time homebuyers with limited savings. But remember, if concessions push the sales price higher, the property must still appraise for that amount.
Conventional loan sellers assist limits
Conventional loans use a tiered system for maximum seller concessions based on the size of your down payment. The more you put down, the more the seller can contribute.
| Down payment | Maximum seller assist |
|---|---|
| Less than 10% | 3% of purchase price |
| 10%-25% | 6% of purchase price |
| More than 25% | 9% of purchase price |
For example, if you buy a $300,000 home with 5% down, the seller can contribute up to $9,000 (3%). But if you put 20% down, the cap doubles to $18,000 (6%). With more than 25% down payment, you could get as much as $27,000 (9%).
If you’re wondering about the difference between seller assist limits, Fannie Mae and Freddie Mac assume buyers making smaller down payments are taking on more risk, so they limit concessions to ensure borrowers maintain equity in the property. Larger down payments mean more financial stability, thus the higher cap.
Remember that the maximum seller assist limits only apply to primary residences and second homes. Investment properties have a cap of 2%, no matter the down payment.
VA seller concessions limits
The Department of Veteran Affairs has capped VA seller concessions to 4% of the loan amount. Allowable VA concessions include the VA funding fee, property taxes, insurance, and paying off a buyer’s credit balances or judgments. The 4% cap does not include customary closing costs like title fees, appraisal fees, or recording costs.
USDA seller concessions limits
USDA loans don’t have a specific cap on seller concessions. However, most lenders impose a maximum of 6%. Since USDA loans are for low- and moderate-income families in rural areas, this flexibility helps make homeownership more affordable.
Pros and cons of seller assist
Like any tool in real estate, seller assist has advantages and disadvantages for both buyers and sellers.
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Negotiation strategies: How to ask for sellers assist
If you want to use a seller assist to lower your upfront costs, you’ll need the best negotiation strategy. Not every seller is willing to cover closing costs, so how you frame your request can mean the difference between getting your offer accepted or denied.
Here are tips for asking for sellers assist:
- Work with an agent: An experienced real estate agent understands the norms in your local market. In some areas, concessions are common, and in some regions, they’re rare. An agent can help you decide how much to request without scaring off the seller.
- Strengthen your offer: If you’re asking for a large concession, you may want to offer the full listing price or even slightly more. This helps the seller feel like they’re not losing money, especially if they need to justify the numbers.
- Be flexible: In a competitive market, instead of asking for the maximum, consider proposing a split. For example, you could request the seller cover half of the closing costs while you cover the rest.
The right agent can help you write a strong offer and determine how to ask for a sellers assist. Clever can introduce you to experienced agents in your area who know exactly how to ask for a sellers assist. Take a short quiz to meet agents today!
💡 Whether the seller accepts or declines concessions depends on market conditions. In a buyer’s market, you’ll have more leverage. In a seller’s market, concessions are less likely but possible with the right negotiation strategies.
The bottom line
A sellers assist can be a useful tool for both buyers and sellers. For buyers, it reduces upfront cash needed. For sellers, it can mean attracting more offers and saving shaky deals. But remember, limits vary by loan type, and local market conditions play a huge role. Always check with your lender and your agent before asking for concessions.
FAQ
Seller concessions can make buying a home more affordable, especially if you’re tight on cash. By shifting some costs to the seller, you reduce how much you need to pay in closing costs.
But since concessions often mean raising the sales price to balance things out, your monthly mortgage payment could be slightly higher. It’s a trade-off worth weighing carefully.
The amount you can request depends on your loan type.
- FHA loans: Up to 6% of the purchase price
- VA loans: Up to 4% plus certain additional costs like prepaid expenses
- Conventional loans: Typically 3%–9%, depending on your down payment
- USDA loans: Usually up to 6%
These limits are set by lenders to prevent concessions from inflating the value of the home beyond what’s reasonable.
No. Seller concessions can only go toward closing costs — things like loan origination fees, title fees, appraisals, and insurance. Your down payment must still come from your pocket.
Concessions make a property more appealing to buyers, particularly first-time buyers who might otherwise struggle to cover upfront costs. This can help sellers attract more offers and close deals faster.
If your closing costs are less than the agreed sellers assist, you don’t pocket the unused portion of the concession.