How to Ask for Seller Concessions
- Richard Elias
- 15 hours ago
- 8 min read
Seller concessions can cut your cash to close by thousands of dollars. If I need help with closing costs, prepaids, or inspection-related repairs, I ask for a seller credit based on my loan limit, my actual costs, and the local market.
Here’s the short version:
Seller concessions lower the cash I bring to closing
Price cuts lower my loan balance and monthly payment a little
Repair credits help when the inspection finds issues
I can only use seller credits for allowed closing costs, prepaids, and sometimes discount points
I can’t use them for my down payment or get leftover credit back as cash
In many San Diego deals, negotiated credits often fall around 1% to 3% of the purchase price
Nationally, seller concessions appeared in 46.2% of home sales in May 2026
On a $1,000,000 home, even a 1% credit = $10,000
On a $1,100,000 home, cash due at closing can land around $20,000 to $30,000
What I do is simple: I check my Loan Estimate, confirm my loan program cap, ask for a credit tied to actual numbers, and make sure the wording in the offer is exact. If the inspection turns up roof, plumbing, electrical, mold, or foundation issues, I back my request with contractor estimates.
A seller credit helps most when my main problem is upfront cash, not my long-term monthly payment. For example, a $10,000 price cut may trim the payment by only about $40 to $70 per month, while a $10,000 seller credit can reduce cash to close by the full $10,000.
Quick comparison:
Option | What it helps most | Best when |
Seller concession | Cash to close | I need help with closing costs or prepaids |
Price reduction | Monthly payment | I want a lower loan amount |
Repair credit | Inspection problems | I want money for repairs instead of seller-done work |
Before I send the offer, I match the ask to three things: loan rules, closing costs, and market conditions. That keeps the request clear, lender-friendly, and more likely to work.
The Seller Concession Strategy Lenders Don't Talk About
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Prepare Your Numbers Before Making the Request
Once you understand how seller credits work, the next move is simple: figure out the exact amount you need. Don't throw out a nice round number and hope it sticks. Tie your request to costs you can show on paper.
Check Your Loan Program Limits and Estimated Closing Costs
Start with your Loan Estimate. Add up your closing costs and prepaids, then compare that total with your loan program's concession cap.
On a $1,100,000 home, cash due at closing can easily land around $20,000 to $30,000. That's the number your request should point to, because it's based on actual costs.
Before you put any credit amount into the offer, check your loan program's concession cap with your lender. These limits change based on loan type and down payment. If you ask for more than the program allows, the credit may need to be reworked before closing.
Set a Realistic Target Based on Market Conditions
Your loan type gives you the upper limit. From there, the market tells you what's likely to get accepted.
In softer markets, asking for 2% to 3% is often reasonable. In more competitive San Diego areas like Carmel Valley (92130) and University City (92122), 1% to 2% is usually the safer play.[3]
Ask your agent what seller credit amounts have been accepted in that ZIP code over the past 60 to 90 days. That's a much better benchmark than guessing.
Table: Maximum Seller Concessions by Loan Type
Your loan type sets the ceiling on what the seller can credit.
Loan Type | Max Seller Concession | What It Can Cover | Dollar Example (San Diego) |
Conventional (<10% down) | 3% of purchase price | Closing costs, prepaids, discount points | $30,000 on a $1,000,000 home |
Conventional (10%–24.99% down) | 6% of purchase price | Closing costs, prepaids, discount points | $60,000 on a $1,000,000 home |
Conventional (25%+ down) | 9% of purchase price | Closing costs, prepaids, discount points | $90,000 on a $1,000,000 home |
FHA | 6% of sales price | Closing costs, prepaids, discount points | $60,000 on a $1,000,000 home |
VA | All standard closing costs + up to 4% concessions | Prepaids, funding fee, certain debt payoffs | ~$40,000 in concessions on a $1,000,000 home |
Investment property | 2% of purchase price | Closing costs and prepaids only | $20,000 on a $1,000,000 home |
Before you submit the offer, ask your lender to run two or three credit scenarios. That gives you a clean range to work with and helps you write the request in contract language that matches the deal.
How to Write a Concession Request in Your Offer
Once you know your target, the next step is turning it into contract language that both the seller and lender can read without guessing what you mean.
Use Specific Contract Language Tied to Closing Costs and Prepaids
Vague wording like seller to pay closing costs creates too much gray area. That can slow down underwriting and lead to a last-minute addendum.
A better move is to spell out the exact credit amount and limit how it can be used. For example, you might write a seller credit of $10,000 at closing to be applied toward buyer closing costs, prepaids, and lender-approved discount points[6].
That kind of detail helps escrow apply the credit the right way. It also gives the lender what it needs for underwriting. If any credit goes unused, it stays with eligible costs. It does not come back to the buyer as cash.
Pair the Credit with a Price and Appraisal Strategy
The way your price looks on paper can shape how the seller reacts to the credit request. On a $900,000 home, $900,000 with a $15,000 credit can look stronger than $885,000 with no credit. The headline price stays higher, while the buyer gets cash relief at closing through the credit.
There’s a catch: the home still has to appraise at or above the contract price. In tighter San Diego submarkets, this kind of request tends to work best when the offer price still makes sense for appraisal. That’s why it helps to work with your agent and lender before you write the offer, so you can model a few paths that stay competitive and lender-compliant.
If the seller pushes back, or the inspection turns up problems, you may get another shot at the numbers after contingencies.
Table: Seller Credit vs. Price Reduction
Factor | Seller Credit | Price Reduction |
Purchase Price Impact | Stays the same | Reduced |
Loan Amount Impact | Generally unchanged | Lower |
Buyer Cash at Closing | Lower, because the credit can cover closing costs and prepaids | Unchanged, so the buyer still pays closing costs out of pocket |
Monthly Payment Effect | Usually minimal unless part of the credit is used for a rate buydown | Lower because the principal is reduced |
Best Fit For | Buyers who need more cash at closing | Buyers focused on long-term payment and interest savings |
Here’s the trade-off in plain English: a $10,000 price cut lowers principal and interest by about $70 per month on a 30-year fixed loan[8]. A $10,000 seller credit can cut the buyer’s cash to close by the full $10,000, but it usually leaves the monthly payment almost the same.
How to Negotiate Credits After Inspections and in Different San Diego Markets
Use Inspection Findings to Support a Repair Credit Request
After the inspection, trim your request down to the problems that actually support a credit. That usually means material defects tied to safety, livability, lender approval, or a near-term expense.
Think along the lines of roof leaks, HVAC failure, plumbing leaks, electrical hazards, water intrusion, sewer problems, mold, pest damage, or foundation issues. Cosmetic flaws and basic upkeep usually won't get much traction.
For each major issue, get one or two estimates from licensed contractors. Then use the middle estimate as your ask. When your number is backed by an estimate, it's much harder for the seller to brush it off.
Keep the request short. One sentence is enough: point to the inspection item, attach the estimate, and ask for a specific repair credit at closing.
Adjust Your Request for the Market You Are In
Once you know the repair amount, match the ask to the leverage you have in that area. In softer San Diego markets, you may have room to ask for more help. In competitive ZIP codes like 92130, 92122, 92121, and 92123, keep the request tight and tied to major defects.
Table: Seller-Completed Repairs vs. Repair Credit at Closing
Factor | Seller-Completed Repairs | Repair Credit at Closing |
Control Over Workmanship | Seller chooses the contractor and materials | Buyer selects contractors and oversees the work after closing |
Effect on Closing Timeline | Can extend closing if repairs take time or require reinspection | Generally keeps closing on schedule |
Impact on Cash to Close | No credit is applied at closing | Reduces the buyer's cash to close when applied to closing costs and prepaids |
Lender or Appraisal Complications | May satisfy lender-required repairs before closing | Must stay within loan program limits, and any excess is reduced or forfeited at closing |
Best Fit For | Single urgent items that need correction before closing, especially safety issues | Multiple repairs, older homes, or situations where the buyer wants control over quality and timing |
Repair credits make sense when the seller does not have to finish the work before closing. But if the lender requires a repair for loan approval, a credit may not solve the problem. In that case, treat the repair as a condition to close, not just a concession.
Final Steps After a Concession Is Agreed To
Once the seller says yes, get the terms into the contract right away. Put the concession in writing at once, either in the signed purchase contract or in a formal addendum. Be specific on both the dollar amount and how the money will be used. For example: "Seller agrees to credit Buyer $X toward closing costs and prepaids, subject to lender approval." Have both sides sign the updated paperwork as soon as possible. A verbal deal won't hold up in underwriting or at closing. Then send the signed addendum to your lender for review.
Your lender should then confirm that the credit still works with the loan setup you planned from the start. Ask your loan officer to confirm in writing that the credit is allowed under your loan program. [9][11][13][14]
After that, review the Closing Disclosure line by line. You'll get it at least three business days before closing. The goal is simple: make sure the credit you negotiated actually lowers your cash to close. Check that the seller credit is listed the right way, matches the contract amount, and is applied to allowed closing costs, prepaids, and lender-approved points. Also make sure your cash to close reflects that credit correctly. If anything is missing or off, contact your lender and agent immediately. [2][7][10][12][15][1]
A clean concession comes down to three things: written terms, lender approval, and accurate closing documents.
FAQs
How do I know how much seller credit to ask for?
Start with your financial goal. Maybe you want to lower upfront closing costs. Or maybe you'd rather cut your monthly mortgage payment with a rate buydown.
In the San Diego area, closing costs often land between 2% and 5% of the purchase price, so that gives you a solid baseline.
If inspection issues come up, asking for a credit instead of repairs can put you in the driver's seat. That way, you have more say over how the work gets handled and who does it.
The Richard Elias Team can help you judge what makes sense and what will still look competitive, using local market data and comparable properties.
When is a seller credit better than a price reduction?
A seller credit is often the better move if your main goal is a lower monthly mortgage payment.
Here’s why: a price cut reduces the total amount you borrow, but the month-to-month impact may be smaller than people expect. A seller-paid credit, like an interest rate buydown, can lower your payment more directly.
It can also be easier to sell to the seller. A credit may help bring in buyers while doing a better job of protecting the home’s final net proceeds.
What happens if my seller credit is higher than my closing costs?
If your seller credit is higher than your actual closing costs, the extra money usually can’t be handed to you as cash. In most cases, seller credits can only go toward allowed closing expenses.
So if the credit is more than those costs, the amount left over is usually lost. That’s why it helps to work closely with your lender and set the credit at the right level.
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