Maximize Home Buying with Conventional Loan Seller Concessions

Can the seller pay your closing costs?

Home buyers looking at their new homeSeller concessions are a frequent and valuable strategy for home buyers.

An agreement between the buyer and the seller is known as a seller concession.
Seller concessions can lower or eliminate the buyer's out-of-pocket expenses at the closing.

What are Conventional Loan Seller Concessions?

Conventional loan seller concessions are concessions that a seller may offer to a buyer when purchasing a home. This concession is essentially an agreement between the seller and the buyer; it states that the seller agrees to pay some of the closing costs associated with the buyer's mortgage. In return, the buyer can ask for seller concessions, which can help to reduce their out-of-pocket expenses when buying a home.

The size of the seller's concession varies depending on whether it's a VA, USDA, or conventional loan. Still, in all cases, if the seller agrees to pay some of the closing costs, it can make purchasing a home much easier for buyers. Asking for concessions from sellers is entirely reasonable and can benefit both parties involved, so buyers should not hesitate to offer concessions if they need them.

How do Conventional Loan Seller Concessions Work?

Seller concessions are a great way for home buyers to help reduce the upfront cost of purchasing a new home. If you're considering asking the seller to agree to concessions, it is essential to understand how they work depending on the loan type.

For FHA loans, the seller can agree to pay some of the costs associated with the loan amount, but there are limits. Likewise, sellers may agree to pay certain fees regarding conventional loans, but there are also limits. It is best for home buyers to speak to a loan officer to determine the size of the seller's concession before submitting an offer to the seller. Depending on the housing market and purchase price, sellers may agree to pay for repairs or other costs that could help reduce a home buyer's closing costs. It is essential to be aware of seller concession limits so that you don't ask for too much and end up costing yourself more money in the long run.

The Advantages of Utilizing Conventional Loan Seller Concessions

Seller concessions can help home buyers purchase a home that's more accessible and more affordable. Benefits may include the seller paying for the buyer's closing costs, the real estate agent's commission (if necessary), or other closing fees associated with the purchase. The seller concession for conventional loans varies based on the down payment amount.

Seller-paid concessions can also sweeten the deal, making it easier to negotiate on price and terms. Depending on the type of loan and home inspector's report, seller concessions can help to reduce out-of-pocket expenses when buying a home. In some cases, seller concessions can even help to offset major repairs that must be made before closing.

Maximizing Your Savings with Conventional Loan Seller Concessions

When considering buying a home, maximizing your savings with a seller concession can reduce the overall purchase cost. A real estate agent can help you understand and negotiate the terms of the seller’s concession, including paying for closing costs or repairs identified by a home inspector. 

Fannie Mae limits also apply to how much a seller can contribute in seller concessions, so it is essential to discuss this with your agent and lender to ensure that you get the best deal possible. Seller concessions allow the seller to pay certain costs associated with purchasing your home, such as closing costs or prepaid expenses.

It is essential to understand these limitations when negotiating seller concessions to get the best deal possible. In some cases, a seller can pay all or part of your closing costs – make sure you find out what limits on seller concessions exist to get the most out of your purchase.

Reducing Your Mortgage Costs with Conventional Loan Seller Concessions

Selling concessions may be the way to go when reducing your mortgage costs with a conventional loan. Seller concessions are closing fees that can be negotiated between the buyer and seller.

If the seller is eager to sell, they may be willing to make concessions to get the sale closed. This could involve allowing you to pay a lower down payment or waiving specific fees. USDA loans are an example of this type of loan because sellers are more likely to offer concessions for these types of loans. 

When negotiating for such a loan, always ensure you understand what kind of seller concessions are being delivered and how much it will cost you at closing. Closing costs can add up quickly, so make sure you know what you’re getting into before signing any documents. In some cases, getting the seller to work with you on a reasonable set of seller concessions could mean significant savings in both upfront and long-term costs associated with your mortgage.

Making Your Home Buying Experience More Affordable with Conventional Loan Seller Concessions

Making your home-buying experience more affordable with a seller concession can help you pay closing costs associated with buying a home.

 Costs are typically paid by the seller, who can offer concessions to pay all or some of the buyer’s closing costs in exchange for a higher purchase price. This allows the buyer to pay less out-of-pocket, making the entire process much more manageable.

For example, if a seller offers 4% of the sale price to cover your closing costs, that means if you are purchasing a $200,000 home, they would be able to pay up to $8,000 of your closing costs. Presenting examples like this helps illustrate how seller concessions can help make your home-buying experience more affordable and easy.

The Benefits of a Higher Down Payment in Conventional Loan Transactions

Making a larger down payment with a conventional loan can provide many benefits. When you make a larger down payment on a property, you can reduce the seller concession required to approve the loan. In a buyer’s market, sellers may be more willing to offer concessions if they feel it is necessary to help them close a deal.

By increasing your down payment, you can reduce the costs that the seller needs to cover and provide them with additional benefits from the sale. This allows them to accept offers even if they feel it is not ideal, making it easier for buyers to find their dream home in a competitive market. Additionally, making a larger down payment will reduce your mortgage interest and save you money.

Why You Should Consider Conventional Loan Seller Concessions

When considering seller concession with your conventional loan, you must remember the amount of seller concession you can receive.

This can be negotiated when buying or selling a home, and the benefits from the seller could help pay for closing costs.

When negotiating concessions, you should ask the seller for the maximum amount they can pay towards these costs and ensure they cannot pay more than what is allowed.

Seller concessions may be a great way to reduce out-of-pocket costs and could help you save money on closing costs. If you want to save money when buying or selling a home, consider asking for seller concessions as part of your negotiations.

Consulting an Expert: Making the Most of Conventional Loan Seller Concessions

When getting the most out of a seller's concession, consulting an expert is often the best way. Asking the seller for concessions can significantly benefit the buyer as it can help pay all or part of their closing costs. The buyer may pay a higher price for the home in exchange for these concessions.

The seller can't pay more than their share of the closing costs that their lender determines, so it's important to ensure that you understand what those costs are before making any decisions and paying them yourself.

 You could save a lot of money if you can negotiate with the seller and get them to agree to pay some or all of your closing costs. Research and talk to a lender to ensure you get the best deal possible and make the most of conventional loan seller concessions.

A Better Way to Buy a Home: Conventional Loan Seller Concessions

A conventional loan with a seller concession is a great way to buy a home. It allows you to purchase a home for a lower price by having the seller cover part of the cost.

Buying a home can be expensive, so real estate agents recommend that their clients consider this option when buying their dream home. A seller concession can help you save money and get into the perfect home for your needs.

Maximum Seller Concessions for a Conventional Loan

The following are the maximum allowable percentages for seller concessions:

Occupancy Type Down payment Seller assistance
Principal residence or second home 3% to 9.99% 3%
  10% – 24.99% 6%
25% or greater 9%
Investment property all percentages 2%

To qualify for conventional loans, borrowers must meet the requirements of Fannie Mae and Freddie Mac (Freddie Mac).

Interest parties such as the property seller, the real estate agent/broker, or an affiliate that stands to benefit from a property's sale might request concessions from Fannie Mae and Freddie Mac.

Lenders and employers are not considered interested parties in a sales transaction unless they are the property seller or have a relationship to the property seller or another transaction party.


In conclusion, a conventional loan seller concession can be a beneficial option for home buyers who want to buy their dream home at an affordable price. It may be advantageous for both the buyer and seller, as the buyer would have less money to pay out of pocket while the seller can still receive a fair market value. However, it is important to ensure that the amount of concessions received is within Fannie Mae or Freddie Mac’s requirements.

Interested Party Contributions
Types of Interested Party Contributions