How to Get Sellers to Pay Your Closing Costs

A seller credit can knock thousands off your cash-to-close — or buy down your mortgage rate so your monthly payment shrinks for years. On an FHA loan a seller can contribute up to 6% of the sale price toward your costs; on a conventional loan the cap ranges from 3% to 9% depending on your down payment (LRG Realty). In a market where the 30-year fixed rate sat near 7.3% in late 2026, that concession is often worth more than a price cut. Here's how to ask for it, what each loan program allows, and when the money is better spent buying down your rate instead.

What exactly is a seller concession?

A seller concession is money the seller agrees to pay toward your costs at closing, written into the purchase contract. It is not a discount off the listing price — the sale price stays the same and the seller's contribution is disclosed on the settlement statement as a credit toward your fees (Schaff Group).

Those funds typically cover closing costs such as loan origination charges, title insurance, escrow fees, prepaid taxes and homeowners insurance, appraisal costs, and discount points. What they cannot cover on most loans is your down payment, your minimum borrower contribution, or your required cash reserves — those stay your responsibility under every major program (Schaff Group).

How much can sellers contribute by loan type?

The cap on a seller concession is set by your loan program — not by the seller, the agent, or the price you negotiate. Conventional loans tie the limit to your down payment, while FHA, VA, and USDA loans apply a flat percentage of the sale price. Get this wrong and an over-limit credit can be reclassified as a sales concession, reducing the amount you can borrow or stalling underwriting (LRG Realty).

Here are the standard limits for 2026:

On an FHA loan, for example, the 6% cap on a $400,000 home means the seller could contribute up to $24,000 toward your closing costs, prepaids, discount points, and the upfront mortgage insurance premium (Heart Mortgage). The conventional percentage is calculated on the lesser of the sale price or the appraised value, so a low appraisal can shrink the dollar amount you're allowed to request (LRG Realty).

How do you ask for a concession without losing the house?

Three tactics keep a concession offer competitive:

1. Price it in, don't discount it. Offer the seller their full asking price and ask for closing-cost assistance on top. Sellers who won't cut price will often fund a concession because it keeps their net sales price high on the record.

2. Lead with a pre-approval. A fully underwritten pre-approval tells the seller your financing won't collapse at closing, which makes a concession request feel low-risk.

3. Anchor to the appraisal. Because the concession is capped by the lesser of price or appraised value, ask early — before a low appraisal shrinks what you're allowed to request (LRG Realty).

The window to negotiate concessions is before you write the offer — not after. A credit buried in a counteroffer reads as a last-minute ask and gives a seller a reason to walk; a credit built into your initial offer signals a serious, fully thought-through bid (Schaff Group). In a competitive market, the stronger your offer around the concession, the more likely the seller says yes.

The most common mistake buyers make is asking for a round dollar amount that doesn't match their actual costs. Ask for a credit equal to your itemized closing costs instead, so the seller sees a specific, justified number rather than a grab. That number is also the one your lender will accept, since a credit usually can't exceed your real allowable costs (Schaff Group).

Why do sellers accept this? A price cut costs the seller the full amount out of their net proceeds, while a concession of similar size often nets them more once commission and taxes are accounted for — which is why a seller who refuses to drop the price will frequently fund a credit instead.

Why is a rate buy-down often better than a price cut?

A dollar of concession spent on discount points usually outperforms a dollar shaved off the sale price. Discount points — an upfront fee paid to lower your interest rate — reduce the monthly payment that follows you for the life of the loan, whereas a price reduction only trims the one-time cost at closing (Heart Mortgage). For a buyer who plans to stay put, the recurring savings compound quickly.

Consider the difference on a $400,000 home. A $24,000 FHA concession can cover your closing costs entirely, or a portion can buy down the rate so your principal-and-interest payment drops each month. That recurring relief is why the buy-down has become the favored 2026 strategy over a straight price reduction (LRG Realty).

The right choice depends on your cash situation and how long you'll own the home:

1. Tight on cash to close — use the credit for closing costs and prepaids to lower your upfront bill.

2. Comfortable at closing, plan to stay 5+ years — spend it on discount points to buy down the rate for long-term monthly savings.

3. Expect to move within a few years — skip the buy-down; the points won't pay back before you sell, so cover your costs instead.

Builders are already selling this trade-off, offering rate buy-downs and closing-cost assistance to keep new-home payments competitive as buyers gain negotiating leverage (NAR).

Which closing costs can the seller actually cover?

Not every dollar at closing is eligible for a seller concession — the exact list depends on your loan program, and getting it wrong can void a credit. On a conventional loan, financing concessions can pay your closing costs and up to 12 months of prepaid HOA dues collected at closing, but they cannot touch your down payment, minimum borrower contribution, or financial reserves (Schaff Group).

FHA is broader: the 6% cap covers origination fees, closing costs, prepaid items, discount points, permanent and temporary rate buy-downs, mortgage interest payments, and the upfront mortgage insurance premium (LRG Realty). VA is the most generous of all — the seller can pay your normal closing costs with no percentage cap, and only a separate set of items (the funding fee, prepaid taxes, debt payoffs) counts against the 4% limit (Heart Mortgage).

What should you do before you make an offer?

Get an itemized cost estimate from your lender before you negotiate, so you know the exact number to request and can verify it fits your loan's cap. A credit that exceeds your actual costs is reclassified as a sales concession, which can reduce the amount you're approved to borrow or trigger a dollar-for-dollar cut to the sale price for underwriting (Heart Mortgage). Review the credit before the contract is written — waiting until after signing risks a revision or a closing delay.

Seller concessions are one of the few negotiating tools that put real money back in your pocket without lowering the price or the seller's take. Know your cap, ask for a specific itemized number in your first offer, and decide whether that credit serves you better at closing or spread across your monthly payment for years to come.