In real estate, a concession is a benefit or discount offered by the seller to the buyer to help sell a home and close a deal. Concessions can be specified during negotiations and can take two primary forms: financing concessions and sales concessions.

Financing concessions are closing costs that the seller agrees to pay, which can help the buyer cover some of the upfront costs associated with buying a home. Examples of closing costs that a seller can offer to cover as a concession include loan origination fees, appraisal fees, and title insurance fees.

Sales concessions, on the other hand, refer to non-realty items of value that the seller includes to incentivize the buyer to purchase their home. Examples of sales concessions include providing a decorating allowance, including furniture or other loose home items such as window coverings, appliances, or a pool table with the sale.

Seller concessions can help both the buyer and the seller. For the seller, offering concessions can make their home more attractive to potential buyers, especially in a buyer’s market. Seller concessions also help buyers who don’t have the cash on hand to cover all their closing costs. However, its important to note that in a sellers market, where prices are high and supply is limited, the seller may have multiple bids and be less likely to offer concessions.

In summary, concessions in real estate are benefits or discounts offered by the seller to the buyer to help sell a home and close a deal. They can take the form of financing concessions, which cover closing costs, or sales concessions, which refer to non-realty items of value that the seller includes to incentivize the buyer to purchase their home.