Seller concessions are closing costs that the seller agrees to pay, which can make a home more affordable for the buyer and help the seller make their home more attractive to potential buyers, especially in a buyers market. Seller concessions can be a way to lighten the buyers load and encourage the buyer to make an offer, especially in a buyers market. They can also help buyers who dont have the cash on hand to cover all their closing costs, and offset some of those costs to make the home more affordable.

Seller concessions can cover a portion of the buyers closing costs and prepaid expenses, such as the lender origination fee or appraisal fee, and can also cover repairs and upgrades to the home. However, its important to note that with seller concessions, the buyer is essentially adding the closing costs the seller has agreed to pay to their mortgage, which will increase the interest the buyer pays on the loan.

Agreeing to concessions can be good for the seller in some circumstances, such as helping the seller get their home off the market faster, but asking for seller concessions might make the buyer a less-appealing buyer. In a sellers market where prices are skyrocketing and supply is limited, the seller will have multiple bids and is less likely to cave to concessions.

Seller concessions come out of the sellers profit for the sale, so they are not directly paid by the seller out of pocket. They are considered to be sales expenses and are therefore tax deductible.