What Sellers Need to Know About Buyer Concessions in Today’s Market
If you’re planning to sell your home, you’ve probably heard the term buyer concessions. But what does it really mean? And more importantly, should you offer them in today’s market?
Selling a home today is different from how it was a few years ago. Mortgage rates are higher, buyers are more cautious, and homes are staying on the market a bit longer. Because of this, many buyers are asking sellers to help cover some of their costs — and that’s where concessions come in.
In this blog, we’ll explain what buyer concessions are, how they work, why buyers ask for them, and how offering concessions could help (or hurt) your sale.
1. What Are Buyer Concessions?
Buyer concessions are costs that the seller agrees to pay to help the buyer close the deal. These are usually expenses that are normally the buyer’s responsibility.
Common concessions include:
- Covering closing costs (like loan fees, title fees, and insurance)
- Buying down the interest rate (called mortgage rate buy-down)
- Covering inspection or repair costs
- Paying for home warranties
Think of it like giving the buyer a small financial “gift” to make the home more affordable.
2. Why Do Buyers Ask for Concessions?
In today’s market, many buyers are feeling stretched thin. High home prices and rising mortgage rates have made buying a home more expensive. Even if a buyer qualifies for a loan, they might still be short on cash for closing costs.
Here are a few reasons buyers ask for help:
- They’re already using most of their savings for the down payment
- They need help affording repairs after the home inspection
- They want a lower monthly payment and ask for a rate buy-down
- They want to reduce their out-of-pocket costs at closing
For buyers, even a few thousand dollars in help can make a big difference.
3. Are Concessions Common in 2025?
Yes, buyer concessions are becoming more common — especially in markets where homes aren’t selling quickly. In competitive markets a few years ago, sellers had the upper hand. But now, things have shifted.
Today’s buyers are more careful. They’re shopping around, negotiating harder, and often walking away if they don’t get what they want. This gives sellers more reason to offer incentives like concessions to attract offers.
4. How Much Are Buyers Asking For?
Concessions can vary, but they usually range between 2% to 3% of the home’s purchase price.
For example:
- On a $600,000 home, a 3% concession would be $18,000.
- On a $400,000 home, a 2% concession would be $8,000.
That money can be used to cover closing costs, buy down interest rates, or cover other fees. The final number depends on your local market and how badly the buyer wants help.
5. Do Concessions Hurt Your Bottom Line?
Yes and no.
When you offer a concession, you’re giving up some of the money you would have received at closing. But on the flip side, you might:
- Sell your home faster
- Attract more offers
- Avoid a price reduction
- Prevent the deal from falling through after inspection
So, while it might feel like a loss, it could actually save you time and money in the long run.
Here’s an example:
Without concessions:
- List price: $1,000,000
- Buyer walks away due to closing costs
- Home sits for 30 more days
- You lower the price to $950,000
With concessions:
- Buyer offers full price: $1,000,000
- You give $20,000 toward closing costs
- Net: $980,000
- Home sells faster, no price drop needed
6. How to Handle Concessions as a Seller
If a buyer asks for concessions, don’t panic. It’s just part of the negotiation process. Here’s how to handle it smartly:
a. Review the Offer Carefully
See how much they’re offering for the home and how much they’re asking in concessions. Sometimes, buyers will offer your full asking price — but only if you help them with costs.
b. Talk to Your Agent
A good real estate agent will help you decide what’s fair. They’ll check what other sellers are offering and help you negotiate a deal that works for both sides.
c. Counter If Needed
If you’re not happy with the request, you can always counter. You can offer less, or suggest a different way to help (like doing repairs instead of giving money).
d. Keep the Big Picture in Mind
Sometimes it’s better to give a little to get the deal done. If your home has been sitting for weeks, a small concession could help move things forward.
7. What Are Mortgage Rate Buy-Downs?
One popular type of concession right now is the mortgage rate buy-down. This means the seller pays extra upfront so the buyer can get a lower mortgage interest rate for the first few years (or even for the life of the loan).
There are a few types:
- 2-1 Buy-Down: Rate is 2% lower the first year, 1% lower the second year, and goes back to normal in year 3.
- Permanent Buy-Down: You pay points to permanently lower the interest rate.
This is attractive to buyers because it lowers their monthly payment. And for sellers, it’s often cheaper than lowering the price of the home.
8. How Concessions Affect Appraisals and Loans
There are rules around concessions, especially when buyers are using a loan.
- Most lenders cap seller concessions at 3% to 6% of the home’s price, depending on the loan type and down payment.
- If you offer too much, it could delay the loan or even kill the deal.
- Also, the home still has to appraise at the agreed price, even with concessions included.
That’s why it’s smart to work closely with your agent and the buyer’s lender when talking about concessions.
9. Should You Offer Concessions Upfront?
Sometimes yes, especially if:
- Your home has been sitting on the market
- Other homes nearby are offering concessions
- You need to sell quickly
- Your home needs repairs or updates
You can advertise this in the listing by saying:
- “Seller will contribute up to $10,000 toward buyer’s closing costs!”
- “Seller offering rate buy-down!”
This can make your home stand out and attract more buyers.
But if your home is in perfect shape, priced right, and in a hot area, you might not need to offer anything. It depends on the market and your goals.
10. Final Tips for Sellers
Here are a few last things to keep in mind:
- Stay flexible: Every deal is different. Be open to negotiation.
- Price your home correctly: If you know you’ll offer concessions, factor that into your asking price.
- Use a trusted real estate agent: They’ll help guide you through all of this.
- Watch the market: If homes are sitting longer or prices are dropping, concessions may be your best tool to compete.
Conclusion
Buyer concessions are a useful tool in today’s real estate market. They can help you close a deal, make your home more attractive, and avoid long waits or price drops.
While it may feel like you’re giving up money, think of it as a smart strategy. In many cases, offering concessions can actually help you walk away with more — not less — in your pocket.
Talk to your agent, understand the market in your area, and be ready to work with buyers. With the right approach, you can sell your home successfully and move on to your next chapter.
Rana Real Estate Group is a trusted name in real estate, offering expert assistance for all your property needs. Whether you’re buying, selling, or investing, their experienced team provides tailored solutions and personalized service to help you achieve your goals. With a focus on integrity and transparency, they guide you through every step of the process, ensuring a smooth and successful transaction. Whether you’re a beginner or seasoned in real estate, Rana Real Estate Group is here to support you every step of the way.
Rana Khanjani, MBA
Specializing in Commercial, Residential, and Land