Complete Seller Concessions Guide
Written by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Seller concessions are costs the seller agrees to pay on the buyer's behalf, usually toward closing costs. They are a powerful tool for reducing the cash you need to buy a home in Florida.
This guide explains how concessions work, the limits by loan type, and how to negotiate them. Mortgage Capital, NMLS# 1859012, helps Florida buyers use seller concessions effectively.
What seller concessions are
A seller concession is money the seller contributes toward your closing costs, prepaid taxes and insurance, or a rate buydown. It does not go to your down payment, but it lowers your cash to close.
Concessions are negotiated into the purchase contract, often in exchange for a slightly higher price.
Limits by loan type
Each loan caps concessions. FHA allows up to 6% of the price, VA allows up to 4% plus closing costs, USDA up to 6%, and conventional ranges from 3% to 9% depending on the down payment and occupancy.
You cannot receive more than your actual closing costs, so concessions are capped by both the program and the costs themselves.
How to negotiate concessions
In a buyer-friendly market, ask the seller to cover part of your closing costs. Sometimes offering closer to the asking price in exchange for concessions nets you the same deal with less cash at closing.
Concessions are especially useful when you have enough for the down payment but are tight on closing cash.
Concessions for a rate buydown
Seller concessions can fund a temporary or permanent rate buydown, lowering your payment. A seller-paid buydown can be more valuable to you than the same money taken off the price.
This is a smart way to use a motivated seller's flexibility in a higher-rate environment.
Using concessions in Florida
With Florida's closing costs, including documentary stamp taxes and title work, concessions can meaningfully cut your cash to close. We structure the offer so the concession fits your loan's limits.
Done right, concessions get you into the home with less money out of pocket.
Complete Seller Concessions Guide: step by step
Frequently asked questions
What are seller concessions?
Costs the seller agrees to pay on your behalf, usually toward closing costs, prepaids, or a rate buydown, lowering your cash to close.
How much can a seller contribute?
It varies by loan: FHA and USDA up to 6%, VA up to 4% plus costs, and conventional 3% to 9% based on down payment and occupancy.
Can concessions go toward my down payment?
No. Concessions apply to closing costs, prepaids, and rate buydowns, not the down payment itself.
How do I get seller concessions?
Negotiate them into the purchase contract, sometimes by offering closer to the asking price in exchange.
Can concessions pay for a rate buydown?
Yes. A seller-paid buydown lowers your rate and can be more valuable than the same money off the price.
Is there a limit on concessions?
Yes, both the loan program's cap and your actual closing costs limit how much you can receive.
When are concessions most useful?
When you have the down payment but are tight on closing cash, or when you want a seller-funded rate buydown.
Do concessions appear on the Closing Disclosure?
Yes. The seller credit is itemized on your Closing Disclosure, reducing your cash to close.