What Are Seller Concessions?
Published by Cash Flow Deals · Last updated 2026-08-05 · Published and reviewed for compliance by Camilo Palacio, a Florida Licensed Realtor
A seller concession is money the seller agrees to put toward the buyer's closing costs instead of lowering the sale price. Conventional loans cap the amount: 3% of the price when the buyer's down payment is under 10%, 6% for down payments of 10 to 25%, and 9% for down payments of 25% or more. Investment properties are capped at 2% regardless of down payment size.
| Factor | Price Reduction | Seller Concession |
|---|---|---|
| What it lowers | The purchase price itself | The buyer's cash needed at closing |
| Appraisal impact | Can shift comps for future sales nearby | Doesn't change the recorded sale price |
| Cap on the amount | None, sellers can cut price freely | Capped at 2% to 9% under Fannie Mae rules, by loan-to-value tier |
| Who it helps most | Buyers focused on the lowest possible price | Buyers short on closing cash but fine with the price |
How Concession Caps Actually Work
Fannie Mae's Interested Party Contribution rules set the ceiling. A buyer putting less than 10% down can receive concessions up to 3% of the sale price. Between 10% and 25% down, the cap rises to 6%. At 25% down or more, it goes to 9%. Investment properties are capped flat at 2%, no matter how much the buyer puts down.
Who Counts as an 'Interested Party'
Fannie Mae defines interested parties broadly: the seller, the builder or developer, the real estate agent or broker, and any of their affiliates. Contributions from all of them get added together against the same cap, so a 2% seller concession plus a 2% agent-funded credit already hits 4% combined, not 2% each separately.
Why a Cap Exists At All
The limit exists to stop a sale price from being artificially inflated to cover a large concession, which would distort the loan's real collateral value. Without a cap, a buyer and seller could agree to a higher price on paper purely to fund closing costs, and the lender would be financing more than the home is actually worth.
Concessions vs a Straight Price Cut
A price cut lowers what the buyer owes overall and can shift comps for the neighborhood. A concession keeps the sale price intact but reduces the buyer's out-of-pocket cash at closing. Sellers sometimes prefer concessions specifically because the higher recorded price supports future comps better than a straight discount does.
When Concessions Aren't Enough to Save a Deal
Some buyers ask for concessions on top of repair credits, then still walk during the inspection period. If you want a firm number without negotiating concessions and repairs on top of each other, Cash Flow Deals offers a flat fee agreed upfront, novation-based and arranged through a licensed local broker partner, with no back-and-forth over closing-cost credits.
Common questions
What's the maximum seller concession?
It depends on the buyer's down payment: up to 9% on a conventional loan for buyers putting 25% or more down, capped at 2% flat on investment properties.
Do seller concessions lower my proceeds?
Yes. They reduce net proceeds by the concession amount, even though the sale price recorded on the contract stays the same.
Can a real estate agent's commission rebate count against the cap?
Fannie Mae has clarified that customary payments to the buyer's agent do not count toward the interested party contribution maximum.
Are FHA and VA concession limits the same as conventional?
No. FHA and VA loans use their own concession limits set separately from Fannie Mae's conventional-loan caps, so check the specific loan program.
What happens if a concession exceeds the cap?
The lender has to reduce the loan amount or disallow the excess, since going over the cap violates the loan program's guidelines.
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What this means for your options
Every path to selling a house has real tradeoffs. Cash Flow Deals is built for the middle: faster than a traditional listing, more money than a cash investor.
Wait and see
Keep the property as-is and hope conditions improve. The mortgage, insurance, and upkeep keep costing money while you wait, with no set date for things to turn around.
List with a traditional agent
Standard MLS listing, typically 5-6% in commission, and a financed buyer whose deal depends on appraisal, inspection, and lender approval — any of which can fall through after weeks on market.
Sell to Cash Flow Deals
No repairs, no showings, no financing contingency on your side — our novation structure connects you with a bank-financed buyer at a price locked at signing. Usually within one business day.
See your selling options before you decide anything.