Seller Concession Examples: When Buyers Request Repairs and Closing Cost Help

Offer a credit or warranty

Wells says most of the concessions that he handles involve repairs for a major system such as the HVAC or perhaps a roof. In lieu of repairs, he’s offered a home warranty or applied an allowance toward such repairs or closing costs, which lenders often prefer. He recently sold a property where the buyer and seller agreed for the seller to apply a $5,000 credit at closing in lieu of replacing the HVAC.

A seller can open themselves to liability for tackling a major repair before closing if the buyer later determines it wasn’t done correctly. “It’s way better to offer money or some other concession than to offer repairs,” Wells says. “The buyer should like that too because then they get to choose who fixes it.

Concession example #2: Closing cost credits

As a homeowner, you know the drill: On top of the down payment for a house, your buyer will also owe closing costs at the time of purchase. These costs can be hefty — as much as 2% – 5% of the sale price. To help offset some of the upfront cost, a buyer may ask for a closing cost credit from the seller, which could go toward their:

• Escrow fees
• Title fees
• Attorney fees
• Recording fees
• Taxes
• Interest rate buydowns
• Loan origination fees

Draw buyers in with this incentive

If you’re struggling to attract buyers in a slow market, a closing cost credit could be one way to get their attention. Unlike a price reduction that’s only realized over the course of a mortgage payment schedule, closing cost credits offer buyers immediate lump-sum savings—money that they can then put toward furnishing their home or making updates prior to move-in.

According to HomeLight’s Top Agent Insights for End of Year 2024, 52% of agents agree offering flexible financing incentives, like credits, can help sell homes in a market with high interest rates and cautious buyers.

Know the limits

While some concession requests may test your patience, there are also restrictions on concessions depending on the type of loan a buyer obtains, the type of residence that the loan finances (whether it’s a primary, secondary, or investment property), and the size of the buyer’s down payment.

Fannie Mae, for instance, caps closing cost credits — also called “interested party contributions“ — for conventional loans like so:

• 3% max if the buyer puts less than 10% down (on a primary or secondary home)
• 6% max if the buyer puts down 10% – 25% (on a primary or secondary home)
• 9% max if the buyer puts down 25% or more (on a primary or secondary home — however, note that this would be a very generous concession)
• 2% for investment properties with down payments of any amount

Any seller costs that exceed these limits would require a corresponding reduction in the loan amount, dollar for dollar. These are the concession limits for each type of loan:

• FHA Loans: 6% of the sale price
• USDA Loans: 6% of the loan amount
• VA Loans: 4% of the loan amount

Concession example #3: Non-realty items of value

Buyers may also make requests for concessions in the form of personal property, also known as non-realty items of value, which are not traditionally included with the sale of the home.

Often, you’ll negotiate these items apart from the home sale. Teresa Cowart, a top-selling agent in Savannah, Georgia, has written separate bills of sale for concessions, such as furniture, because lenders often want a contract to stick to the parameters of selling the house and property.

“Lenders don’t like when you put all that stuff in there because then an appraiser has to find some way to put [a] value on that,” she says.

Some common requests include the dining-room chandelier, the washer and dryer, potted plants, draperies, and the wine fridge, but buyers have been known to make some strange requests, including:

• Livestock: “I had to write in 23 chickens on a deal: ‘Domestic poultry,’” Wells says. The seller had a chicken coop, and the buyer wanted the chickens, too. “They got the chickens, so that worked out.”
• Sporting or lawn equipment: Buyers sometimes take an interest in a boat or other equipment that the sellers intend to take with them when they leave. “We’ve had people ask for all kinds of stuff,” Cowart says. “I don’t think people sometimes realize the value of what they’re asking for, either. ‘Can you leave that tractor?’ Well, that tractor is $47,000.”
• Fruits and vegetables: Depending on where you live and if you have fruit trees or agricultural property, you and your agent might have to work out a concession for emblements or crops. In a nutshell, this allows whoever grew the crops to return to pick the fruit or vegetables produced on the property they’ve sold. “It really came up for farmers when they would sell land that they would still have access to their crops,” Wells says.
• Custom fixtures: Cowart once represented a seller whose husband had a custom-built pergola for their home. The sellers took the pergola when they moved out, but the buyers expected it to be there. Cowart says she offered to buy materials and pay the seller to build the buyers another one, or at least pay the sellers to return it. “I said, ‘Help me help you.’ … There was too much animosity over a pergola.” The sellers realized that the pergola had the wrong dimensions for their new place and returned it after all.
• Family photographs: Sellers of one historic home built in 1891 were surprised when one set of potential buyers asked them to include two framed photos from the mantle in the sale because they liked their historic look. “They were actually family photos,” Cowart says. “The sellers were like, ‘They are historic. They’re our great-grandpa. And we’re not leaving them.’”

Seller concession strategy

While it’s fine to tell your agent which specific items of personal property are off-limits during the sale, it’s best to let your agent handle any concessions and negotiations. Emotions on either side can spoil any incentives someone is willing to make.

Know when to walk away from concession negotiations

Samson recalls how one client selling a $1.5 million house didn’t want the furniture from the basement recreation area, including a pool table. The seller happened to meet the prospective buyer during the home inspection and told the buyer that he could have the basement furniture, too.

After the inspection, the buyer requested $12,000 worth of repairs. Samson offered the basement furniture as a concession, but the buyer countered that they already had that as part of the deal.

“That was my bargaining chip,” Samson says. “When the seller found out that he had been gracious enough to give him all the basement furniture and the buyer now wanted $12,000 over and above that, the seller refused to sell the house to that buyer.”

List now, negotiate the drapes later

Sellers tend to want to present concessions upfront, such as offering a $2,000 carpet allowance when advertising the home, Wells says. But that gives away money without attracting any new buyers. He advises pricing your house correctly from the outset. The more beneficial your price bracket, the less likely you’ll feel compelled to offer concessions to bring buyers to your door.

Once you have an interested buyer, then you can negotiate repairs and anything else that proves enticing. “Absolutely throw in anything that the seller wants to sell. The drapes, the pool furniture, this lamp that the buyer is intrigued by in lieu of doing repairs,” Wells says.

Having a contract tends to make those negotiations much smoother. “Once a buyer gets under contract, I know that’s their favorite house; it’s not their 15th favorite house. Almost always, the buyer never backs out because they love the house.”

Sell ‘as is’ but be flexible with buyer requests

“A lot of sellers will say, ‘I’m selling the property as is,’ and we get down the road, and they’re open to the idea of offering some concessions,” Wells shares.

“I do my best upfront to sell a property as is if I’m the listing agent, and prepping them for the buyer to ask for concessions. The buyers will ask. It doesn’t hurt them to ask. But we can say ‘no.’”

Ready to sell your home?

Seller concessions are incentives that help close the deal. When used strategically, they can attract buyers and speed up the sale without costing the seller much.

By offering the right incentives at the right time, you can maintain the upper hand at the negotiating table. To handle negotiations more strategically, partner with a proven agent who’s experienced in getting the best deal.

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