In many real estate transactions, buyers are surprised to learn that they can ask the seller to help cover some of their costs at closing. This is called a Seller’s Contribution (also known as a seller credit or concession). Instead of lowering the purchase price, the seller agrees to contribute a set dollar amount or percentage toward the buyer’s closing costs.
Why does this matter? Because closing costs typically run around 6% of the purchase price, and on top of that, you still need your down payment. A seller contribution can ease that burden by reducing the amount of cash you need to bring on closing day. For first-time buyers, this can make the difference between “almost ready” and “ready to close with confidence.”
So, what can seller contributions be used for? Here are the most common areas:
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Lender fees: underwriting, processing, and other loan origination costs.
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Prepaid expenses: homeowners insurance, mortgage insurance, and property tax escrows.
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Title and settlement charges: title search, title insurance, and settlement agent fees.
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Discount points: in some cases, contributions can help buy down your interest rate.
It’s important to know that seller contributions cannot be used for your down payment—that still needs to come from you. But they can dramatically reduce your out-of-pocket closing costs, making homeownership more affordable.
When I represent buyers, I make sure this option is always on the table. Depending on the market and negotiation strength, we can position your offer to include seller contributions without weakening your buying power. My role is to help you secure not only the home you want but also the financial terms that keep you comfortable after closing.