How to Ask the Seller to Pay Your Closing Costs (and Actually Get It)

Closing costs catch most first-time buyers off guard. The down payment gets all the attention, but by the time you receive your Closing Disclosure, you may be looking at an additional $8,000 to $14,000 that needs to come from somewhere. One of the most underused tools available to buyers is asking the seller to pay a portion of those costs — a seller concession.

This is not charity. It is a negotiating lever that costs the seller money but often costs you nothing extra, and it can be the difference between closing and walking away.

What Are Seller Concessions and How Do They Work?

Seller concessions — also called seller contributions or seller-paid closing costs — are an agreement where the seller agrees to credit the buyer a set dollar amount at closing to offset the buyer's fees. The money does not change hands directly. Instead, it shows up as a credit on the Closing Disclosure, reducing the cash the buyer must bring to the table.

Yes, seller concessions and closing cost credits are the same thing. If a listing says "seller offers $5,000 towards buyer's closing costs," that is a concession. If your offer asks for "$6,000 in seller-paid recurring and non-recurring closing costs," that is also a concession.

The word "recurring" refers to prepaid items like insurance premiums and property tax escrow. "Non-recurring" refers to one-time fees like the origination charge, title insurance, and appraisal. You can ask for both.

When the seller pays closing costs out of proceeds, the mechanics are straightforward: the seller's net proceeds at the closing table are reduced by the credit amount. If a home sells for $400,000 and the seller agrees to a $7,000 concession, the seller walks away with $7,000 less. From the buyer's perspective, you pay $400,000 for the house but bring $7,000 less cash to closing.

How Much Can the Seller Contribute?

For conventional conforming loans, the cap is calculated using the lower of the purchase price or appraised value; other programs use their own rules. Going over an applicable limit can make the excess unusable or require a loan or price adjustment.

Conventional conforming primary and second homes:

• More than 90% LTV: seller can contribute up to 3%
• 75.01%–90% LTV: seller can contribute up to 6%
• 75% LTV or less: seller can contribute up to 9%

FHA loans: Seller can contribute up to 6% of the sales price.

VA loans: Seller-paid credits for the buyer's closing costs are not capped, but seller concessions are capped at 4% of the home's reasonable value. Concessions can include items such as the VA funding fee, debt payoff, or prepaid insurance; ordinary closing costs and normal discount points are not counted toward that 4% cap.

USDA loans: Seller can contribute up to 6% of the sales price.

These caps exist because lenders are concerned about inflated purchase prices. If a home is worth $380,000 but a buyer offers $400,000 with a $20,000 seller concession, the lender's collateral is overstated. The cap prevents this.

What Seller Concessions Appear on the Closing Disclosure

Seller-paid fees appear in the paid-by-others and credit portions of the Closing Disclosure and are reflected in the Page 3 "Calculating Cash to Close" table, which subtracts the seller's contribution.

Seller-paid credits on the Closing Disclosure can cover many allowable buyer costs: origination charges, appraisal fees, title insurance, recording fees, prepaid interest, insurance premiums, and property tax escrow. The one restriction is that they generally cannot be applied as additional down payment — they offset fees only.

When to Ask for Seller Concessions

The best time to request a seller contribution is in a buyer's market, on a property that has been sitting, or when you are bringing a full-price or above-list-price offer. Asking for $6,000 in concessions while also offering $20,000 below asking price is a difficult negotiation. Asking for $6,000 in concessions at full price is often accepted because the seller still nets close to their target.

A direct approach works well: "We are offering $X (full list price) and requesting a $Y credit toward recurring and non-recurring closing costs to be applied at settlement." This language is familiar to sellers' agents and does not set off alarm bells.

In competitive markets, concession requests can cost you the deal. Know your market before structuring an offer this way. A good buyer's agent will advise you on current seller sentiment.

When the Seller Refuses — Other Ways to Cover Closing Costs

If seller concessions are off the table, consider:

Lender credits: You accept a slightly higher interest rate in exchange for cash toward closing. This trades ongoing cost (more interest each month) for upfront savings. It makes sense if you plan to sell or refinance within five years.

Down payment assistance programs: Many state and local programs offer grants or forgivable loans specifically for closing costs. First-time buyer programs in Florida, Iowa, Massachusetts, and elsewhere often layer a closing cost grant on top of a down payment loan.

Rolling costs into the loan: On some loan types, certain fees can be financed, though this is limited and not available for all fees.

Negotiating with your lender directly: Section A fees (origination charges) are the most negotiable items on your Loan Estimate. Shopping two or three lenders and asking each to beat the other's terms is the most direct way to reduce the lender's portion of your closing costs.

Understanding every line on your Closing Disclosure before you sit at the table is how you catch errors, validate concessions, and walk away without surprises. The Closing Cost Guide breaks down every fee category on the Closing Disclosure — what each one means, which ones are fixed, and which ones you can push back on before you sign.