What Are Seller Concessions and How Can You Use Them Strategically?

What are seller concessions, and how can you use them to your advantage in today’s market — especially with new construction and lender limits in mind?

Seller concessions are incentives a seller agrees to offer that help reduce a buyer’s out-of-pocket costs. Used wisely, these concessions can make your offer more attractive or help close the deal on terms that benefit everyone involved — including when you're buying or selling in communities like Alliance Texas, Haslet, or Justin.

What Exactly Are Seller Concessions?

Seller concessions are financial contributions made by the seller toward the buyer's closing costs, prepaid expenses, or other transaction-related costs. These could include:

• Loan origination fees
• Title insurance
• Property taxes
• Attorney fees
• Interest rate buydowns

In many cases, these concessions help buyers afford homes they might otherwise pass on. For sellers, offering concessions can expand the pool of qualified buyers and help close faster, especially in competitive or higher-priced markets.

How Buyers Can Use Seller Concessions Strategically

If you're a buyer, especially in areas like Haslet or Justin, Texas, where new construction is booming, concessions can be the key to affordability. Here’s how:

1. Offset Closing Costs: Instead of coming up with thousands in additional cash at closing, you can ask the seller to cover part (or all) of these expenses.
2. Buy Down the Interest Rate: Some buyers use concessions to pay for a temporary or permanent rate buydown, resulting in a lower monthly payment.
3. Get Into New Construction With Less Cash: Builders often offer their own incentives, but you can negotiate even more — such as upgrades, extended warranties, or additional closing cost assistance.

Don’t Forget the Lender Cap

Here’s where strategy matters: most lenders cap the amount of seller concessions you can use based on your loan type and down payment. For example:

• Conventional loans: 3% to 9% cap depending on down payment
• FHA loans: up to 6%
• VA loans: up to 4%

If you negotiate concessions that exceed this cap, the excess won’t be applied — meaning you leave money on the table. The key is to work closely with your agent and lender to structure the offer effectively.

What This Means for Sellers

If you’re listing your home in the Alliance Texas or Haslet area, offering concessions can give your property an edge — especially if:

• You want to attract first-time or FHA buyers
• Your home has been sitting on the market
• You’re competing with builder incentives in nearby new construction

Just remember: seller concessions reduce your net proceeds, so they should be balanced against your pricing strategy.

Final Thoughts

Whether you're buying or selling in places like Haslet, Justin, or Alliance Texas, seller concessions can be a smart way to create win-win negotiations. The key is understanding how they work, how much is allowed, and how to apply them strategically to your unique deal.

Ready to Negotiate Smart?

If you’re thinking about buying or selling a home in Alliance Texas, Haslet, or Justin, I’d love to help you structure a deal that gets you the best possible terms. Let’s talk through your goals and create a winning strategy.

Schedule a call with me today — I’m Cathy Carter, Broker at Carter Signature Properties, and I’m here to guide you every step of the way.