By Roy Towse
If you are getting ready to sell on Seattle's Eastside, you have more levers to pull than the list price alone. Seller concessions are one of the most useful, and most misunderstood, and I want you to understand how they work. Used well, they can bring hesitant buyers to the table and keep a deal moving toward closing on your timeline. Here is how I think about them for homes in Bellevue, Sammamish, Mercer Island, and the surrounding Eastside markets.
Key Takeaways
- Seller concessions let you cover part of the buyer's closing costs while keeping your sale price intact
- Every loan type sets a ceiling on how much you can contribute, from 2 to 9 percent
- Concessions can fund a rate buydown, which often matters more to a buyer than a price cut
- They work best at higher price points, on longer listings, and when rates are pushing buyers to negotiate
What Are Seller Concessions?
Seller concessions are costs you agree to cover on behalf of the buyer as part of the purchase agreement. Instead of lowering the price outright, you direct a set amount toward expenses the buyer would normally pay at closing. The money is credited through escrow and applied to the buyer's side of the settlement statement.
Buyers like concessions because they reduce the cash needed to close. For you as the seller, they make your home more competitive while protecting the headline price that shows up in public records and comparable sales.
Common Types of Seller Concessions
- Closing cost credits that offset lender fees, escrow charges, and recording costs
- Prepaid items such as the first year of homeowners insurance and property tax reserves
- Discount points that permanently lower the buyer's mortgage rate
- A temporary rate buydown that reduces the buyer's payment for the first year or two of the loan
- A home warranty covering major systems for the first year of ownership
- Repair credits negotiated after the inspection in place of doing the work yourself
How Seller Concessions Help You Close Faster
A concession widens the pool of buyers who can realistically afford your home. Many qualified Eastside buyers have strong incomes but limited cash after a down payment, and closing costs can run several percent of the price. Covering part of that gap removes a common reason deals stall late.
Concessions also help when a buyer's monthly payment is the sticking point. A rate buydown funded through a concession brings that payment down without you dropping the price, which keeps your closed number supporting values in submarkets like Clyde Hill and Woodinville.
What a Concession Can Solve
- A cash-to-close gap that is holding back an otherwise strong buyer
- Payment shock from higher rates, which a buydown can ease
- Post-inspection repair requests you would rather credit than complete
- A stall in negotiation where a price cut feels heavier than a targeted credit
Limits on Seller Concessions by Loan Type
The amount you can contribute is capped by the buyer's loan program, and knowing the ceiling before you negotiate keeps an agreement from unraveling in underwriting. Conventional caps rise with the buyer's down payment and are figured on the lower of the sale price or the appraised value, while government-backed loans set their own fixed ceilings.
Since the National Association of Realtors settlement took effect in August 2024, offers of buyer-broker compensation can no longer be posted on the MLS, though buyer concessions for costs like closing assistance still can. Some buyers now ask sellers to help cover their agent's fee through a concession, so decide early how you want to handle that.
Contribution Caps at a Glance
- Conventional, less than 10 percent down: up to 3 percent
- Conventional, 10 to 25 percent down: up to 6 percent
- Conventional, 25 percent or more down: up to 9 percent
- Conventional investment property: up to 2 percent
- FHA and USDA: up to 6 percent of the sale price
- VA: up to 4 percent of the value for specific items, plus customary closing costs
When Seller Concessions Make Sense on the Eastside
Concessions are a strategy, not a default. In a competitive situation on a well-priced Sammamish home, a buyer may drop the request entirely. A large share of Eastside luxury sales also close in cash, and a cash buyer skips loan costs entirely, so concessions carry less weight at the very top of the market.
Where they earn their keep is in the situations that slow a sale down. I look at your price band, how long comparable homes are sitting, and where rates stand before I recommend building a concession into your pricing plan.
Situations Where Concessions Pay Off
- Higher price points where even well-funded buyers watch their cash reserves
- Listings that have been on the market longer than the local average
- Periods when mortgage rates push buyers to ask for a buydown
- New construction, where a buydown keeps the monthly payment attractive
Frequently Asked Questions
Do seller concessions lower my net proceeds?
Yes, a concession reduces what you take home by the amount you contribute, much like a price reduction of the same size. The upside is that your recorded sale price stays higher, which supports comparable values and appraisals on nearby homes.
Are seller concessions the same as a price reduction?
They are close, but they work differently. A price reduction lowers the purchase price for everyone and shows up in the public record, while a concession keeps the price intact and directs a set amount toward the buyer's closing costs, which helps a buyer who is short on cash rather than on budget.
Can seller concessions be used for a rate buydown?
Yes, and it is one of the most effective uses when rates are the buyer's main worry. A concession can fund discount points for a permanent lower rate or a temporary buydown that reduces the payment in the early years of the loan.
Reach Out to Me Today
Selling on the Eastside rewards a plan built around your price point, your timeline, and the buyers most likely to write an offer. Seller concessions are one of several tools I use to structure a deal that closes, and the right approach looks different for a Medina waterfront home than a Sammamish new build.
If you are thinking about listing and want a strategy that fits your home and your goals, reach out to me, Roy Towse, founding and managing broker at Compass Washington with more than two decades of experience across Bellevue, Sammamish, and the greater Seattle Eastside.
