10/17/2024
CONSUMER GUIDE:
SELLER CONCESSIONS
As a home seller, you have choices when deciding how to market your property, including
whether you’d like to offer concessions to attract buyers or close a deal. Here’s what you need to
know as you consider whether this approach is right for you:
What are seller concessions and why make them? A concession is when a seller pays for certain
costs associated with purchasing a home for the buyer. Concessions could make your property
more attractive to buyers or lead to a better or faster offer. Concessions also help make home
ownership more accessible for buyers by reducing upfront expenses, so buyers with limited cash
reserves may be able to stretch their budget further.
What are some examples of concessions I can offer? You have options. Concessions can include
covering costs associated with a title search, loan origination, inspection, homeowners’
associations, real estate taxes, or home repairs and updates. They can also be used to cover fees for
professionals like agents and appraisers.
How do seller concessions work? Concessions can be advertised upfront or negotiated as part of
a home purchase agreement. In the agreement, a concession is often written as a specific dollar
amount. Seller concessions usually aren’t binding until they are put in a contract like a purchase
agreement.
What’s the difference between a concession and an offer of compensation? Concessions can
cover a variety of costs or fees for a buyer associated with purchasing a home, whereas an offer of
compensation is specifically when the seller or their agent agrees to compensate a buyer’s agent
for bringing a buyer who successfully closes the transaction. Read more about offers of
compensation here.
How do I tell buyers I’m offering concessions? Concessions can be advertised publicly, shared
on a Multiple Listing Service (MLS)—an online platform that compiles home listings from different
sources—or discussed during purchase negotiations. Keep in mind that not all MLSs allow
concessions to be advertised, and some only allow you to indicate whether you are offering a
concession with a simple “yes” or “no.” If you choose to put a concession on an MLS, it must be
written as the total sum of all concessions offered and can’t be conditioned on the use of, or
payment to, a buyer’s agent.
Is there a limit to the concessions I can offer? Yes. The limit on the total value of concessions you
can offer depends on the terms set by the buyer’s lender and state law. However, any payment
you offer toward the buyer’s broker’s fee is excluded from this amount and must be made off-MLS.
How do I know what option is best for me? When you work with an agent who is a REALTOR®,
you are working with a professional guided by ethical duties under the REALTOR® Code of Ethics,
including the pledge to protect and promote the interests of their clients. Your agent will work
with you to weigh your options, answer questions, and develop a strategy you are confident in.
You can read more about REALTORS’® duty to put client interests above their own here.
Practices may vary based on state and local law. Consult your real estate professional and / or an
attorney for details about state law where you are purchasing a home. Please visit facts.realtor
