Important takeouts:
Buyer concessions are incentives sent to sellers that make the home more affordable for buyers. Common types include closing costs, repair credits, mortgage fee buyouts, and HOA fee cover. Concessions help sellers attract buyers in slower markets and ease financial stress for first-time buyers.
What is a real estate buyer concession?
When purchasing a home, the cost list exceeds the down payment. Closure fees, inspection fees and unexpected repairs can be added immediately. To make the purchase more attractive, the seller may offer buyer concessions. This is a fundamental incentive to reduce the out-of-pocket costs of buyers.
These concessions can make a difference from successful contracts and successful closures, especially for first-time buyers to navigate high upfront costs.
Recent Redfin property data shows that in the first quarter of 2025, seller concessions included an estimated 44.4% of US home-sell transactions, up from 39.3% the previous year, approaching the record high of 45.1% set in early 2023.
This rise strengthens the way buyer concessions continue to be a powerful negotiation tool. This is key to helping buyers buy a home without forcing sellers to lower their listing prices.
Why are buyers’ concessions important?
Buyer concessions bring benefits to both sides of the transaction.
For buyers: lower upfront costs for concessions, making homeownership more accessible. This is especially useful for buyers who are growing their budgets. For sellers: By offering concessions, you can attract more buyers in competitive markets, sell home sales faster and reduce the need for greater price reductions.
The types of buyer concessions are explained
Concessions can take many forms. Some of the most common are:
Closure fee support
Seller may agree to pay a portion of the Buyer’s closing costs. This ranges from 2-5% of the home’s purchase price. For example, a $400,000 home will cost a total of $8,000 to $20,000. Sellers covering a portion of this amount can significantly ease the financial burden on the buyer.
Repair credit
If the inspection reveals the issue, the seller may provide repair credits in exchange for corrections. This allows buyers to handle repairs after closing, reducing immediate costs.
Buying the mortgage rate
Some sellers support buyers by donating funds to temporarily lower mortgage interest rates. This “buy-down” can reduce monthly payments for the first few years of the loan, giving buyers a financial breathing room. See details about mortgage fees.
HOA or insurance fee
In certain cases, the seller can cover the homeowner association membership fee for several months or contribute to the homeowner premiums, further reducing the buyer’s costs.
Examples of buyer concessions in action
Sellers provide $10,000 in closing cost credits to help buyers secure funds without consuming their savings. After inspections reveal that roof repairs are required, the seller will provide a $5,000 repair credit in exchange for completing the work. If the market slows, sellers could fund 2-1 mortgage buybacks, potentially reducing buyers’ interest rates by 2% in the first year and 1% in the second year. In another case, the seller can agree to pay the HOA fee for six months, giving the buyer an extra breathing chamber within the budget in the first year of homeownership.
Buyer Concessions FAQ
Are buyers’ concessions common?
Yes, especially in the market where homes take longer to sell. Concessions are less common in hot, highly competitive markets.
Can I negotiate concessions?
absolutely. Concessions are part of the negotiation process and depend on factors such as market conditions, home conditions, and buyer demand.
Does concessions affect the value of a home?
It’s not directly. However, an appraiser may consider concessions when determining the fair market value of a home, particularly in substantial cases.
Final Thoughts on Buyer Concessions
Buyer concessions are a powerful tool that can make homeownership more achievable and help sellers close the transaction more quickly. Whether you’re a first-time buyer looking for financial relief or a seller who stands out in a slower market, understanding how concession work gives you a bargaining advantage.
Ready to start searching for your home? Visit Redfin.com to browse our property lists, connect with local experts, and learn more about how buyer concessions can support your next move.
