One of the most common questions I hear from buyers is "Can the seller help with closing costs?" The short answer is yes. The longer answer is more interesting because it involves knowing the rules, timing your ask, and understanding how it affects both you and the seller.
In this guide, I will walk through exactly how seller concessions work in Florida, how much a seller can contribute based on your loan type, and the strategies my buyers use to get the most out of every offer they make. If you have not seen the full breakdown of what closing costs actually cover, start with our complete guide to every buyer closing cost.
What Is a Seller Concession?
A seller concession is exactly what it sounds like: the seller agrees to pay a portion of your closing costs at the closing table. The money comes out of the seller's proceeds from the sale. You do not have to pay it back. Think of it as a credit the seller gives you to help cover the fees involved in finalizing your loan.
Seller concessions are completely legal, standard in Florida real estate, and handled right in the purchase contract. Your real estate agent will write the request into the offer, specifying either a dollar amount or a percentage of the purchase price.
Seller Concession Limits by Loan Type
The maximum the seller can contribute depends on the type of loan you are using. Here are the current limits:
| Loan Type | Max Seller Concession | On a $300k Home |
|---|---|---|
| Conventional (less than 10% down) | 3% | $9,000 |
| Conventional (10% or more down) | 6% | $18,000 |
| FHA | 6% | $18,000 |
| VA | No limit | All costs + prepaids |
| USDA | 6% | $18,000 |
For most affordable buyers using FHA loans (3.5% down) or conventional loans (3% to 5% down), the limit is 3% to 6%. That is $9,000 to $18,000 on a $300,000 home, which covers a significant portion or all of your closing costs. For VA loan users, the seller can pay everything, which is one reason VA loans are the most affordable option for eligible veterans.
How to Negotiate Seller-Paid Closing Costs
Negotiating a seller concession is not complicated, but doing it right can make the difference between getting that credit and walking away empty-handed.
1. Ask in the Initial Offer
The cleanest way to handle a seller concession is to include it in your very first offer. Your agent writes something like "Seller to contribute $10,000 toward buyer's closing costs and prepaid items" right in the contract. This makes it part of the negotiation from the start rather than something you ask for later when the seller has less incentive to agree.
2. Know the Seller's Situation
A seller who has already moved out and is making two mortgage payments is much more likely to accept a concession than a seller who just listed yesterday. Your agent can find out how long the home has been on the market, whether the seller has another home, and how motivated they are. Homes sitting for 30+ days are prime targets for concession requests.
3. Offer a Fair Price
Here is a strategy that works well: offer closer to the asking price but ask for a concession. The seller ends up with roughly the same net amount, and you get your closing costs covered. For example, if a home is listed at $300,000, you could offer $300,000 with a $9,000 seller concession. The seller nets about $291,000 before their other costs, which is similar to accepting a $291,000 offer with no concession.
4. Understand the Appraisal Risk
If the home appraises for less than your offer price, the concession percentage is based on the appraised value, not the purchase price. This is an important detail because if you offer $300,000 with a 3% concession ($9,000) but the home appraises for $290,000, the maximum concession drops to $8,700. Your agent and lender should walk you through this scenario before you make the offer.
5. Consider the FHA 6% Rule
With FHA loans, the 6% limit is generous, but there is a wrinkle: if the seller concession exceeds your actual closing costs and prepaid items, the excess must be used to reduce the sales price. Your lender will calculate this for you. In practice, 6% is more than enough for most affordable buyers to cover all their closing costs.
Real Examples of Seller Concessions in Action
Example 1: First-Time Buyer with FHA Loan
Maria found a townhouse in Boynton Beach listed at $275,000. She is using an FHA loan with 3.5% down ($9,625). Her estimated closing costs are around $8,500. She offers $275,000 with a $9,000 seller concession (3.3%). The seller accepts. At closing, the seller pays $9,000 of Maria's costs leaving her with a small credit toward prepaids. Maria brings her down payment of $9,625 and virtually nothing else.
Example 2: Conventional Loan with 5% Down
James and Tina found a home in Lake Worth Beach listed at $310,000. They are putting 5% down on a conventional loan ($15,500). Their closing costs estimate is $10,000. Because they are putting less than 10% down, the max seller concession is 3% or $9,300. They offer $310,000 with a $9,300 concession. The seller counters at $305,000 with $7,000 concession. They accept. The $7,000 covers most of their closing costs, and they bring about $3,000 plus their down payment to closing.
Example 3: VA Loan, No Down Payment
Derek is a veteran looking in Coconut Creek. He finds a condo at $240,000 and uses a VA loan with zero down. His closing costs are about $7,000. He offers full price with a request that the seller pays all closing costs and prepaid items. With VA loans having no limit on seller concessions, the seller can pay it all. Derek closes with his earnest money deposit and nothing else out of pocket.
Can You Combine a Seller Concession With Down Payment Assistance?
Yes, and this is where the biggest savings happen. Many of my affordable buyers use both:
- Seller concession covers all the closing costs (3% to 6% of the purchase price)
- Hometown Heroes (up to $35,000) covers the down payment
- FL Assist ($10,000) adds extra cushion if needed
When you combine a seller concession with down payment assistance, you can close on a home in South Florida with little to no money out of pocket. I have seen it happen dozens of times. Visit our financing page to see which programs you qualify for.
When Seller Concessions Do Not Make Sense
Seller concessions are not always the right move. Here are some situations where you might skip them:
- Multiple offer situations: If several buyers are competing for the same home, asking for a concession can make your offer less attractive. In a hot market, consider waiving the concession to win the bid
- Already below-market price: If the seller has already priced the home below market value, asking for a concession on top of that might push them to choose a different buyer
- FHA or VA minimum property requirements: If a home needs repairs that the seller must complete to satisfy FHA or VA requirements, the cost of those repairs might limit how much concession the seller can afford to offer
- Short sales or foreclosure sales: The bank approving the short sale may limit or prohibit seller concessions
Your real estate agent can help you read the situation and decide whether asking for a concession helps or hurts your offer.
Frequently Asked Questions About Seller-Paid Closing Costs
Is a seller concession the same as a seller credit?
Yes. The terms are used interchangeably. Both mean the seller pays a portion of your closing costs at closing.
Can the seller pay my down payment too?
No. Seller concessions can only cover closing costs and prepaid items, not the down payment itself. However, if your closing costs are less than the maximum concession, any leftover cannot be applied to the down payment. Instead, it would go toward reducing the purchase price. This is why many buyers combine a seller concession with a down payment assistance program.
Do I need a special loan to get seller concessions?
No. Seller concessions are available with every major loan type: conventional, FHA, VA, and USDA. The limits vary by loan type, but the concept is the same across all of them.
How do I ask the seller to pay closing costs without hurting my offer?
The best approach is to offer at or near the asking price while requesting a reasonable concession. On a $300,000 home, asking for $9,000 (3%) is more palatable to a seller than offering $280,000 and asking for $9,000. The seller still gets close to their asking price and you get your costs covered. Your agent can help you structure this so it works for both sides.
What if the seller says no?
If the seller rejects your concession request, you have options. You can reduce your offer price by the amount of the expected closing costs, look for a different home where the seller is more motivated, or use down payment assistance to cover your costs instead. The key is to know your options before you make the offer so you are not caught off guard.
Are seller concessions common in South Florida?
Yes. In the affordable price ranges ($200K to $400K), seller concessions are very common, especially for homes that have been on the market for more than two weeks. It is a standard negotiating tool that most agents and sellers understand. In my transactions, about half of my buyers use some form of seller concession.
Ready to See How Much You Can Save?
Seller concessions are one of the most powerful tools for reducing what you need at closing. Combined with down payment assistance, they can make homeownership accessible even with limited savings.
Give me a call or text at 561-915-8590 and I will walk you through your options. Or use our affordability calculator to see what price range works for you. For a comprehensive breakdown of every single closing cost, read our complete guide to Florida buyer closing costs.