Some buyers are looking for better deals to counter higher mortgage rates.
As home inventory begins to grow and buyers regain some advantage in the market, sellers may consider offering more in negotiations to make the deal more attractive and get to the closing table.
“With where interest rates are, buyers can be deterred if they don’t feel like they're getting some kind of deal,” says Cooper Thayer, ABR, broker-associate at Keller Williams Action Realty in Denver. “We're definitely advising sellers that they can expect to offer a concession to help a buyer get into their home specifically—if it's not a super-hot product.”
What Are Seller Concessions?
A concession is when the seller covers certain costs associated with the purchase of the home. Concessions can make homeownership more accessible for buyers by reducing upfront costs. Seller concessions are often used in markets where buyers have more negotiating power or when the seller needs to stand out in a competitive environment.
Real Examples of Seller Concessions in Action
NAR data found that “given buyer demand and lack of housing inventory,” only 24% of sellers nationwide offered a concession in 2024, down from 33% the previous year.
While the 2025 housing market remains to be seen, several signs point to a healthier outlook: both pending home sales and existing-home sales jumped in November and there are more homes on the market compared to a year ago.
“Sellers do have to differentiate themselves in the market now with the levels of inventory that we're at,” Thayer says.
In late 2024, NAR published a one-page resource on seller concessions, which is part of a series of Consumer Guides that NAR provides at facts.realtor. The consumer guides address many aspects of the homebuying and selling process as well as the real estate practice changes that went into effect last August. NAR members can share the guides directly with their clients.
Concessions can cover a wide range of costs, like those associated with a title search, home repairs or fees for real estate agents and appraisers. Closing costs were the most common concession in 2024, NAR data shows. That makes sense in markets with a high volume of first-time buyers, like Salt Lake City, where the median age of residents is 33.
“First-time home buyers are huge in our area,” Scott Robins, an associate broker at Summit Sotheby’s International Realty in Salt Lake City, says. “We have two universities in downtown Salt Lake City. We have four additional universities within an hour drive. If I'm working with a first-time home buyer, it's almost given that they are going to need some help with concessions.”
He says those in their late-20s and early-30s “typically have their down payment, but they don't have all of their closing costs.”
Robbins says 2-1 buydowns as a seller concession are popular. Essentially, the seller will pay to reduce the buyer’s mortgage rate by two percentage points for the first year and one percentage point for the second year. After those two years of monthly savings, buyers are on the hook for their agreed upon mortgage rate.
“The place where concessions or rate buydown offerings are really being successful right now is with new construction,” Thayer says. “We're seeing builders utilize those kinds of incentives a lot more because they have the ability to, one, hold on to their inventory longer, and two, do a better job at marketing those incentives. They've got a little bit more marketing purchase power than the average [real estate broker or agent] has.”
Home repair credits are also common. Most buyers want a turnkey home, Thayer says, “so those concessions are a useful tool, but they’re definitely not the end-all, be-all.”
Marlene Llamas Leon, ABR, CIPS, of LPT Realty in Miami recalls a recent deal on a large estate in which her sellers chose to make a concession.
“What came up in the inspection were six roof leaks that [the sellers] had no idea they had, and the new roof for the home was $120,000,” she says. “So, that was definitely something that [if this transaction had fallen through] we would have had to disclose, and it would have been a turnoff for any buyer that would have walked in next. These sellers were very proactive, thank goodness. Once I spoke to them, they completely understood, and they said, ‘Please leave it up to the buyer. Do they prefer a credit or a price reduction?’”
The buyer went with a price reduction.
In general, Thayer advises his sellers to make repairs before putting their homes on the market.
“That is really the best strategy that we’ve seen ... to really differentiate your home as much as possible so we don’t have to start talking about concessions and really minimize what may come up in an inspection objection,” Thayer says.
Information courtesy of:
Eliana Block
Eliana Block is a business writer for REALTOR® Magazine. She can be reached at eblock@nar.realtor.
