Seller Concessions California: Getting the Seller to Pay Your Closing Costs
Seller concessions — also called seller-paid closing costs — let buyers negotiate to have the seller credit money toward closing costs instead of reducing the purchase price. In a market where every dollar counts, this strategy can mean the difference between coming to the table or not. 📞 (800) 239-1108
What Are Seller Concessions?
A seller concession is money the seller agrees to contribute toward the buyer’s closing costs. Instead of dropping the price, the seller gives you a credit that covers origination fees, appraisal, title insurance, prepaid taxes, insurance impounds, and other closing costs. Net to the seller is similar — but your out-of-pocket at closing is much lower.
Seller Concession Limits by Loan Type in California
| Loan Type | Max Seller Concession |
|---|---|
| Conventional (LTV 90%+) | 3% of purchase price |
| Conventional (LTV 75%-90%) | 6% of purchase price |
| FHA | 6% of purchase price |
| VA | 4% of purchase price (plus all customary costs) |
| USDA | 6% of purchase price |
How to Negotiate Seller Concessions in California
- In a buyer market: Ask directly for concessions without raising the offer price
- In a seller market: Offer slightly above asking, offset by a concession request — seller nets the same, buyer reduces cash needed at closing
- On new construction: Builders often have concession programs rather than reducing prices — ask specifically
What Seller Concessions Can Cover
- Lender origination fees
- Appraisal and inspection fees
- Title insurance and escrow fees
- Prepaid interest (per-diem interest from closing to first payment)
- Property tax and insurance impounds
- Discount points (buying down your interest rate)
Note: Seller concessions cannot be used as your down payment. Down payment must come from approved sources.
Using Seller Concessions to Buy Down Your Rate
Smart buyers use seller concessions to pay for mortgage discount points, permanently lowering their interest rate. On a $900,000 California purchase, 1 point ($9,000 concession) could lower your rate by 0.25%, saving $140+/month for the life of the loan.
Want Help Negotiating Seller Concessions?
We work with your agent to structure offers that maximize concessions in any market condition. We have helped hundreds of California buyers reduce their out-of-pocket costs significantly.
📞 (800) 239-1108 | NMLS #1070853
DiVita Home Finance | NMLS #1070853 | Tiburon, CA | 📞 (800) 239-1108
