The FHA limits seller concessions to 6% of the loan amount. Nor can seller concessions be used for the down payment, home repairs, new appliances, or for any other purpose than to pay for closing costs shown on the final loan documents. The seller’s agent will point this out to them. In the contract, you can make the sale contingent upon the seller setting money aside from the proceeds of the sale for the repairs. During negotiations, the buyer works with the seller or their agent to come to an agreeable amount of money the seller … A seller’s concession is an amount of money paid toward closing on your behalf. You don't necessarily have to ask for the full amount of the repairs, though. Some sellers, however, are just stubborn. Concessions are incentives that you as a seller offer to buyers to sweeten the pot, such as paying certain fees at closing or offering money for needed repairs. A Concession for Repairs: Let’s say you’re negotiating with the same seller on a deal. Hopefully, they’ll listen and agree to make repairs. How Do Seller Concessions Work? The seller gives the buyer a lump sum at closing to cover the cost of repairs, which the buyer agrees to carry out. Just like seasonal sales offer retail shoppers a little something extra for their purchase, so do concessions in real estate. Generally, this money is used to pay for closing costs, but sellers occasionally concede money if they realize their carpets are gross and need to be replaced or that their garage needs repairs they don’t really want to make. However, used incorrectly, offers for concessions can backfire. If the asking price is $200k, and the repairs will run $10k, you might ask for only $5k off the asking price. Consider this: In some market areas, it is customary for sellers to pay for, and provide to the buyer at closing, a current plat of survey. The amount is usually computed at 1.5 times the estimated cost. Consider this example: Say you’re financing a $350,000 home. Ask for a credit: The buyer may request a credit (also called a concession), in an amount that’s enough to cover the repairs. Other times, a buyer may add in a request for seller concessions later in the process to offset the costs of any necessary repairs the inspection uncovers. This is why your purchase agreement stated that the offer was contingent upon inspection. The seller knows you are a bit uncertain, and offers you $5,000 to pay the closing costs. This setup can be a huge win-win for everyone. The buyer’s mortgage lender may not approve a mortgage on a home that needs a major structural repair. Whether they pay the closing costs out of their pocket, or give you the cash at the closing table- you still only need $10,000 at closing.   Request repairs: The buyer may request that the seller complete a list of requested repairs, as a condition of the sale moving forward. A portion of the seller's proceeds can be held in trust after closing and used to pay for repairs. 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