In order to offset rising mortgage rates, some buyers are searching for better offers.
In order to make the purchase more appealing and reach the closing table, sellers can think about making a higher offer in discussions as house inventory starts to increase and buyers reclaim some market advantage.
Cooper Thayer, ABR, a broker-associate at Keller Williams Action Realty in Denver, believes that buyers may be put off by the current state of interest rates if they don't feel like they're getting a good bargain. "If it's not a very popular product, we're definitely telling sellers that they can anticipate offering a concession to help a buyer get into their home specifically."
Seller Concessions: What Are They?
When the seller pays for some of the expenses related to buying the house, it's called a concession. Concessions can lower upfront expenses for buyers, increasing their access to housing. When a seller needs to stand out in a competitive market or in a market where buyers have more negotiation power, they frequently make concessions.
Actual Instances Of Seller Concessions At Work
According to NAR data, only 24% of sellers countrywide made a concession in 2024, down from 33% the year before, "due to buyer demand and a lack of housing inventory."
Even though the 2025 housing market is still uncertain, a number of indicators suggest that things are looking up: there are more homes on the market than there were a year ago, and both pending and current home sales increased in November.
With the current levels of inventory, Thayer asserts that sellers must set themselves out in the market.
As part of its series of Consumer Guides, NAR issued a one-page reference on seller concessions at facts.realtor in late 2024. Numerous facets of the homebuying and selling process are covered in the consumer guides, along with the modifications to real estate practices that took effect in August of last year. The manuals can be distributed directly to clients by NAR members.
A wide range of expenses, such as those related to a title search, home repairs, or fees for appraisers and real estate brokers, might be covered by concessions. According to NAR data, closing expenses were the most frequently offered concession in 2024. That makes sense in areas like Salt Lake City, where the median age of the population is 33, and there are a lot of first-time buyers.
According to Scott Robins, an associate broker with Summit Sotheby's International Realty in Salt Lake City, "first-time home buyers are huge in our area." In Salt Lake City's downtown, there are two universities. Four more universities are within an hour's drive from us. It's quite safe to assume that a first-time home buyer will require assistance with concessions.
"They usually have their down payment, but they don't have all of their closing costs," he says of people in their late 20s and early 30s.
According to Robbins, 2-1 buydowns are a common seller concession. In essence, the buyer's mortgage rate will be lowered by two percentage points for the first year and one percentage point for the second year thanks to the seller's payment. Buyers are responsible for paying their agreed-upon mortgage rate after those two years of monthly savings.
According to Thayer, "new construction is where concessions or rate buydown offerings are really being successful right now." Because they can, first, keep their inventory longer and, second, promote those incentives more effectively, we're seeing builders employ those kinds of incentives much more. Their marketing purchase power is slightly more than that of the typical [real estate broker or agent].
Credits for home repairs are also typical. According to Thayer, "those concessions are a useful tool, but they're definitely not the end-all, be-all," because the majority of purchasers like turnkey homes.
Marlene Llamas Leon, ABR, CIPS, of Miami's LPT Realty, remembers a recent transaction involving a sizable estate where her sellers decided to compromise.
"The home's new roof cost $120,000, and the inspection revealed six roof leaks that [the sellers] were unaware of," she says. Therefore, that was undoubtedly something that we would have had to reveal [had this purchase failed], and it would have turned off any potential buyers. Thankfully, some retailers took the initiative. They said, "Please leave it up to the buyer," after I explained everything to them. Which would they prefer—a price cut or a credit?
The buyer chose to lower the price.
Generally speaking, Thayer counsels his sellers to fix their houses before listing them for sale.
To truly differentiate your property as much as possible, avoid having to start discussing concessions, and reduce the likelihood of an inspection objection, Thayer says, "that is really the best strategy that we've seen."