Seller Concessions are based on lender approval. Seller Concessions can help with closing costs and cover fees typically charged to the Buyer such as Appraisal cost, loan origination fees, title insurance cost, attorney fees, interest rate buydowns or points, etc.
It cannot be used for the Buyer’s down payment.
A few things to note about Seller Concessions:
1) There is a percentage limit based on loan type, down payment amount, and type of purchase: primary home, investment home , second home, etc.
2) It is subject to lender approval and
3) any “excess” Seller Concession funds does not get credited to buyer’s loan or as cash back. For example, if the contract states $12k in Seller Concessions and the closing costs and fees only amount to $8k, the Buyer does not receive the remaining $4k. The Seller only pays $8k in Seller Concessions even though $12k was agreed to, because Seller Concessions is only meant to cover the closing costs and fees that the Buyer can pay.
