Buy · Making an offer
Seller concessions in Florida: how much can you ask for?
Short on cash to close? Asking the seller to chip in is one of the most common moves I make with buyers. The trick is knowing how much your loan will actually let them give.
How much your loan allows
A seller concession (or seller credit) is money the seller puts toward your closing costs and prepaids, like insurance and tax escrows. The cap depends on your loan:
| Loan type | Maximum seller concessions |
|---|---|
| Conventional, primary or second home, 10% down or less | 3% |
| Conventional, more than 10% and up to 25% down | 6% |
| Conventional, more than 25% down | 9% |
| Conventional, investment property | 2% |
| FHA | 6% (of the lesser of price or appraised value) |
| VA | 4% for certain concessions; normal closing costs are handled separately |
These caps come from Fannie Mae’s guidelines (conventional) and from FHA and VA rules. Your lender has the final word for your loan, and I’m happy to connect you with one I trust.
How it looks (made-up example)
Numbers invented to show the math.
$350,000 home, conventional loan, 5% down. The cap is 3%, so $10,500. If your closing costs and prepaids come to $12,000, the seller can cover up to $10,500, and you bring the other $1,500.
Ask for more than the cap and the lender simply can’t use the extra. That money gets left on the table, or the deal has to be rewritten.
Credit or price cut?
| Seller credit | Price cut | |
|---|---|---|
| Lowers cash needed at closing | Yes, a lot | A little (smaller down payment) |
| Lowers your monthly payment | No (unless used for a rate buydown) | Yes, a little |
| Limited by loan rules | Yes | No |
| Helps your appraisal | No | Yes, a lower price is easier to appraise |
Short on cash? A credit usually helps more. Plenty of cash and planning to stay? A price cut may be better. Buying new? Builder incentives work a lot like this: buydown vs. closing cost help.
When to ask
- In your offer, if you know you’ll need help with closing costs
- After the inspection, as an alternative to repairs (repairs, credit or walk away?)
- When the market favors buyers and homes are sitting longer
In a hot market, a big concession request can make your offer less competitive. Here’s how sellers see it: comparing multiple offers.
Want to know your number?
Tell me your loan type and down payment, and I’ll help you figure out the most you can ask for, and whether it’s smart to.
Frequently asked questions
Can seller concessions pay my down payment?
No. They can go toward closing costs and prepaids, not your minimum down payment.
Does the seller paying my agent count as a concession?
Generally no. Fannie Mae and Freddie Mac have said customary seller-paid buyer agent compensation isn't counted toward their concession limits. In my offers, seller-paid compensation is submitted with the offer package and negotiated like any other term. Confirm the details with your lender.
I'm a real estate agent, not a loan officer. Confirm limits with your lender.
Sources
Related answers
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