FAQ: Can the seller help pay my closing costs?

Buying a home comes with more upfront expenses than just the down payment. Closing costs can include things like loan fees, title and escrow expenses, prepaid taxes and insurance, and other costs associated with completing the purchase. In some cases, the seller may be able to contribute toward certain expenses.

These contributions are often referred to as seller concessions or seller credits. They can potentially help reduce the amount of cash a buyer needs to bring to closing, which may make it easier to manage the upfront costs of purchasing a home.

However, seller contributions aren’t unlimited. The amount a seller can contribute and what those funds can be used for depends on factors such as the loan program, purchase price, occupancy, and terms of the transaction. Some costs may be eligible while others may not be.

Seller concessions are also something that can potentially be negotiated as part of the purchase offer. In some situations, a buyer may choose to negotiate a seller credit instead of a lower purchase price, depending on their priorities and the overall terms of the transaction.

The bottom line: Seller contributions can be a useful tool for managing the upfront costs of buying a home, but the rules vary and the right approach depends on your financing and financial goals. Understanding how seller concessions could affect your cash-to-close can help you evaluate the full picture when making an offer.