For the past few years, it’s been mostly a seller’s market. But dynamics are shifting as the number of homes for sale grows. And that means that the market is balancing out a bit. As a result, some sellers find they need to be more flexible to close a deal. One strategy that can help? Offering concessions.
As the National Association of Realtors (NAR) explains:
“As home inventory begins to grow and buyers regain some advantage in the market, sellers may consider offering more in negotiations to make the deal more attractive and get to the closing table.”
What Are Seller Concessions?
Concessions are homebuying costs that a seller agrees to cover as a way to get their house sold. And based on data from the National Association of Realtors (NAR), nearly 1 out of every 4 sellers (24%) offered a concession in 2024. Here are a few of the most common types of concessions:
- Covering Closing Costs: The seller pays for part (or all) of the buyer’s closing costs, like appraisal fees, title insurance, or loan fees.
- Price Adjustments: Instead of making repairs, a seller might lower the purchase price to make up for updates the buyer will need to tackle.
- Adding a Home Warranty: A seller may throw in a home warranty, giving the buyer peace of mind key repairs will be covered in the first year.
And don’t worry. This doesn’t mean you have to create more cash to make it happen. These things get subtracted from your profits at closing – not more funds you have to bring to the table. And not all concessions are about money.
There are other extras you could throw in. If your buyer comes from an apartment and has never had a yard, they may ask if you’d be willing to leave your lawn mower behind. That’s another lever you could pull to keep them happy.
How Concessions Help Sellers
Offering concessions can be a smart strategy for sellers to get a deal done. As Dennis Shirshikov, Professor of Finance and Economics, City University of New York/Queens College, told The Mortgage Reports:
“Pricing homes realistically and being willing to offer concessions, such as covering a portion of closing costs or including upgrades, will be key to closing deals . . . in a less frenzied market.”
For example, let’s say you accepted an offer from a buyer, but after their inspection, you found out there are some repairs they want you to tackle before you hand over the keys.
You could offer a concession rather than starting at square one and searching for a new buyer. One option is to take on the repairs and cover the costs yourself. But, if you don’t want the hassle of dealing with contractors, you could reduce your price by however much repairs would cost. Alternatively, you could offer to pay a portion of your buyer’s closing expenses with the idea they’d use the money they saved at closing toward doing the repairs themselves.
Either way, a concession can be a great way to meet in the middle. However, having an agent on your side is essential to help with these negotiations.
A good real estate agent can help you decide when and how to offer concessions so you don’t give away too much while ensuring your house gets sold. It’s all about finding the right balance.
Bottom Line
With the market becoming more balanced, seller concessions are coming back into play in some areas. The key is having an agent to help guide you through the process so things work out in your favor. That’s where I come in.
What’s a concession you’d consider to move things along?
