By David Parks · eXp Realty · The Apollo Group · 2 min read
Seller concessions are contributions toward a buyer’s closing costs, agreed in the contract. Lender credits reduce closing costs in exchange for a higher interest rate. Both can reduce cash needed at closing, but they work differently.
A seller agrees to pay part of your costs, such as lender fees, prepaid items, or a rate buydown. Loan types limit how much a seller can contribute.
The lender covers some costs, and you accept a slightly higher rate. This can help when cash is tight, but increases your payment over time.
A concession can effectively raise the price paid, since the seller may ask for more. The appraisal must still support the price, and concessions may reduce a seller’s net proceeds.
Ask your agent and lender to model both approaches. The best choice depends on your cash, your timeline, and your monthly budget.
This article is general information, not legal, tax, financial or inspection advice. Every home and situation is different, so confirm details with a licensed inspector, lender, attorney or tax professional.
David is a Greater Denver real estate advisor with eXp Realty and The Apollo Group (Colorado broker license FA100103211). He has closed more than $55 million in volume, earned eXp Icon status in 2025, and holds a 5.0 rating on Zillow from 27 verified reviews.
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