The Situation
Your listing has been showing well. The strongest offer on the table includes a concession request. Before you counter with a price reduction — or let the deal walk — there’s a structure worth running the numbers on.
It costs the seller less than a price cut. It gives the buyer significantly more monthly relief. And the sale price goes on record at full ask — protecting the comp for the neighborhood and your seller’s equity position.
How It Works
Seller Contributes from Proceeds
At closing, the seller allocates a portion of proceeds into an escrow account — instead of reducing the sale price.
Buyer’s Rate Drops Temporarily
That escrow subsidizes the buyer’s interest rate — 2% lower in Year 1, 1% lower in Year 2. Year 3 onward reverts to the original note rate.
Full Price on Record. Comps Protected.
The sale records at $875K, not $855K. Neighborhood comps stay clean. The buyer gets meaningful payment relief and the seller avoids a price cut that would cost more.
The Math: Concession vs. Price Cut
$875,000 home · 20% down · $700,000 loan at 6.5%
$20K Price Cut
$855,000
Seller net
Buyer saves ~$101/mo
~$16K Buydown Concession
$859,100
Seller net
Buyer saves $877/mo in Year 1
The concession costs the seller $4,100 less than a price cut — and the buyer gets nearly 9× more monthly relief. 44% of all home sales in 2025 included seller concessions — this is standard practice, not a special request.
Why This Works for the Seller
- Higher net proceeds. The concession is smaller than a typical price reduction. Seller keeps more.
- Sale price on record. Full price protects neighborhood comps and the seller’s equity position.
- More likely to close. The buyer’s Year 1 payment drops significantly, reducing the risk of cold feet, re-negotiation, or the deal falling apart.
What Happens After Closing
The buyer enjoys lower payments for two years. If rates decline and they refinance, any unused buydown funds in escrow are applied to their loan balance. The seller has already closed at full price — the refinance doesn’t affect them.
Either way, the deal is done. The seller moved on with more money than a price cut would have allowed.
Appraisal & Compliance
The concession is structured within Fannie Mae financing concession limits (3–9% on conventional, 6% FHA, 4% VA). A ~$16K buydown on an $875K sale is under 2%.
Appraisers adjust comparables, not the subject property. The sale records at the full contract price. The concession is disclosed but does not reduce the appraised value.
CA MLS rules prohibit specific dollar amounts in public remarks. We provide compliant remark language — no dollar figures, no percentages — so your listing stays clean.
Questions Your Seller Will Ask
“This is just a price cut in another form.”
Same net, different market signal. Your sale price stays at $875K. A price cut records at $855K. One protects the comp and costs less. The other doesn’t.
“Will this affect the appraisal?”
Appraiser adjustments happen to comparables, not the subject property. The concession is disclosed, but the sale records at full contract price. The structure stays within IPC limits.
“Why should I pay for the buyer’s rate problem?”
Think of it as a closing strategy, not a giveaway. It costs less than a price cut, it closes the deal faster, and your price stays on record. Time on market is not the seller’s friend — every week sitting adds carrying costs and invites a bigger price reduction down the road.
Want the Exact Numbers for This Deal?
We can run a custom breakdown in minutes — exact concession amount, seller net comparison, and monthly payment schedule. Let the buyer’s agent know you’re open to running the numbers and we’ll have them to both sides the same day.