Seller-Paid vs Buyer-Paid Closing Costs
**Seller-paid closing costs** (seller concessions) reduce cash needed at the buyer's closing table but often raise the agreed price. **Buyer-paid** closing is standard—the buyer brings funds for lender, title, and escrow fees.
Step by step
1. Check lender caps
Conventional and FHA limit seller concessions as % of price.
2. Net the price
Higher price with 3% seller credit may equal lower price without credit.
3. Itemize CD
Closing Disclosure shows who pays each line—negotiate specific fees.
Seller vs buyer paid
In hot markets sellers offer less credit; in slow markets credits rise.
- Seller concessions: Less cash to close; may inflate price; lender limits.
- Buyer paid: More upfront cash; cleaner offer in competitive bids.
Use our calculators
Common mistakes
- Credit over lender max
- Ignoring appraisal gap when price bumps for credit
FAQ
Are concessions taxable?
Generally treated as price adjustment—not income to buyer—confirm with CPA.