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When most buyers think about negotiating on a home, they think about one number:
The purchase price.
The house is listed at $500,000, so maybe you offer $490,000. If the seller accepts, congratulations—you negotiated $10,000 off the price.
But here’s the question I want my buyers to think about:
Did that actually save you the most money where it matters?
Depending on your financing and how much cash you’re bringing to the transaction, asking the seller for $10,000 toward your closing costs may be considerably more useful than getting the same $10,000 knocked off the purchase price.
That’s where seller credits come in.
How Do Seller Credits Work in Washington?
A seller credit—sometimes called a seller concession—is money the seller agrees to contribute toward certain buyer costs as part of the transaction.
Rather than the seller simply accepting a lower purchase price, the offer might be structured so the seller contributes an agreed amount toward eligible costs at closing.
The important part is that this generally isn’t a check the seller hands you after closing so you can go buy a couch.
The credit is handled through the transaction and applied toward costs permitted by your lender and loan program.
Exactly what it can cover—and how much a seller can contribute—depends on the financing involved, so this is one of those situations where your real estate broker and lender should be communicating before the offer is written.
What Can Seller Credits Pay For?
Depending on the loan and transaction, seller credits may potentially help with expenses such as lender fees, title and escrow charges, prepaid property taxes, homeowners insurance, and other eligible closing costs.
In some situations, credits may also be useful as part of an interest-rate strategy.
The specific options depend on your loan, which is why I don’t like treating seller credits as a generic dollar amount.
If we have $10,000 worth of negotiating room, I want to know where that $10,000 benefits you the most.
$10,000 Off the Price vs. a $10,000 Seller Credit
Here’s where buyers sometimes get surprised.
Let’s use a simplified example.
You’re buying a $500,000 home and have enough negotiating leverage to potentially get the seller to give up $10,000.
Option A: Reduce the price to $490,000
Your loan amount may decrease, depending on your down payment and financing.
That’s good.
But you’re financing a home over a long period of time. A $10,000 reduction in purchase price doesn’t mean you suddenly have another $10,000 sitting in your bank account on closing day.
Option B: Buy at $500,000 with a $10,000 seller credit
Assuming your financing allows it, that credit could potentially offset thousands of dollars you otherwise would have needed to bring to closing.
Now we’re solving a different problem.
You may be able to keep more cash in savings for moving expenses, repairs, furniture, an emergency fund, or simply recovering from the small financial assault that moving into a new house tends to become.
Neither option is automatically better.
The point is to figure out which one is better for your specific situation before we negotiate.
Cash After Closing Matters
This is especially important for first-time buyers.
Getting approved for the mortgage is only one piece of buying a house.
There may also be earnest money, inspection costs, appraisal expenses, your down payment, closing costs, prepaid taxes and insurance, moving expenses, and whatever the house inevitably decides it needs approximately eleven minutes after you get the keys.
I don’t want a buyer draining every available dollar just to reach closing.
Owning a house while having $37 left in your checking account isn’t my definition of a successful transaction.
Sometimes preserving cash is more valuable than shaving a relatively small amount off a mortgage you’ll be paying over many years.
That’s a conversation worth having with your lender.
Why Would a Seller Agree to Pay a Buyer’s Costs?
Because the seller cares about their net proceeds, not necessarily how every dollar in the transaction is labeled.
Imagine a seller is willing to accept a certain financial outcome.
There may be several ways to structure an offer that gets them there.
That could mean a lower purchase price.
It could mean a stronger purchase price with a seller credit.
It could involve other terms that matter to the seller.
This is why negotiations aren’t always as simple as:
Listed at $500,000. Offer $480,000 and see what happens.
I want to understand what the buyer needs, what appears to matter to the seller, and how we can structure an offer that makes sense to both sides.
Seller Credits Aren’t Free Money
This part is important.
A $10,000 seller credit doesn’t magically create $10,000.
It’s part of the overall economics of the transaction.
A seller evaluating an offer at $500,000 with a $10,000 credit is going to consider that credit when calculating what they’re actually receiving from the sale.
And depending on the market, property, competing offers, and seller motivation, asking for a large credit could make an offer less attractive.
That’s why strategy matters.
On a brand-new listing with multiple buyers fighting over it, we may approach credits very differently than we would on a home that’s been sitting on the market and has a motivated seller.
There Are Limits to Seller Credits
You also can’t simply pick an enormous number and ask the seller to pay it.
Different mortgage programs have rules governing seller contributions, and the allowable amount can depend on factors including loan type, down payment, occupancy, and how the funds are being used.
There may also be practical limits based on your actual eligible closing costs.
This is exactly why I don’t want to guess.
Before writing an offer involving a meaningful seller credit, I’ll work with the buyer’s lender to determine what the loan allows and how the credit could actually be used.
A beautifully negotiated credit doesn’t accomplish much if your financing won’t let you use it.
This Is Why I Want Your Lender Involved Before We Write
Your lender isn’t just the person who tells us the maximum purchase price.
They’re part of the strategy.
If I think we have negotiating room on a property, I may call the lender and essentially ask:
If I can get some money out of this seller, where does it help our buyer the most?
Maybe it’s closing costs.
Maybe reducing the purchase price makes more sense.
Maybe there’s an opportunity involving the interest rate.
Maybe the buyer already has plenty of cash and doesn’t need a credit at all.
The answer depends on the buyer.
That’s why having a real conversation before writing the offer is considerably more useful than automatically throwing a lower number at the seller.
The Best Offer Isn’t Always the Lowest Price
Buying a home isn’t about winning a negotiation so you can tell everyone you got the seller down another $10,000.
It’s about putting together a transaction that works for you.
Sometimes that’s a lower purchase price.
Sometimes that’s preserving cash.
Sometimes it’s negotiating repairs.
Sometimes it’s getting the seller to contribute toward costs you’d otherwise pay yourself.
And sometimes the smartest move is simply writing a clean offer on the right house before somebody else does.
There isn’t one negotiating strategy that works for every buyer, every house, or every market.
That’s why we look at the entire transaction—not just the number at the top of the purchase agreement.
Buying a Home in Western Washington?
If you’re thinking about buying in Olympia, Thurston County, or the surrounding Western Washington communities, let’s talk about more than just what you’re approved to spend.
We’ll look at the house, your financing, the market, your available cash, and what you’re trying to accomplish—and then structure an offer accordingly.
Because getting money from the seller is great.
Making sure that money actually helps you is better.
