October 16th, 2026 3:32 PM by Jonathan Hall
When you are buying a home, you cannot physically get money back at closing. There are strict rules against this. A mortgage is a secured loan used only to purchase real estate. Banks provide their funding based on the verified purchase price and the appraised value of the property. Handing extra loan or a seller concession money back to the buyer as cash would falsely inflate the loan, which is fraud. If we negotiate any seller concession as part of the sale, those funds are applied on your closing statement as a credit to cover specific items, such as lender fees, pre paid and title costs. Each loan type has an allowable % of seller concessions, so check with your lender. If we negotiate a $10,000 credit with the seller, and your actual costs are $8,000, you can not walk out with the $2,000 balance. The unused money can vanish or your lender will apply any remaining balance your overall loan. Check with your lender. Negotiating a seller concession is an arrangement where the home seller agrees to pay a portion of the buyers upfront closing costs out of their own proceeds from the sale. Instead of reducing the purchase price of the home, the seller gives money back to the buyer at closing to offset outta-pocket expenses. For buyers, it reduces the cash you need up front. For sellers, it can keep the purchase price high, instead of lowering the listing price. For both parties, it can be used after the home inspection with the seller offering money back in lieu of any needed repairs or items nearing the end of their expected service life. Also keep in mind, the home will be appraised at the contract price, not the net amount going into the sellers pocket. For example, if the contract price is $425,000 that includes a $15,000 concession, the home will have to appraise for $425,000-not $410,000.Jonathan D. HallCT Licensed Real Estate Salesperson. RES. 0783448William Pitt Sothebys International Realty, 67 Federal Road Brookfield, C 203-417-0523 O)203-796-7700 Jhall@Wpsir.Com