Blog > What Is a Seller Credit — and How Can Buyers Use It to Save Thousands?
If you're buying a home in Baton Rouge or Prairieville, you may have heard your agent or lender mention something called a “seller credit” or “seller concessions.” But what exactly is it, and how can it help you save money at closing — or even lower your monthly mortgage payment?
Let’s break it down in plain English.
💡 What Is a Seller Credit?
A seller credit is when the seller agrees to cover part of your closing costs or give you a financial credit at closing. It’s essentially money that the seller contributes on your behalf — usually negotiated during the offer stage.
✅ It does not reduce the home’s price
✅ It can reduce the amount of cash you need to bring to the table
It’s especially helpful for buyers who:
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Have limited cash for closing costs
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Want to buy down their interest rate
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Need help covering prepaid taxes and insurance
💰 How Much Can You Ask For?
It depends on your loan type:
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Conventional Loan: Up to 3%–6% of the purchase price
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FHA Loan: Up to 6%
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VA Loan: Up to 4% (plus some extras)
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USDA Loan: Up to 6%
📌 Example: On a $300,000 home with 3% seller credit, that’s $9,000 toward your closing costs.
🔧 What Can Seller Credits Be Used For?
Seller credits can typically be applied to:
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Title company and attorney fees
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Lender origination fees
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Appraisal and inspection costs
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Prepaid taxes and homeowner’s insurance
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Buying down your interest rate for a lower monthly payment
💡 Rate buydowns are popular right now — especially when paired with a temporary 2-1 buydown strategy.
📉 Real-World Example: How Buyers Save
Let’s say you're buying a $275,000 home in Denham Springs with an FHA loan.
Without seller credits:
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You need ~$10,500 for closing costs out of pocket.
With a 3% seller credit:
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Seller pays ~$8,250 of your costs.
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You bring just ~$2,250 to closing — or you could reallocate those savings to upgrade appliances or buy down your rate.
📝 How Do You Negotiate Seller Credits?
That’s where your Realtor comes in.
Seller credits are typically negotiated:
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During the initial offer, or
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After inspections, when repairs are needed but the seller prefers to offer money instead
As experienced Baton Rouge agents, we often help buyers get credits without affecting the offer’s competitiveness — especially if we spot inspection leverage or know the seller’s timeline goals.
🏁 Final Tip
You can’t always get seller credits in a hot market, but in today’s balanced market, many sellers are willing to help buyers get to the closing table — especially when the home has been on the market for a few weeks.
💬 Let’s Talk Strategy
Wondering how seller credits could work for your situation? Let’s run the numbers.
📞 Call: (225) 268-1110
🌐 Visit: movingto225.com
📩 Email: calltracymathis@gmail.com
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Tracy Mathis
Broker Associate | License ID: 995680747
Broker Associate License ID: 995680747