What is a Seller Credit? 4 Scenarios Where Credits Help Home Sales

While researching the home sales process, you’ve likely come across the term “seller credit.” A seller credit is a type of seller concession where the seller offers the buyer money at closing to sweeten the deal. Buyers appreciate seller credits since these essentially discount their closing costs, which are typically between 2% and 5% of the home’s purchase price.

As a seller, there are several scenarios where you may offer a seller credit to incentivize offers or move a deal forward. We’ll fill you in on how seller credits work and walk you through situations where these credits may play in your favor. For added insight on using credits wisely, we consulted top agent Topher Kauffman, who has over 15 years of real estate experience and has closed 82% more single-family home sales than the average agent in Summerville, South Carolina.

Seller credits are money the seller gives the buyer at closing

A seller credit is money that the seller gives the buyer at closing as an incentive to purchase a property. The credits may subsidize a buyer’s out-of-pocket closing costs, cover the cost of needed repairs, or otherwise sweeten the deal to move the sale forward.

Seller credits are a common home sale negotiation tactic. Seller credits tend to be more common when market conditions favor buyers, and less common when conditions favor sellers. According to a 2023 report by the National Association of Realtors, 20% of sellers offered incentives to attract buyers, as compared to 46% in the slower 2020 market. This number also varied across age groups, with millennial sellers less likely to offer concessions than boomers.

Kauffman confirms that seller credits are an important building block of the negotiation process. He estimates that 80% of his transactions involve some type of seller concession (of course, there are many seller concession examples that aren’t seller credits).