Quick Answer
Yes. A seller can often pay for part of your closing costs and prepaids, a home warranty, repairs after the inspection, and even buy down your interest rate. The common catch is that most loan programs cap how much a seller can contribute, and that cap can change by deal. Confirm the current cap with your loan officer before you write the offer.
Most first-time buyers call me thinking the cash they bring to closing is set in stone. It is not. In Texas, it is completely normal to ask the seller to carry some of your costs, and that request is one of the fastest ways to keep more of your own cash in your pocket. I am a licensed loan officer and a Realtor, and I want you to know exactly which dollars a seller can cover and which ones you should not ask for.
This is an evergreen teaching page, not a quote. Nothing here is a current rate, tax figure, or dollar amount for your deal. Where teaching numbers appear they are clearly labeled, and your real terms always come from your specific contract, your loan officer, and your agent.
What "Seller Pays" Actually Means
In The Essential First-Time Homebuyer Roadmap I teach this in one line: a seller concession is an agreement where the seller contributes dollars toward your costs at closing instead of you paying them all out of your own pocket. It is a credit on your side of the settlement sheet, and it can shift your upfront cash significantly. For a buyer who is already stretching to save a down payment, that shift is often the difference between a comfortable close and a stressful one.
Two points to keep straight before you get excited. First, a concession most often covers your closing costs and prepaids, not your down payment. The down payment is the part you own; the seller's credit helps with the fees and the funded escrow accounts that otherwise come out of the cash you bring. Second, this is not a discount on the asking price, it is a line item in the contract, and the two can feel very different. For the full picture, here is how seller concessions work in Texas, and here is what buyers typically pay in closing costs.
What a Seller Can Cover
Here is the honest menu of what a seller can realistically contribute toward your purchase. Keep each item under whatever your loan program allows, and you will be making a smart, allowed ask rather than a shot in the dark.
What a Seller Can Pay For
| Line item | What it covers | Patrick's note |
|---|---|---|
| Closing costs | Lender fees, title, escrow, and third-party costs that land on your side of the settlement sheet. | The most common concession ask and usually the biggest one. See which closing costs buyers pay in Texas. |
| Prepaid taxes and insurance | The escrowed property taxes and homeowners insurance funded at closing for the early months of ownership. | These are real cash out the door on closing day, so a seller credit here is genuinely valuable. |
| A rate buydown (points) | Prepaid points that lower your interest rate, like a 2-1 buydown, with the seller funding the cost. | A smart, allowed way to use a concession that lowers your payment every month, not just your cash to close. How a rate buydown works explains the tradeoffs. |
| A home warranty | A policy the seller funds that covers major systems and appliances for the first year after closing. | A lightweight, almost-cheerful ask that protects a first-time buyer from a surprise repair bill. Learn how a seller-funded home warranty works. |
| Repairs after the inspection | Fixing items your inspector flags, or a credit toward the repair cost once the inspection is done. | Focus on major structural, safety, and mechanical issues, not cosmetics. How to negotiate repairs after an inspection. |
| Some transfer and title charges | Title search, title insurance, and recording charges that attach to transferring ownership. | Often on the seller's side in Texas custom, but the exact split is negotiable contract terms. The full list of what you can negotiate. |
This is a teaching menu, not a promise. Whether each item is allowed, and the exact dollar amount, depends on your loan program and your negotiated contract terms.
The Cap: Why Sellers Can't Always Cover Everything
Here is the honest part that surprises buyers: most loan programs place a limit on how much a seller can contribute toward your costs, and the limit depends on your loan type and your loan-to-value ratio. Loans with higher loan-to-value, meaning a smaller down payment, often allow less because the lender is taking on more risk. FHA, conventional, and VA each treat concessions differently, so the answer is never one number.
LENDER OVERLAY / PROGRAM NOTE: Confirm the Current Cap
I am not going to recite a hard cap here, because the real limit is a lender overlay and a program note that changes by lender, by loan program, and by your down payment. What is true today for one file can be different for yours tomorrow. The rule that never changes: verify the current cap with your loan officer before you write the offer, and never ask for more than your loan allows. A concession over the cap does you no good and can slow or stall your file.
As a loan officer and a Realtor on the same deal, I can show you your exact cap and your exact closing cost number at the same time, so your ask is both safe and smart.
Concessions vs Lowering the Price
A common question is whether it is better to ask the seller for a credit toward closing costs or to ask them to lower the price. The answer is: it depends on which cost you are trying to solve. A lower price shrinks your monthly payment and your principal, while a concession lowers the cash you bring on closing day. When you are cash-strapped, closing-cost help is usually the more powerful lever. When you can bring the cash and care more about the monthly payment, a lower price (or a buydown) wins. Here is the full breakdown of down payment vs closing costs.
PATRICK TEACHING: Concessions vs a Lower Price
| You need to solve | Reach for | Why |
|---|---|---|
| Cash to close is tight | Seller concession / credit | Directly lowers the money you bring on closing day, which is the wall most first-time buyers hit. |
| Monthly payment is tight | Lower price or a rate buydown | A lower price shrinks the loan; a buydown lowers the rate. Both change your payment every month. |
| Long-term home value matters | Lower price | A lower purchase price buys you more equity from day one, which is worth more over years of ownership. |
The professional move is to model both on your actual offer before you choose. That is exactly where being on both sides of the deal helps: I can run your numbers both ways and show you the difference in cash to close and monthly payment.
How to Ask for It the Smart Way
Asking the right way is almost as important as asking. The single biggest tip I teach: bake the request into your offer as a package, not as an afterthought. Write the price and your concession ask together, keep the ask within your loan's cap, and let your agent negotiate it cleanly. A bundled, justified ask feels professional. A last-minute surprise request can feel like a fight. Here is what makes a strong home offer, and here is how to decide how much to offer.
A Clean “Ask for Seller Help” Checklist
- Know your cap first. Confirm the current concession limit with your loan officer before the offer goes out, so you never ask for more than the program allows.
- Bundle it into the offer package. Put the price and the concession ask in the same offer so the seller sees the whole picture at once, not a surprise bolt-on later.
- Justify the number. Tie your ask to real closing costs, not a round figure, so it reads as a serious buyer understanding their own deal.
- Let your agent negotiate it. One clean voice keeps the offer professional and protects your position.
- Keep it inside the cap. Never exceed what your loan allows, or you weaken an otherwise strong offer for no gain.
The Honest Note
PATRICK TEACHING: Reality Check
Not every seller will agree to a concession, and that is not a sign your request was wrong. In a hot market with multiple offers, sellers often accept the strongest terms and concessions get harder to win; in a balanced or buyers' market, the same ask is far more likely to be met. And here is the hard truth I tell every client: never ask for more than your program allows. An over-the-cap ask can weaken an otherwise strong offer and make you look less prepared. Know the cap, ask inside it, and let the seller help you close when the market says they should.
Quick FAQ: What the Seller Can Pay For
These are the questions buyers ask me the moment they realize the seller can help. Here is the short version of each.
Can the seller pay all my closing costs?
It depends on how big your closing costs are versus how much your loan program allows a seller to contribute. In a transaction where your costs stay under the cap, the seller can cover a meaningful share, sometimes all of them. The key word is under the cap. Confirm your current limit with your loan officer, then ask for an amount that keeps you inside it.
How much can a seller contribute to my loan?
The cap varies by loan type and by your loan-to-value, which is why I do not quote a flat number here. Higher loan-to-value deals often allow less. This is a lender overlay and program note, so get the exact current limit from your loan officer for your specific file. See how FHA, conventional, and VA compare before you decide your ask.
Is a concession better than a lower price?
It depends on the problem you are solving. If your cash to close is tight, a concession lowers the money you bring and is usually the stronger move. If your monthly payment is your concern and you can bring the cash, a lower price or a rate buydown helps more over time. Here is the head-to-head on down payment vs closing costs.
Can the seller buy down my rate?
Yes. The seller can fund prepaid points that lower your interest rate, such as a 2-1 buydown, as long as the cost stays within your concession cap. It is one of my favorite uses of a concession because it lowers your payment every month, not just your cash to close. Here is how a rate buydown works so you understand the tradeoffs before asking.
That is the seller's side of the ledger, and it puts more money back in your pocket than most buyers realize. Ask for it inside the cap, bundle it into the package, and let the seller help you close. Sincerely, Patrick Kevin Fagan