Win With Concessions: Seattle Seller Playbook

Seattle’s market has changed, and so have the best ways to negotiate. In Q1 2025, sellers in the Seattle metro offered concessions in about 71 percent of sales, far above the national average. If you want top dollar and a smooth closing, you need a plan for credits, buydowns, and other incentives that match today’s buyer needs. In this guide, you’ll learn what works in Seattle, how lender rules shape your options, and how to document everything with confidence. Let’s dive in.

Why concessions win in Seattle

Seattle sellers are using concessions at scale. Redfin reports that 71.3 percent of Seattle‑area deals in Q1 2025 included a seller concession. That is a major shift in negotiating power and buyer expectations.

Local conditions help explain why. NWMLS data shows King County remained high priced through 2024 while inventory and months of supply rose. With more homes to choose from and affordability pressured by rates, buyers are asking for help with cash to close or monthly payments. Smart concessions can keep your price intact and move your home faster.

What seller concessions include

A seller concession is anything you pay or credit that lowers a buyer’s cost to close or carry the home. Redfin tracks these when agents report that the seller reduced buyer costs in the deal. See their definition in this concessions analysis.

Common options in Seattle:

• Closing cost credit. You credit lender, title, and other allowable fees so the buyer brings less cash.
• Mortgage rate buydown. You fund a temporary 2-1 buydown or points so the buyer’s initial payment is lower. This has grown in use as rates rose, as noted in market commentary.
• Repair credit or repair escrow. Instead of fixing items pre-closing, you credit an agreed amount or fund an escrow for specific work.
• Home warranty. A one‑year plan can reduce perceived risk, especially for condos or older homes.
• Prepaid HOA dues, taxes, or insurance. You cover certain prepaids to lower the buyer’s upfront cash. Lender rules vary, so confirm treatment.
• Personal property or appliances. Leave select items that matter to the buyer.
• Temporary rent‑back. You stay after closing for a short term, paying agreed rent to the new owner. Learn the basics in this rent‑back overview.

Lender limits you must know

Most concessions flow through the buyer’s loan, so program rules cap what you can pay.

• Conventional loans. Fannie Mae caps “interested party contributions” based on down payment. For many primary residence loans with small down payments, the cap is 3 percent of the lesser of the price or appraised value, with higher caps at lower LTVs. Review the Fannie Mae IPC rules and confirm with the buyer’s lender.
• FHA loans. Contributions are generally capped at 6 percent of the price for allowable costs and points. See FHA guidance on interested party contributions.
• VA loans. Certain “seller concessions” have a commonly cited 4 percent limit, while normal buyer costs and some discount points may not count toward that cap. The details are nuanced. Read the VA Lenders’ Handbook and verify line items with the buyer’s lender.

Important guardrails:

• You generally cannot fund the buyer’s required down payment, except where a down payment assistance program allows it. See this overview of seller‑paid cost considerations.
• If you exceed program caps, the lender may reduce the effective price or decline the loan. Get lender sign‑off early and itemized.

Seattle contracts and disclosures

Put every concession in writing. Your Purchase and Sale Agreement or a signed addendum should state the amount, purpose, and timing. For rent‑backs, use a formal temporary occupancy agreement with rent, security deposit, utilities, insurance and move‑out terms. Here is a plain‑English primer on rent‑back agreements.

Washington law still requires full property disclosures. Under RCW 64.06, sellers must deliver a Seller Disclosure Statement about material facts. Concessions do not change this duty. Review the statute’s overview on seller disclosures.

Buyer agent compensation is also negotiated differently after the 2024 NAR settlement. MLS fields no longer display preset offers of compensation, and buyer representation agreements are required. Expect more case‑by‑case negotiation and document any seller‑paid buyer agent fee. Read a summary of settlement impacts.

Price drop vs credit: a quick compare

Here is a simple way to compare a price cut to a closing credit.

• Scenario: You list at 800,000. The buyer requests a 10,000 closing‑cost credit instead of a 10,000 price cut.

Which path you choose depends on your goals. Credits can solve buyer affordability without resetting comps, but they must pass lender review. Keep closing statements for your records because seller‑paid items can affect your taxable gain. See the IRS guide on selling your home.

Smart concession plays for Seattle

Match the concession to the buyer’s barrier and property type.

• If buyers are tight on cash: Offer a targeted closing‑cost credit, within program caps.
• If rate shock is the issue: Fund a temporary 2-1 buydown so the first years’ payments are gentler. See context in this buydown overview.
• If you are selling a condo: Consider an HOA fee credit or one‑year home warranty. Redfin notes higher concession use with condos in Seattle in 2025.
• If you need timing flexibility: Propose a short, paid rent‑back and document it with a temporary occupancy agreement. More on rent‑backs here.
• If inspection reveals items: Offer a capped repair credit or escrow rather than a full price chop.

Step‑by‑step checklist

• Study comps and trends. Use your CMA and NWMLS updates for King County to set price and expectations.
• Profile likely buyers. Will they use conventional, FHA, or VA financing? Choose concessions that help those borrowers, guided by Fannie Mae IPC rules, FHA limits, and VA guidance.
• Confirm with the lender. Ask for written confirmation that your proposed credit or buydown is permitted and within caps.
• Paper it properly. Add exact amounts and purposes to the contract or an addendum. Use a formal rent‑back agreement if you need post‑closing occupancy. See this rent‑back explainer.
• Organize closing docs. Make sure your Closing Disclosure shows each concession clearly. Save everything. The IRS explains how selling expenses affect gain in Publication 523.

Risks to watch

• Loan denials and delays. If credits exceed caps or are mis‑categorized, the loan can be delayed or denied. Review Fannie Mae guidance early.
• Appraisal shortfalls. A high price with a large credit does not guarantee the appraisal will meet the contract price.
• Tax and proceeds. Credits reduce your net proceeds and may reduce your taxable gain. Keep records and consult a tax pro using IRS Pub. 523.
• Buyer perception. Some buyers prefer a simple price cut, others value lower cash to close. Use targeted, time‑bound offers.

Ready to use concessions to win?

You do not have to cut price to get results in today’s market. By pairing the right concession with the right buyer profile, you can protect comps, speed up your sale, and keep your timeline intact. If you want a tailored plan for your home and neighborhood, reach out to the local team that lives this every day. Connect with Spruce Home Group to map your pricing and concession strategy.

FAQs

How common are seller concessions in Seattle?

• In Q1 2025, about 71.3 percent of Seattle‑area sales included seller concessions, according to Redfin’s analysis.

What counts as a seller concession on a loan?

• Lenders treat seller‑paid items like closing cost credits, points for buydowns, and certain prepaids as concessions, with program caps detailed in Fannie Mae’s IPC rules and agency guides.

How much can I credit a buyer with FHA or VA?

• FHA generally allows up to 6 percent toward allowable costs, and VA has a commonly cited 4 percent cap for specific “seller concessions.” Review FHA policy and VA guidance and confirm with the buyer’s lender.

Do concessions change my Washington disclosure duties?

• No. You must still provide the Seller Disclosure Statement under RCW 64.06. See the state overview of seller disclosures.

Is it better to drop price or offer a credit?

• It depends on your goals. Credits or buydowns can preserve recorded comps and help buyer affordability, while price cuts permanently reduce your recorded sale price. See a quick compare above and verify details with the buyer’s lender and your tax pro using IRS Pub. 523.